On Food Insecurity and the Economic Valuation of Food in Iran

Food security and food security are considered important development goals in all countries, so that reducing food insecurity is seen as an important political goal for all people. Accessing this goal can be achieved by increasing food supply, improving access to food, and increasing people's purchasing power. But evaluating these programs is challenging. In this regard, the purpose of this study is to investigate food insecurity and determine the economic value of food in the country. For this purpose, the analysis of welfare economics proposed by Chavez (2017) has been used.

The data and information required in this study include household consumption expenditure for six major food groups: 1- bread and cereals, 2- meats, 3- dairy products, 4- fresh fruits, 5- oils and fats, and 6- fresh vegetables that have been used from the statistics of the raw income-household data questionnaire for 2018. In this study, household demand was estimated using the near-ideal Quadratic Almost Ideal Demand System (QUAIDS) and then the income, compensatory price (Hicks), and non-compensatory elasticities (Marshall) were calculated. Finally, the economic value of food (food benefit) was calculated for the six groups of food under three scenarios: 1- High food insecurity, 2- Moderate food insecurity, and 3- Food security.

The results of income elasticity calculations showed that the group of bread and cereals, dairy products, oils and fats, and vegetables are among the essential goods and the meat of luxury goods and fruits have the same elasticity According to the results of compensatory price elasticity (Hicks), all negative own-price elasticities are consistent with economic theory and show a negative relationship between the price of each commodity and the demand for that commodity. In all studied groups, own-elasticity is less than one price and therefore they are less elastic concerning their price. A comparison of the own-price elasticity of demand for the studied goods showed that the absolute value of own-price elasticity is higher for dairy products than other goods and less for meat than other goods. In other words, for a one percent increase in the price of dairy products, the demand for it decreases more than other goods. The amount of cross-price elasticity for all food groups in terms of absolute value is less than one. In other words, in most cases, consumers change the demand of another group less by changing the price of one group. After calculating price and cross-price elasticities, the economic value of food (food benefit) of each urban household was calculated in three scenarios: 1- high food insecurity, 2- moderate food insecurity, and 3- food security. The food benefit of each household in the high food insecurity scenario for the group, bread and cereals are 2903.7 (1000Rials), meat 5947.3 (1000Rials), dairy 5601.4 (1000Rials), fruit 5486.1 (1000Rials), oils and fats 1859.2 (1000Rials) and vegetables 2394.3 (1000Rials). In total, the economic value of food for an urban household with a high level of food insecurity is equal to 24192.0 (1000Rials). While for the food security scenario equal to 77046.8 (1000Rials) has been obtained.

 A comparison of the economic value of the food groups studied in the moderate food insecurity scenario compared to the high food insecurity scenario indicates that the value of food under the second scenario is at least 1.6 times higher than the first scenario and the economic value of meat in the moderate food insecurity scenario has increased more than other food items and the economic value of oils and fats has increased less than other food items. Also, the economic value of selected food groups in the food security scenario compared to the high food insecurity scenario, indicates that bread and cereals are 3.18 times, meat 3.29 times, dairy products 3.22 times, fruit 3.16 times, Oils and fats are 2.94 times and vegetables are 3.11 times. In this case, the economic value of meat has increased more than other foods and the economic value of oils and fats has increased less than other foods. According to the results of food insecurity scenarios, it was observed that household income is the main factor in household food security and food benefit and has the greatest impact on it. Therefore, it is suggested that the goals of policies in the field of supporting low-income groups are to pave the way for increasing the income of this group.