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TABLE 5. Summary of empirical relationships: partial regression coefficients

Dependent variable Growth (G), weight Diet (D), calories Health (H ), diarrhoea Genetic and parental (Z) Socio-economic (E) Constant
Age Age2 Sex (boy =1) Maternal height Land
Weight       0.34 -0.003 0.93   0.95 0.50   2.65
        0.30 -0.003 0.58 0.09 0.81 0.62   -9.83
        0.25 -0.002 0.48 0.11     0.14 -12.88
Height     - 1.99 1.23 -0.012 1.92 0.35 4.52 0.91   1.50
      - 1.84 1.07 -0.009 1.78 0.40     1.00 -4.65
Calories       48 - 0.8 172   180 - 80   268
        50 -1.2 257 16     31 291
Calcium       5 0.6 255 _a     89 929
Weight   0.004   0.11 0.0001 0.17         1.79
Calories 100             78 - 212   121

Source: Ref. 17.
a. Zero or negligible.


Like the NS relationship, the health relationship is a production function. This function is a variant of the formulation by Grossman [18]. At any particular age, health is viewed as an accumulated stock, a result of an optimal programme by which the individual or household invests in health over time. The returns could be determined (and measured) by healthy days and wage rates, the value people put on being healthy, and the time horizon of these benefits from good health. The costs of holding the stock are determined by, among other things, age, which is a key determinant of how fast this stock deteriorates. A major prediction of this approach is that, all other things being equal, there is a higher propensity to invest in the health of the young because they have a longer horizon of returns and a lower deterioration rate than the old.

Actual levels of periodic investment in health depend on, among other things, household income, which determines the level of inputs in health, and the shadow price of producing the additional stock. Just as food is an input to the diet, medical care and other goods and services (e.g. safe water, sanitation) are inputs in the formation of health. These, in addition to pertinent community variables, are the intervening variables in the production of health [19]. To understand how health and, through it, nutritional status can be manipulated by policy programmes, it is essential to understand how incomes and prices as well as pertinent environmental factors determine the use of medical care and other variables resulting in health.

How health is produced is important also from the viewpoint of delivery, for example, of food supplementation. As many nutrition interventions may be incorporated with health services, use of such service must be studied, since it may be minimal, for the poor in particular [20; 21].

Productivity and nutrition

The measurement of productivity, largely in the form of studying the determinants of earnings, has been a major preoccupation of economic theory. Productivity is not limited to adults only. The performance of children in school can also be studied: either productivity and household income, as indicated in equation 6, or children's learning can be related to diet and nutritional status. Discussions of these issues can be found elsewhere [22].

The types of analyses implied by equation 6 relating Q, D, and NS, are essential to the characterization of the malnutrition problem and its definition from a policy perspective. Except for severe cases, malnutrition is measured according to some absolute standards of nutritional requirements and various estimates of weight, height, and combinations thereof. It is clear that malnutrition, especially if severe, can affect learning [23] and interventions could affect productivity [24]. The meaning of body size for productivity and the role of nutrition (or mild malnutrition) in productivity are still unclear, however. These measures are at times controversial, especially in view of potential regulatory and adaptation mechanisms that could maintain given productivity levels with moderate but sustained variations in diets [25]. "Is big beautiful, smart, and productive?" is a serious policy question, especially if size is going to be attained in part through public resources. On the practical side, it is difficult to differentiate, from a productivity perspective, between nutrition intervention programmes that primarily affect size and those that improve the nutritional status to some minimal level.

Analysis of the functional consequences of malnutrition would provide a more concrete definition and measures of the problem and its social efficiency. It would characterize malnutrition and interventions in terms that are more amenable to social and political debate than the anthropometric measures in current use.

Participation in the programme

As the household may have to sacrifice resources to participate in a programme, the family's or individual's participation or use of resources is not guaranteed. In some cases, participation in a welfare programme may involve a stigma, adding a non-monetary cost.

As participation in a programme is a necessary condition for the effective intervention, the study of equation 7 is essential to understanding the impact of the programme and assuring its effectiveness and efficiency. Little research to date has dealt with this issue in the context of nutrition policy and programming (or intervention) impact. A study of the effect of US federal transfer programmes on the nutrient intake of elderly individuals [16] included an evaluation of eligible individuals' propensity to participate. The study showed that this propensity was related to individual and household characteristics such as age. sex, education, and socio-economic status.

