Description:
Food purchased and consumed away from home is a growing share of household expenditure in developing countries. Therefore, measuring the monetary value and estimating the caloric equivalent of these meals are increasingly important for the accurate calculation of a cost-of-basic-needs poverty line. The standard approach uses the per-calorie cost of the food consumed at home to estimate the caloric equivalent of food purchased and consumed away from home, but it does not include an allowance for the overhead or profit of the food seller. This paper retains the assumption of equal composition in the food baskets consumed inside and outside the home and uses data from a consumption experiment in the Marshall Islands to estimate a "multiplier” to increase the per-calorie cost to allow for these expenses. The methodology generates reasonable estimates of meal-specific and overall multipliers. Although the impact of their application is minimal in this case, it may be larger in contexts with higher shares of food purchased and consumed away from home in total consumption