The Impact of Food and Economic Crises on Diet and Nutrition

The conventional view is that inelastic demand makes consumption of staple foods resilient to major price and income shocks. We explore the dietary and nutritional implications of a major shock in Bulgaria in the mid-1990s with data from before, during and after the shock. While demand for foodstuffs may remain relatively unchanging in environments characterised by stable food prices and incomes, economic crises and significant price spikes appeared to induce dramatic changes in price and income demand elasticities. We therefore suggest the use of caution in basing policy prescriptions on randomly available pre-crisis simulations.