Growth and development: Long-term promise and interim risks

Economic growth and development can be characterized by increases in real income, urbanization, agricultural production accompanied by a change to cash crops, and female participation in the labour force. These general trends will do much to reduce malnutrition; however, new risks may arise and old risks may persist. It is claimed that, once sufficient economic growth takes place and income and agricultural production increase, the problem of malnutrition will disappear. Broad macro policies concerning incomes and prices are based on the same tenet. Development is generally not fast enough, however, and often not equitable enough to be a sufficient solution to malnutrition. Moreover, the process of development and related policies, such as structural adjustment, at times involving higher food prices, carry numerous intermediate risks.

Per capita incomes: Levels and sources

Development is generally associated with, and measured by, an increase in real per capita income led by investment and technological change that increase labour productivity, which can be depicted by equation 6. The rise in income appears in both the urban and agricultural sectors and among both men and women.

The claim that malnutrition will disappear with development rests on several assumptions. The first is that an increase in real per capita income will translate into an increase large enough to be of nutritional significance among the poor. This is not always the case. It is also based on the assumption that even a (would-be) sufficient increase in income among the poor leads to an adequate increase in the amount the household spends on food and on nutrition consumption. This may not be the case in the short run, however.

As the income of the poor increases, non-food items compete with food for the increased purchasing power of the household. In addition, although the amount of money spent on food may increase, the types of foods purchased may change, resulting in a less nutritious diet. Grains and cereals or homegrown foods may be replaced by highly processed foods of lesser nutritional quality.

Three questions relating to the relationship between income and nutritional status need empirical evaluation. First, as income rises how do the quantity and quality of food change? Second, how does the change in sources of income affect consumption? Third, how does the intra-household distribution of food change with a rise in income and the change in its sources? These can be answered through a thorough examination of equations 2 and 10.

As far as the first question is concerned, relatively higher incomes are usually? but not necessarily, associated with a nutritionally better diet. As shown in table 2, in Indonesia higher-income groups spend a smaller proportion of their food budget on rice, corn, wheat, and cassava and a higher proportion on fish, meats, poultry, eggs, dairy products, fruits, and other items, including soft drinks and convenience foods. This shift is associated with an actual fall in the consumption of corn, wheat, cassava, and potatoes. Overall nutritional intake, nevertheless, is higher among the higher-income groups (table 3).

With respect to the way sources of income affect the diet, data from Indonesia suggest that, all other things being equal, including level of income, people whose main income source is agriculture do better almost across the board as far as consumption of nutrients is concerned than those whose main source of income is industry. (Exceptions are likely to be in the consumption of iron and calcium.) This may be because people involved in agriculture can benefit first from technological change and are less prone to a reduction in real income as prices of produce rise. Another categorization of sources of income is by gender. Some evidence exists that women's earnings have a greater MPC on food than men's and that children (but not necessarily infants) of wage-earning mothers are nutritionally better off than children of non-wage-earners. The phenomenon is particularly important when one considers that between 25% and 35% of households in the developing world are headed by women [26].

The third question suggests that the distribution of additional food in the household does not necessarily mean that all members of the family will benefit. Young children and pregnant and lactating women are not always beneficiaries of increased purchasing power. Taboos about the introduction of solid foods for infants and appropriate foods during pregnancy and nursing will not change because there is more in the house. Data on how food is distributed within the household are scarce.

TABLE 6. Regression coefficients on sources of income, with the consumption of nutrients as dependent variables—Indonesia


Source of household income


Outer islands







Calories 0.1296 0.1037 -0.1086 0.1747 0.0592  
Protein 0.1103 - 0.0783 - 0.0764 0.0932    
Fat       0.0560    
Carbohydrates 0.1445 0.1178   0.2076 0.0789  
Calcium   0.1051   0.0837    
Iron 0.0739 0.0901 -0.0976 0.1279    
Vitamin A           -0.1551
Thiamine   0.0918   0.1626    
Riboflavin 0.1099 0.0740   0.1085 0.0509  
Niacin 0.1669 0.0792   0.1714 0.0567  
Vitamin C   0.2297   0.2612 0.1817  

Urbanization and migration

Economic development is often accompanied by a decline in the agricultural sector, leading to migration to the cities. While the effect of migration and urbanization can be captured by a host of environmental variables in all the relationships outlined above, considerable numbers of nutritional implications can be studied through urban and rural variations in prices, incomes, and sources of income.

