Abstract
This paper analysed food consumption patterns in Ghanaian urban households by comparing food commodity budget shares and estimating price and expenditure elasticities for eleven food commodity groups across different income groups. The Linear Approximation Almost Ideal Demand System (LA/AIDS) was applied to the data. Demand for most of the food commodity groups was found to be elastic. The study concluded that generally, across income groups, food commodities respond negatively to changes in food prices and that cereals/bread, roots/tubers, vegetables, meat and fish will remain an important component of urban household food expenditure. Generally, household demographic characteristics such as age, gender and household size had significant effects on urban food demand patterns.
Highlights
According to the 2010 census report by the Ghana Statistical Service, the proportion of the Ghanaian population living in urban areas is 50.9 percent and this urban population is growing at a rate of 3.5 percent annually
This implies that for a luxury good, demand increases more than proportionate with an increase in income whiles demand for a necessity increases less than proportionate with an increase in income
Expenditure and price elasticities were estimated across different income groups
Summary
According to the 2010 census report by the Ghana Statistical Service, the proportion of the Ghanaian population living in urban areas is 50.9 percent and this urban population is growing at a rate of 3.5 percent annually. The food commodities were aggregated as Bread/Cereals, Roots/Tubers, Meat, Pulses/Nuts, Fats/Oils, Fish, Dairy, Fruits, Vegetables, Cooked Meal and “Others”. Figures for the first quintile (Table 1) indicate that, with an increase in income, urban households in this quintile will consume more cereals/bread, dairy, fats/oils, fruits, roots/tubers and “other” foods.
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