Abstract
<p>The quantity and quality of food consumed by the community are determined by the price level and household income. Household food expenditure share is still dominated by rice commodities. The aims of this study are 1) to analyze the level of household expenditure on food in Java and (2) to analyze the expenditure elasticity and price elasticity of household food demand in Java. The data used was March 2015, 2016, and 2017 SUSENAS data. Household consumption data was estimated using the AIDS Model. The results showed that household food expenditure share for medium and low-income groups (Q3 and Q4) for urban and rural areas was more than 50 percent. This shows that the household is food insecure. The own-price elasticity for all commodities is negative and inelastic. Changes in food prices do not significantly affect changes in demand for food commodities because their elasticity is inelastic. Household food demand is more influenced by food prices than household income for food commodities except for rice commodities. Rice has elastic expenditure elasticity (means that food demand is very responsive to changes in household expenditure/income. The relationship between each commodity is almost entirely negative (complementary).</p>
Highlights
The proportion of Indonesian people's food expenditure is relatively higher than the proportion of non-food expenditure
The share of household food expenditure in urban and rural areas for income groups Q3 – Q4 is more than 50 percent and is still food insecure
Price elasticity itself is elastic, which means that changes in demand for food commodities are not responsive to changes in their ownprices
Summary
The proportion of Indonesian people's food expenditure is relatively higher than the proportion of non-food expenditure. Fulfillment of primary needs both food and non-food related to poverty (Nicholson, 1995). The proportion of food expenditure to all household expenditures can be used as an indicator of poverty. The higher the welfare of the people of a country, the share of food expenditure of its population will be smaller and vice versa (Deaton & Muellbauer, 1980). The share of food expenditure to all household expenditures can be used as an indicator of poverty. The higher the welfare of the people of a country, the proportion of food expenditure of its population will be smaller and vice versa (Deaton & Muellbauer, 1980)
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