An Analysis of Seasonal Demands for Fruits Using Households Panel Data

Abstract

The purpose of this paper is to analyze households seasonal demands for fruits. The households were divided into several group by income level. We used monthly fruits purchasing data obtained from households panel survey conducted by the Rural Development Administration and the retail fruits price data available at KAMIS. We employed Almost Ideal Demand System (AIDS) model with panel fixed effects to estimate the households demands for fruits. According to estimation results, own price elasticities of seasonal demands for most fruits were found to be very elastic, regardless of seasons. The demands for fruits consumed only at some specific seasons were less sensitive to price changes compared to those consumed all year round. In addition, the fruit demands of higher income households were less sensitive for changes in their prices, compared with those of lower income households. Considering differences in the demands for fruits by seasons and income levels, and substitutability between domestic fruits and imported fruits, fruits price stabilizing policy as well as marketing strategies such as developing premium fruit products and export promotion are necessary to increase demands for domestic fruits.