Urbanization may mean higher income for the household but not necessarily improved nutrition, for several reasons [27]. First, food prices are likely to be higher in urban areas than in rural areas, with harsher implications for inhabitants of the former, because higher prices in rural areas tend to improve the incomes of farmers. Second, the variety and relative prices are likely to differ between the two areas, thereby upsetting customary diets that have been established over generations. Third, city life offers more spending options that compete with food purchasing for household income. Fourth, little in the urban environment is available to support persons with the poorest diets because of limited income. Food gathering is often impossible, and there is less space for home gardens and livestock, which can be good stable sources of nutritious food especially in cases of short-term variations in income.

Indeed, data from Indonesia indicate that, while the urban population is wealthier and better off in terms of protein and vitamin-C consumption, it is worse off in terms of consumption of calories and other micro-nutrients [15]. One of the reasons for this is that absolute and relative prices are different between rural and urban areas. These differences move consumption away from grains toward foods that are rich in fat and protein. The higher prices in urban areas seem therefore to outweigh the higher income there as far as diet is concerned. Moreover, evidence suggests that a higher proportion of the urban population is at risk from malnutrition.

Urbanization offers means for efficient market interventions to cope with nutrition because of the population's dependence on the market for food. It is therefore easier to implement subsidies in urban areas than in rural areas. A serious policy issue is how to keep urban food prices low without affecting rural households who sell the produce [28].

Agricultural development and cash crops

The decline in the number of people employed in the agricultural sector is associated with technological changes and the transfer to cash crops. This transition can be marked by two phenomena: higher prices of produce and a change in sources of income.

For households producing their own food, the income and substitution effects come into play as a result of higher prices of produce. In general, increases in prices benefit the agricultural sector by improving the incomes of all households that are net sellers of food. Assuming that most small-scale farmers produce for the market and for their own consumption, but must also purchase a proportion of their food, some of this added income will be used to improve the nutritional intake of their households.

When an increase in farmers' income is facilitated by a switch to cash crops, as is often the case, the effect on nutritional status is less clear. The food the farmers now purchase is not necessarily more nutritious than that which they once grew and consumed at home. On related issues it has been stated:

Taken together, the evidence presented. . . makes a convincing case that some - perhaps many - agricultural projects have had adverse nutritional outcomes. Beyond this very general conclusion, however, very little can be said with confidence. This is partly a reflection of the weaknesses of the literature, discussed elsewhere, and partly a consequence of the fact that most research in this area has not aimed at defining causal mechanisms. This last consideration leads to the rather casual description of causes evident in much of the material quoted above. [29]

Female participation in the labour force

Economic development often results in an increase of women in the labour force, especially in urban areas. The model presented earlier makes a clear prediction about the potential (singular) impact of higher wages and labour opportunities for women on the diet through equation 2. Housework, including food preparation and child-rearing, are time-intensive activities for women [30]. When labour opportunities increase, the value of time and the shadow price of food preparation, breast-feeding, and the like rise as well. As a result there is substitution away from these activities in favour of ready-made convenience foods, including infant formulas, and eating food away from home.

The effect of this substitution on nutritional status and health can be harmful, particularly for infants under six months of age. The decline of breastfeeding with development, particularly in urban areas, is of great concern. Alternative feeding can be an adequate substitute only with sufficient money, good food hygiene, and appropriate use of substitutes. Evidence about these theoretical predictions and their dietary implications is still scanty Information on the contribution of breast-feeding is mounting [31] but not as much about the role and consequences of consumption of processed and ready-made food and of food eaten away from home.

Policy and programmes

Nutrition policy aims at alleviating hunger and improving nutritional status and health in general. This discussion concerns policy and programmes that directly address food consumption by the household. Health and environmental interventions that may have related effects are not considered here explicitly. This is not to say that these policies may not be as efficient as direct nutrition interventions in improving nutritional status.

