An Evaluation of the Structure of Essential Commodities Demand in Agricultural Sector: Including Demographics

Document Type : Research Paper

Authors

• Mehri Ahmadi Javid ¹
• Sadegh Khalilian ²
• Seyed Habibollah Mosavi ²
• Hamed Najafi Alamdarlo ²

¹ Ph.D. of Agricultural Economics, University of Tarbiat Modares

² Associate Professor of Agricultural Economics, University of Tarbiat Modares

10.30495/jae.2024.29913.2320

Abstract

Introduction: The effectiveness of different economic policies depends on the full recognition of demand structure and household consumption pattern. So, estimating the demand and different elasticity has an important effect on food security and consumers' health and welfare.
Materials and Methods: In this study, the method of seemingly unrelated regression (SUR) and the quadratic almost ideal demand system containing demographic variables, is used to estimate the demand system. For this purpose, the raw data of household expenditure and income plan for the year 2020 is used
Findings: The results show that all the compensated and relative uncompensated price elasticity of urban and rural households are negative and less than one in 2020. So, it seems that all the commodity groups are really essential. Also, the result of the meat, sugar and milk groups(total households) and oil and beans groups(rural households) expenditure elasticity is more than one and the expenditure elasticity of the other groups is positive and less than one.
Conclusion: As for the importance of "meat" group, considering the pricing model for the commodity in the household food basket is very important. Since the income effect of the group is high, so it is suggested that the most supportive help of the food group being applied to access the initial satisfaction level, because the commodity' prices will increase daily

Keywords

• Agricultural commodities demand
• household demographic variables
• QUAIDS

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