Estimation and Analysis of Food Demand Patterns in Vietnam

Linh Hoang Vu

doi:10.3390/economies8010011

Abstract

The paper analyzes food consumption patterns of Vietnamese households, using a complete demand system and socio-demographic information. Demand elasticities are estimated applying a modified Almost Ideal Demand System (AIDS) model on the Vietnamese household survey data in 2006. The results indicate that food consumption patterns in Vietnam are affected by income, price, as well as socio-economic and geographic factors. All food has positive expenditure elasticities and negative own-price elasticities. Rice has mean expenditure elasticity of 0.36 and mean own-price elasticity of −0.80. Using the estimated elasticities, the study finds that when rice prices increase by 20 percent, average household welfare rises by 1.3 percent, yet it is important to note that the benefits and costs are not spread evenly across the population. Overall, middle-income households gain the most, while the poorest households gain the least from higher rice prices. This indicates that support programs should target the poorest quintile, especially the poor in the regions hit hardest by higher prices. More generally, our study points out that targeted food policies should be formulated based on specific food demand patterns in the groups.

Highlights

Household food consumption has long been an important area of research for economists.Studies on food consumption help to provide a better understanding of how the demand for food responds to changes in food prices as well as changes in household income
In developing countries, where a large percentage of household expenditure is allocated to food, consumer expenditure surveys are useful because they can provide information on specific subpopulation of households that are more likely to be affected by changes in commodity prices or household incomes
The results indicate that food consumption patterns in Vietnam are affected by income and prices, as expected, and by socio-economic and geographic factors

Summary

Introduction

Studies on food consumption help to provide a better understanding of how the demand for food responds to changes in food prices as well as changes in household income. This information is essential for evaluating the welfare effects of many types of economic shocks as well as the welfare impacts from trade liberalization or a change in tax policy. Demand analysis can be based on either aggregated time-series data or household surveys. In many developing countries the availability of reliable time-series data on aggregate demand, prices, and income is limited. Many household surveys implemented in these countries provide rich and reliable micro data on household consumption patterns. Income policies may be more effective in enhancing meat and fish consumption than price policies, as the expenditure elasticities of these foods are higher than their

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Conclusion