Food demand in Tanzania is very sensitive to prices, but much less sensitive to incomes. That is one of the important and surprising conclusions that comes from a comprehensive study of food demand based on more than 10,000 Tanzanian households. That suggests that most consumers, except those in the highest expenditure groups, are concerned with achieving an adequate diet rather than with achieving a diet that satisfies their taste preferences. The finding has important policy implications because it shows that reducing food prices would be an effective way to improve diets and reduce undernutrition.
The study estimated a large demand system for Tanzania for 18 food groups and four expenditure groups. The study found that the households within the lowest quartile (25%) of expenditures spent 72.6% of their expenditures on food and only those with the highest quartile (top 75%) spent less than half of their household expenditures on food. This conclusion is consistent with the low calorie consumption of all expenditure groups, but especially for the lowest two expenditures quartiles who had average daily per capita consumption of 1,299 and 1,795 calories, respectively, which is well below the FAO recommended daily calorie allowance for a healthy active life of approximately 2,100 calories (Table 1). The survey data also showed that the mean per capita expenditures on food for the lowest expenditure group was 740 TZS ($0.46) per day.