Returns to scale in food preparation and the Deaton–Paxson puzzle

Abstract

We consider returns to scale in food preparation as a potential resolution of a puzzle raised by Deaton and Paxson (Journal of Political Economy, 106(5), 897–930, 1998). We clarify the conditions under which returns to scale in food preparation can resolve the puzzle. The key requirement is that foods are heterogeneous in time costs. We then show that detailed food expenditure and time use data are consistent with larger households shifting to more time intensive foods.