The means by which pertinent policy is implemented are programmes that transfer public resources to the household, which assumes the ultimate decision on whether and how to use these resources. In this regard, the concerns of planners and managers are household use of, or participation in, the programme, distribution-related leakages, allocation-related leakages, and nutritional waste. These determine the effectiveness and efficiency of any particular programme, which are measured by the resources allocated to it.

Household use of, or participation in, the programme depends first on the programme's physically reaching the target household. Even then resources may go unused by the intended beneficiaries because the household may perceive the benefits to be of a less value than their cost.

Distribution-related leakages occur when programme resources are transferred to income groups that are not intended to be the beneficiaries. This usually happens when the degree of the malnutrition is unknown and when the target group is not easily accessible. Market-wide food subsidies are a common policy that produce this type of leakage since they benefit the entire population, including the rich.

Allocation-related leakages concern the use of public resources by the household for purposes not intended by the programme. This can happen in two ways. First, the household may use the added resources in part or in full to purchase non-food items. Second, it may use them for family members other than the intended beneficiaries; for example, the entire household may share in the food that is meant for children.

Nutritional waste concerns the actual (net) nutritional impact of the programme. Even when it reaches the right people for the right food items, the internal substitution of consumption in the household may reduce the net effect of the programme, and may be detrimental in some cases. Moreover, adverse health conditions may render the supplementary diet inefficient. These issues could be evaluated through an examination of equations 2 and 5.

Micro-economic theory and its empirical analysis can help identify the determinants of these leakages and their magnitude. To this end, the parameters and relationships established earlier are discussed below in conjunction with common policy programmes.

Programmes are divided into two groups, those that are market-wide and are not targeted at a particular population, and those that are. It should be stressed that even non-targeted programmes have intended groups of beneficiaries. The difference is in the means of the programmes rather than their intentions. Non-targeted programmes usually work through market goods. Targeted programmes work through identifiable groups of people. These categories are somewhat arbitrary, and some programmes can fit into either one depending on how they are implemented.

Non-targeted programmes

Food-price subsidies

Subsidies allow consumers to buy goods and services for prices lower than would prevail in the market without such support. They are intended to induce consumption of those goods and services, in this case food items, that the government is interested in supporting. The advantage of subsidies is that they are targeted to products rather than to consumers. This is particularly important when the poor are not easily identifiable or cannot be reached efficiently for other reasons.

Subsidies have several shortcomings, however. First, they are given to the population at large, including high-income households that the government may not wish to assist. The distribution leakage is particularly serious when the subsidized items have high income elasticities (across income groups) and consequently high-income groups would be the major beneficiaries. As can be seen in table 2, rice is consumed in larger quantities by the rich in Indonesia than by the poor, and therefore the rich benefit more from the subsidies.

Second, subsidies carry an income effect; the household can transfer part or the entire amount to consumption of other non-subsidized commodities. This problem would be relatively serious if households had low price elasticities for the subsidized goods, since the quantity response would be relatively small and the value of the subsidy would be shifted to other consumption. It is usually hard to identify a food item consumed by the poor that has a high price elasticity.

Third, subsidies are often given to a particular product, usually a staple, without regard to the full nutritional consequences of this approach. If they seek to enhance the consumption of particular nutrients, the share of the subsidized food in the consumption of those nutrients should be considered. The lower this share, the more wasteful is the subsidy. Moreover, a subsidy induces substitution in favour of the subsidized items at the expense of other less subsidized foods. Consequently, the net nutritional gain is less than might be sought. When this substitution results in a loss of consumption of some nutrients, the subsidy might be outright detrimental [32].

In general, the higher the income elasticity of the subsidized food and the lower its price elasticity and contribution to the consumption of particular nutrients, the higher the overall leakage from the subsidy.

Food fortification

Fortification is the addition of nutrients to widely consumed foods to maintain or improve the quality of the diet of a group, a community, or a population. Fortification is meant to circumvent household behaviour by "piggy-backing" on a particular food without changing its quality or price. There is no reason to assume that this will alter the purchasing habits in favour of the fortified item, unless the product becomes more expensive or it changes in taste, texture, or storage properties. More than in the case of the subsidy, the objective of fortification is the increased intake of a particular nutrient or micro-nutrient.

If the fortified foods are eaten in sufficient quantities, a reduction in vitamin and mineral deficiencies among consumers can be expected. From the perspective of this discussion, foods with low price and income elasticities are good candidates for fortification. They are consumed by a wide population, the poor in particular, and in quantities that are not sensitive to changes in incomes and prices.

