At present, Latin America is in a paradox, as the effects of both extremes of poor nutrition, obesity, and undernutrition, are present simultaneously in a region where the food supply is much greater than it has been historically and in most cases exceeds the population's dietary energy requirements. The prevalence of undernutrition is not a mere accident in the region, but a reflection of huge disparities in income and the lack of priority given to food and nutrition issues on the countries' political agendas. Aside from the ethical imperative to eradicate undernutrition, and the goals the countries set for themselves after the Millennium Declaration, it is necessary to analyse the economic consequences in order to support decision-making and allocate the resources needed to eradicate this scourge. Thus, in view of the social and economic impact of child undernutrition and hunger in the region, the World Food Programme (WFP) and the Economic Commission for Latin America and the Caribbean (ECLAC) agreed to conduct a joint study for the purpose of estimating the costs that this problem entails for each country. This document presents the model of analysis developed, which includes first a theoretical framework describing the main causes of undernutrition, the corresponding specific variables and interrelationships, and the consequences that arise from this scourge. The second part presents the methodology proposed for estimating the effects and associated costs based on data currently available in the countries of the region.