Calorie intake and income elasticities in EU countries: A convergence analysis using cointegration

We want to determine here whether the trans-European consumer reacts to cha nges in total food consumption or changes in income equalise in the long ru n. Do total calorie intake elasticities and income elasticities converge in the long-run? A demand system is estimated for each European country. The proportional caloric intakes of the various food groups are analyzed as end ogenous variables, and two exogenous variables (total calorie intake and in come), are both defined in log terms. As all variables are I(1) and non-coi ntegrated, demand systems are specified in first differences. Finally, we u se Johansen and Juselius's multivariate cointegration tests to test for the convergence of calorie intake and income elasticities. Empirical results i ndicate a very limited convergence between certain products and countries c onsidered, suggesting that country idiosyncrasies still play an important r ole in consumer behavior.