Formulated foods

Formulated foods are nutrient-dense supplements generally prepared for infants and children. They are prepared in the home, at the village level, or through industrial processing.

The common production method is industrial processing, with distribution through local markets. In all types of programmes, the methods of marketing and distribution affect whether households accept the new food. The price of the product must be low enough to enable the target population to purchase it and develop consumption habits that would lead to low price and income elasticities for reasons discussed above. A food that is thought to be processed and marketed for "the poor" may be looked on with suspicion and not purchased.

When formulated foods are for in-home preparation, or for purchase at or provided through feeding programmes, appropriate education usually is necessary to enhance the production process.

Nutrition education

Nutrition education refers to any communications system that teaches people to make better use of their resources. It is often integrated into other targeted and non-targeted programmes but can also be the primary intervention by itself. The main focus of nutrition education is to change deleterious belief patterns affecting food intake or household utility and consumption functions (see equations 1 and 2). These programmes are often most successful when trying to change a specific behaviour [33].

Nutrition education may act in several ways. It can change detrimental belief patterns and practices, including intra-household food allocation. In addition, it can help to increase the purchasing power of the household by improving the types of foods purchased and methods of preparation. This means changes in food consumption and production technology at the household level.

More than other interventions, the success of a nutrition education programme depends on the behaviour and decision-making process at the household level. Not only must the message be disseminated and understood: it must change behaviour. It must also act within the constraints of food availability and the purchasing power of the household.

Targeted programmes

Income transfer

Income transfers are probably the most common form of transfer of public resources to the family because they alleviate the consequences of poverty in general, beyond nutrition. The effect of an income transfer exists in any other form of support to households, as the family considers any net increase in its resources as a transfer of income that induces behavioural changes associated with the effect of income. This effect, especially if considered permanent, induces more consumption of usual commodities.

The easier it is to identify and reach the needy groups and the higher the relevant income elasticities of food, the more efficient the transfer of income is. The lower the income elasticity of foods the government desires to support, the higher the leakage of the programme from a nutritional perspective; the added income is spent on types of consumption the government or the public may not wish to support.

Food stamps

Food stamps are commonly used in the United States and have been tried also in Sri Lanka. A food-stamp programme is a targeted programme that combines the merits of a food-price subsidy and income transfer. It aims at giving the household the market value of the differential between what it would consume without the programme and what it should consume from a programmatic viewpoint. It is an income transfer combined with an effective reduction in the price of food.

An optimal programme could be designed if household food preferences were known [34]. Even a suboptimal but more practical programme requires knowledge of the household's expenditures on food and pertinent income elasticities.

As food stamps require an initial outlay by the household to purchase them, some households, the poorest in particular, may not be able to finance this outlay and thus may not participate in the programme.

On-site feeding

On-site feeding programmes, commonly targeted to pregnant women and children, are meant to reduce the potential allocation leakage of programme resources to other family members. This is clearly not a foolproof system; the household may take account of the child's food at school, for example, and deprive him of the share he otherwise would have received at home. Moreover, the withdrawal of food at home may have a net detrimental effect on the child.

When the household finds it worth while to participate in the programme, the question usually is, How does this compare with an income transfer of the same value? Two parameters determine the efficiency of a programme that aims at increasing children's consumption of calories: (a) the food distributed (by the programme) to each child as a fraction of the food previously consumed at home and (b) the marginal propensity to spend on children's food [35]. The product of these two (which is almost by definition less than unity) will yield the percentage increase in the caloric intake of the child. On the basis of this model, data from Tamil Nadu, India, show that a food transfer of the value of 10% of family income, for example, will induce a family with an intake of 2,110 calories per capita (80% of FAO requirements) to increase the intake of a child with a ration of 290 calories by only 40 calories [36].

Take-home feeding

Take-home feeding programmes are an alternative means of distributing food. Advantages are that the food is consumed in the home, the cost of participation to the household may be lower, and the cooking preferences of the household are respected. Participation depends largely on the frequency and location of food distribution. As opposed to on-site feeding programmes, food pick-up may be more convenient because of less frequent distribution and fewer lost working days.

