Caloric consumption efficiency and import dependency: Evidence from Sri Lanka

Using the stochastic cost frontier, we estimated the determinants of cost inefficiency of total caloric and cereal and pulses-based caloric consumption in Sri Lanka at the household level. We specifically tested whether high reliance on imported food helps poor, food- poor, and urban households to be cost-efficient. We estimated the cost frontiers employing half normal and truncated normal distribution assumptions. We found that truncated normal specifications are more appropriate. Our results show that food-poor households with higher reliance on imported calories are more cost-efficient in total and cereal and pulses-based caloric consumption. Urban households with a high import dependency on cereal and pulses-based consumption are found to be more cost-efficient. Our results call for prudent trade policies that do not deprive food-poor and urban households of imported food as the policy biases favouring domestic food production will disproportionately affect the food-poor and urban households. (c) 2022 Economic Society of Australia, Queensland. Published by Elsevier B.V. All rights reserved.

Automated summary

Using the stochastic cost frontier, this study estimated the determinants of cost inefficiency of total caloric and cereal and pulses-based caloric consumption at the household level in Sri Lanka. The results suggest that a high reliance on imported food can help improve cost efficiency for food-poor and urban households.