Household food consumption patterns in many developing countries are currently undergoing rapid changes. This ‘nutrition transition’ is characterised by a shift from a traditional, less processed, plant-based diet to one that features more meat, sweets, and oils. The extant literature on nutrition transition has used indirect approaches to characterise changes in dietary transition with a strong emphasis on the associated drivers of this change. However, the literature has thus far ignored the use of a more direct approach in exploring the nutrition transition process and its implications for measuring household welfare. Therefore, this thesis developed a calorie-based approach to explore nutrition transition and its implications for measuring poverty using household-level data from Sri Lanka. The thesis examines the most important drivers behind this nutrition transition, such as calorie satiation and education, and develops a novel approach for measuring household poverty. Overall, the thesis emphasises it is crucial to develop a calorie-based approach when modelling nutrition transition and devising effective poverty reduction strategies to improve the standard of living for poor and vulnerable households, particularly in developing countries.