Consumption patterns of food, tobacco and beverages: a cross-country analysis

Abstract

This study considers the consumption patterns of food, tobacco, soft drinks, and alcohol in 43 developed and developing countries. Such an analysis is important for policy issues associated with tobacco, alcohol, and soft drinks. The results show that consumers in the developing countries spend a much higher proportion of their income on food than consumers in developed countries. The proportion of expenditure allocated to the other three commodities, tobacco, alcohol, and soft drinks, are similar in the two groups of countries. On average, people around the world allocate about one quarter of their income on food, 2.6% on tobacco, 3.2% on alcohol and 1.2% on soft drinks. The income elasticity estimates reveal that food is a necessity in most countries, while tobacco and alcohol are necessities in most of the developed countries and luxuries in a majority of developing countries. Soft drinks are a luxury in a majority of the developing as well as the developed countries. The own-price elasticities show that demand for all four commodities is price inelastic in all countries.