Allocation leakages are a fundamental problem; the appropriate quantities of food may not be given to the members of the household who are at risk of malnutrition, usually young children from six months of age, and pregnant and lactating women. Household preferences may not be satisfied by the types of foods distributed, which are often donated by other nations. In addition, when new foods are introduced, it is often difficult to persuade participants to change their food-consumption and cooking patterns. To summarize: "Supplementary feeding programs have the potential to improve consumption and nutritional status. But actual results have been discouraging" [37].

Nutritional rehabilitation

Nutritional rehabilitation centres provide residential or non-residential treatment for the severely malnourished, usually infants and children. These centres assure the consumption of required calories and nutrients and facilitate close monitoring of the condition. There is minimal leakage in these programmes since almost all of the children's nutrient requirements are provided at the centre. In addition, nutrition-education efforts can easily be incorporated. The problem is that the long-term effects are unclear since the children return to an unchanged environment.

Once again, the decision to participate is made by the household, although at this stage of malnutrition it is often a life-or-death matter. Non-residential programmes require more effort by the household since they may require the mother to bring the child in daily, which may be time-consuming and often results in lost wages.

These programmes probably represent the ultimate attempt to circumvent the household's decision-making process which leads to circumstances requiring drastic social intervention.

Integrated policies and programmes

Because of the complexity of the malnutrition problem, no one policy or programme has a clear advantage over another for solving it. From the viewpoint of social efficiency, numerous trade-offs emerge between the different interventions. Non-targeted programmes, such as subsidies, save the cost of identifying needy households, administrating interventions, and securing participation, and of allocation leakages. They entail costs in terms of distribution leakages that can be considerable, however, both economically and politically. Targeted programmes, such as income transfers and more direct nutrition interventions, may eliminate some distribution leakages but involve the costs saved under non-targeted programmes. Nutrition interventions may be wasteful if health is not considered and vice versa.

Theory suggests that the advantages of various interventions can be exploited by integrated policies and programmes. Through the consideration of the relationships and parameters discussed here and their distribution in the population, fine-tuned policies and programmes can improve household participation and the reliability of targeting of households and food items. They can also decrease leakages related to household behaviour and waste resulting from physiology and health problems.

Because of the close association between health and nutritional status, as well as for institutional reasons, integrated programmes have traditionally dealt with these areas. The experience of these programmes may be summarized as follows: "Results from a limited number of health-nutrition interventions suggest that these programs are able to improve maternal child health with an appropriate mix of health/nutrition services" [37].

Integrated programmes need not be confined to health and nutrition, however. Conceptual efforts are under way to look at the potential of those that combine the advantages, from a household's perspective, of both subsidies and income transfers. There is no a priori reason for considering only subsidies or income transfers as mutually exclusive policies, or for considering only one staple and a single nutrient. It can be shown that a policy combining income transfers with consumer subsidies might achieve several nutritional (and income) objectives, and yield either better diets with a given fiscal outlay or a specified diet with a lower budgetary outlay [38]. Integration can go further, to combine both health and fiscal policy. This would require detailed knowledge of income distribution, the determinants of food and nutrient consumption, and the magnitude of their effect (price and income elasticities) in different income groups.


The internal efficiency of nutrition policies and programmes depends to a substantial degree on appropriate targeting, choice of intervention, and securing appropriate household behaviour. All in turn depend on knowledge of the determinants of malnutrition at the household level, the household's potential response to the programme, and the family's ability to use the programme resources. This paper has outlined the potential of household economics and econometrics as frameworks for organizing and studying determinants of the risk of malnutrition at the household level where the problem occurs, and constitutes an agenda for research.

Relatively few studies have been conducted, especially in programme environments, to yield basic knowledge about the determinants of malnutrition and programme impact (e.g. Narangwal). Some options for research (Tamil Nadu) have not been fully exploited. After a review of the nutritional consequences of agricultural projects, Martin [29] remarked:

A research program must be begun which generates the sort of quantitative data needed to permit an analytical determination of the links between adverse nutritional outcomes and their various causes. Initially, such research should probably concentrate on factors which may be considered important for theoretical reasons and for which there is supporting evidence in the existing literature.

While the micro-economic framework for studying and formulating nutrition policy and programmes, as well as evaluating them from the household perspective, is a relatively new application in nutrition, it is an indispensable tool.


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Supplementary bibliography

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