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Abstract

El Salvador is one of the smallest and most populated countries in Latin American with approximately 6.3 million people and a population density of 301 habitants/km2. The country is considered to be food and nutrition insecure because of its vulnerability to natural disasters, high dependence on remittances and food imports, low economic growth and a poverty rate of 34.5%. Despite the food insecurity status of El Salvador, to the best of our knowledge no one has estimate a food demand system that can be used to evaluate how price and income shocks affect food security in the country. We use household food expenditure data from the 2013 Multiple Purposes Household Surveys (EHPM) and additional information on prices to estimate an Exact Affine Stone Index (EASI) food demand system and evaluate the impact of price and income shocks as well as potential food policies on food demand and food insecurity. Our preliminary results show inelastic price demand for all food groups except meats (which includes beef, pork, poultry and eggs) and non-alcoholic beverages. The most inelastic demand was observed in the food group of cereals that includes, corn, rice, and beans which are staples in the Salvadorian diet.

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