Household’s demand for Food Commodities in Pakistan: Issues and Empirical Evidence

Abstract

The household's demand analysis is very crucial in the sense that undernourishment negatively affects productivity. Food demand is crucial to gauge the household's ability or willingness to purchase/consume different food commodities. The study attempts to analyze the household's food demand in Pakistan by estimating the Quadratic Almost Ideal Demand System (QUAIDS) on Household Integrated Income and Consumption Survey (HIICS) 2015-16 data. It has been found that the household's locality, dependency ratio, living in own house, age and level of education of household head have significant impacts on demand for different food commodities. It has been further found that hoteling, fruits & dry fruits, soft drinks & bottled water, bakery products, beef & mutton, chicken &seafood are luxury goods. Eggs, sugar & sweets, pulses, tea & coffee, vegetables, rice, and edible oil & ghee are necessity goods. The spices, milk & yogurt and wheat are close to sticky food items. The price elasticities suggest that the demand for beef & mutton, seafood, eggs, and soft drinks is relatively elastic in comparison to other food commodity groups. Moreover, the demand for tea & coffee is least elastic revealing that price of tea has a very marginal impact on its demand.

Validating LA/AIDS model in the food market of Pakistan

“…The findings of the study exhibited that the income elasticities are positive. Akram (2020) proposed a conceptually identical work, utilizing a different but similar method. The author also conducted a demand analysis on different food commodities of Pakistan by estimating the QA/AIDS model.…”

“…The question of how household adjusts their consumption patterns in response to changes in income and price encourages several researchers to conduct studies in different contexts to observe the behavioral pattern of consumers. Different researchers, academicians, and policymakers strongly believe that the development of an economy is highly correlated with the consumption pattern of households as consumption patterns make welfare analysis easier ( Ullah, 2018 ; Akram, 2020 ). The consumption patterns of households are also useful in business progress as the whole investment setup relies on the consumption patterns of a country ( Akram, 2020 ).…”

“…Different researchers, academicians, and policymakers strongly believe that the development of an economy is highly correlated with the consumption pattern of households as consumption patterns make welfare analysis easier ( Ullah, 2018 ; Akram, 2020 ). The consumption patterns of households are also useful in business progress as the whole investment setup relies on the consumption patterns of a country ( Akram, 2020 ).…”

Households food consumption pattern in Pakistan: Evidence from recent household integrated economic survey

“…They reported that milk, meat, and fruits are luxury food items. In other study, Akram [ 24 ] found that beef, mutton, chicken meat, seafood, fruits and dry fruits are income elastic whereas milk and yogurt are income inelastic. In a similar fashion, Hameed and Salman [ 25 ] revealed that meat and fruits are luxury food items however, they declared dairy as necessity food item.…”

“…Therefore, imposition of any income tax on household personnel income could reduce consumption of these food commodities. After a one year break, Akram [ 24 ] analyzed the household's food demand in Pakistan by estimating the QUAIDS on HIES for the year 2015–16. The study found that hoteling, fruits & dry fruits, soft drinks & bottled water, bakery products, beef & mutton, chicken & seafood are luxury food items whereas eggs, sugar & sweets, pulses, tea & coffee, vegetables, rice, and edible oil & ghee are necessity food items whereas the spices, milk & yogurt and wheat are sticky food items.…”