FAO is the main provider of country-level estimates of undernourishment covering the whole world. Its methodology has the main advantage of facilitating comparisons across countries and over time, but also has a limited capacity to understand the causes of food insecurity within countries (FAO, 2003; Barret, 2010). The upward trends in global food prices, concerning many staple commodities between 2005 and 2008, stimulated us to extend the principles of the FAO methodology in order to assess the impact of rising food prices on household-level food security. The objective of this methodological note is to provide a detailed description of the methodology applied in Anriquez et al. (2010), providing guidelines for measuring undernourishment, and more specifically dietary energy deficiency at the household level; and suggestions for the implementation of micro-simulations of food price variations. Additionally this note provides guidelines to construct household specific dietary energy requirements, instead of using a single threshold (generally, 2100 kilocalories per person per day) for all households.