The Cost of Decent Subsistence

• Published in: Management science Vol. 25; no. 10; pp. 980 - 989
• Main Author: Balintfy, Joseph L
• Format: Journal Article
• Language: English
• Published: Linthicum INFORMS 01.10.1979; Institute of Management Sciences; Institute for Operations Research and the Management Sciences
• Series: Management Science
• Subjects: applications; Budgets; Calories; Diet; Financial budgets; Food; Food consumption; Food prices; Food products; industries: agriculture; industries: agriculture/food; Linear programming; Marginal utility; Maximization; Milk fat; Nonlinear programming; Nutrients; preference: applications; Preferences; Prices; programming: nonlinear; programming: nonlinear, applications; Statistical data; Utility; Utility functions; utility/preference: applications; Vegetables
• ISSN: 0025-1909; 1526-5501
• DOI: 10.1287/mnsc.25.10.980

Food preference and utility measures are functionally related to the frequency and quantity of foods consumed within fixed time periods. The coefficients of these functions can be estimated by psychometric or econometric methods. Total preference or utility can be maximized subject to budgetary and dietary constraints by nonlinear programming techniques. Postoptimal analysis provides the marginal utility of calories maintained in the diet at any level of the budget. The food budget where the marginal utility of calories becomes zero is defined as the Cost of Decent Subsistence (COS). It is a unique measure that embodies all the relevant factors of human food consumption such as food likes and dislikes, food prices and nutrition in a single numerical value. Computational examples with USDA food group data are presented for two time periods a decade apart. Approximations of the CDS estimates show a marked sensitivity to nutritional needs and an increase in cost over time that slightly exceeds the change of the food price index. The applicability of the the CDS concept to income maintenance policies and volume feeding programs are discussed.