Identification and Estimation of Quadratic Food Engel Curves: Evidence from Cameroon
Wirba, Ebenezer Lemven
African Economic Research Consortium
In this paper we estimate quadratic food Engel curves using data from the 2001, 2007 and 2014 Cameroon household consumption surveys. To address potential mismeasurement of regressors, we employ the heteroscedasticity-based identification strategy. Exploratory non-parametric analyses suggest quadratic forms for the food Engel curves. The regression results in this study confirm these patterns. At lower spending levels, unit increases in total spending increase the food budget share, while at levels above the spending thresholds unit increases in total spending reduce the food budget share. We also find evidence of major shifts in the quadratic food Engel curves over time. These findings suggest that reducing taxes on food items would be more beneficial to poor households.