Calculating the Affordability of a Healthy Diet

1 Technical Session 6: Calculating the affordability of a healthy diet Yan Bai,PhD Food Prices for Nutrition Development Data Group, the World Bank Friedman School of Nutrition Science and Policy, Tufts University 17 February 2022

2 Food Prices for Nutrition Affordability Indicators Affordability indicator 1: the ratio of the diet cost to the food poverty line (63% of the international poverty line of 1.90/day in 2017 USD) o In our global study, 63 percent as the mean proportion of expenditures on food among the bottom consumer segment in low-income countries (calculated from the World Bank Global Consumption Database [World Bank, 2020]) o What is the poverty line to be used at the national level? o What is the food budget to be applied then?

3 Food Prices for Nutrition Affordability Indicators (cont d) Affordability indicator 2: the ratio of the diet costs to observed per capita per day food expenditure from national accounts o In our global study, food expenditure data are also from the International Comparison Program dataset o Population data of the country is also needed o At the national level, food expenditure data could be from national or regional/subnational household surveys

4 Food Prices for Nutrition Affordability Indicators (cont d) Affordability indicator 3: the percent of the population who cannot afford diet costs, where the food budget is defined as 63% of income o Income distribution is from World Bank s PovcalNet database o At the national level, income distribution data would also be from national or regional/subnational household surveys o What is the food budget to be applied then? Affordability indicator 4: the number of people who cannot afford the diet costs, where the food budget is defined as 63% of income o Using indicator 3 multiplied by the population data of the national or by each region

5 Example in Pakistan the global result: 3.44USD (2017 PPP) Affordability indicator 1: the ratio of the diet cost to the food poverty line o 3.44/(0.63*1.9)=287% or 2.87x o Indicating the cost of a healthy diet in Pakistan, calculated using the ICP global dataset, is about 2.9 times to the food poverty line, defined as 63% of 1.9USD international poverty line Discussion points: In the national study, what would be an appropriate poverty line to be applied? What is a reasonable food budget portion in Pakistan? 1) 2)

6 Example in Pakistan the global result: 3.44USD (2017 PPP) Affordability indicator 2: the ratio of the diet costs to observed per capita per day food expenditure from national accounts o The food expenditure per capita per day in 2017 is about 3.67 USD (2017PPP) o 3.44/3.67=94%, indicating the cost of a healthy diet in Pakistan, calculated using the ICP global dataset, is about 94% of the observed food expenditure per capita per day Discussion points: What are the best data sources for the food expenditure in Pakistan? Pakistan Bureau of Statistics, national or subnational household surveys Application at national or subnational level? If needed, how to align the timing of the diet cost and food expenditure? 1) 2) 3)

7 Example in Pakistan the global result: 3.44USD (2017 PPP) Affordability indicator 3/4: the percent (the total) of the population who cannot afford diet costs, where the food budget is defined as 63% of income o The income distribution database is from the World Bank s PovcalNet o 3.44USD as food budget refers to an income level of USD5.48 per capita per day o Converting this number into 2011PPP USD using the American exchange rates, and finally having 68.9% of total population, or 143.3m who can t afford in Pakistan in 2017 Discussion points: In the national study, what would be an appropriate food budget to be applied? What are the data sources for the income distribution in Pakistan? Application at national level or subnational level? If needed, how to align the timing of the diet cost and income distribution? 1) 2) 3)