Demand for nutrition vs. demand for tastes

This paper extends the analyses by Silberberg (1985) of the relationship between the expenditures for food to satisfy nutritional requirements and the expenditures to satisfy the desire for tastes using alternative estimates of the minimum cost or technically efficient diet. The hypothesis originally tested by Silberberg is retested by following his procedure for estimating the minimum cost diet but using data supplied by the 1977-78 Food Consumption Survey in Hawaii. The results are roughly consistent with the hypothesis, i.e., if the lowest income group is excluded, the ratio of actual food expenditures to the minimum cost diet rises with increase in household incomes. However, an argument could be made that the procedure used by Silberberg in estimating the minimum cost or technically efficient diets did not satisfactorily separate the expenditures for nutrition from the expenditures to satisfy the demand for tastes. We, therefore, re-estimated the hypothesis with the minimum cost diet which satisfies Recommended Daily Allowances (RDAs). We find that the results again are consistent with the hypothesis but the effect of changes in income on food expenditures to satisfy tastes is relatively small. It is argued elsewhere that the technology (as embodied in available recipes) is not available to convert all nutrients contained in a typical minimum cost diet into palatable meals. Therefore, the minimum cost diet estimated by optimizing over the raw foods is not feasible and, therefore, is not an appropriate measure of how cheaply the demand for nutrition could be satisfied. We retested the Silberberg's hypothesis using the 'feasible' minimum cost diet estimated by optimizing over those bundles of foods that represent reasonably popular meal recipes. Using this procedure, it is estimated that about 60% of the food expenditures were to satisfy the demand for tastes versus about 70% obtained using Silberberg's procedure.