We investigate nutrition and expenditure in rural Maharashtra in India. We estimate that the elasticity of calorie consumption with respect to total expenditure is 0.3-0.5, a range that is in accord with conventional wisdom. The elasticity declines only slowly with levels of living and is far from the value of zero suggested by a recent revisionist literature. In these Indian data, the calories necessary for a day's activity cost less than 5 percent of the daily wage, which makes it implausible that income is constrained by nutrition rather than the other way around.

By buying cheap and selling dear, risk-neutral commodity speculators can smooth commodity prices and induce serial dependence in price even when none would exist under a simple process of supply and demand. Commodity prices are variable and strongly positively correlated from one year to the next. The variability is often explained by supply factors, and the autocorrelation by the activities of speculators. We show that this explanation is not consistent with the evidence. Speculation can substantially increase autocorrelation for prices that are weakly autocorrelated in its absence, but not to the high levels that are observed in the data.

The authors investigate nutrition and expenditure in rural Maharashtra in India. They estimate that the elasticity of calorie consumption with respect to total expenditure is 0.3-0.5, a range that is in accord with conventional wisdom. The elasticity declines only slowly with levels of living and is far from the value of zero suggested by a recent revisionist literature. In these Indian data, the calories necessary for a day's activity cost less than 5 percent of the daily wage, which makes it implausible that income is constrained by nutrition rather than the other way around.

By buying cheap and selling dear, risk-neutral commodity speculators can smooth commodity prices and induce serial dependence in price even when none would exist under a simple process of supply and demand. Commodity prices are variable and strongly positively correlated from one year to the next. The variability is often explained by supply factors and the autocorrelation by the activities of speculators. The authors show that this explanation is not consistent with the evidence. Speculation can substantially increase autocorrelation for prices that are weakly autocorrelated in its absence but not to the high levels that are observed in the data.