Widespread malnutrition in developing countries calls for appropriate strategies, presupposing good knowledge about nutritional impacts of policies. Little previous work has been carried out in this direction, especially with respect to micronutrients. We use representative household data from Malawi and develop a demand systems approach to estimate income and price elasticities of food demand and nutrient consumption. These estimates are applied for policy simulations. Given multiple nutritional deficiencies, income-related policies are better suited than price policies to improve nutrition. Although consumer price subsidies for maize improve calorie and mineral consumption, they can worsen vitamin consumption in urban areas.
Keywords: quadratic almost ideal demand system, micronutrient deficiency, income and price elasticities, nutrient consumption, Sub-Saharan Africa, Malawi