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Undernourishment and Economic Growth

The Efficiency Cost of Hunger

Year of publication 2001

Product type Book (stand-alone)

ISBN 9251045429

Series title FAO Economic and Social Development Paper

Series number 0259-2460

Edition 1

Synopsis (short abstract) This paper considers the impact of two measures of nutritional status on the growth rate of GDP per caput: the prevalence of food inadequacy (PFI), and the dietary energy supply (DES) per caput, as reported by the FAO in the Sixth World Food Survey. A surprisingly strong relationship appears to link economic growth to nutritional factors, and is robust to econometric procedures that correct for unobserved, country-specific heterogeneity, as well as measurement error or endogeneity concerns raise d by the recent critique of FAO data by Svedberg (1999). The impact of nutrition on economic growth would appear to operate directly, through nutrition's effect on labour productivity, as well as indirectly, through improvements in life expectancy. Depending upon the empirical specification that is chosen, the point estimates imply that inadequate nutrition is responsible for a shortfall of between 0.23 and 4.7 percentage points in the annual growth rate of GDP per caput worldwide, with the high er figure, ironically, corresponding to estimation techniques that correct for the data problems identified by Svedberg. Aside from its effect on human welfare, the efficiency cost of hunger would therefore appear to be extremely important. Even when allowing for substantial overestimation of the PFI or underestimation of the DES per caput for sub-Saharan Africa, the results provide a compelling explanation for the growth shortfall suffered by the African continent, with estimates ranging from 0 .16 percentage points to 4.0 percentage points of lost growth.

Language English

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