The Role of Rice’s Price in the Household Consumption in Indonesia

Dian Hafizah,Harianto Harianto,Rita Nurmalina,Dedi Budiman Hakim

doi:10.21107/agriekonomika.v9i1.6962

Abstract

The purpose of the study was to analyze the role of rice’s price in household consumption patterns in Indonesia. The method used was the Quadratic Almost Ideal Demand System (QUAIDS). The data used were obtained from the National Social Economy Survey in 2016. The results show that when the price of rice increases by one percent, the demand for other carbohydrates, eggs-milk-beans, fruits also Cigarette and processed foods will be increase. Meanwhile, in other groups, when the price of rice rises, the demand will go down. Thus, it can be concluded that households still prioritize rice consumption in their daily consumption patterns compared to other commodity groups. Therefore, the government should develop policies that encourage people to consume more diverse food groups.

Highlights

IntroductionFood consumption in Indonesia is still dominated by food with high carbohydrates
Food consumption in Indonesia is still dominated by food with high carbohydrates.As the consumption of the Indonesian population increases, the amount of rice consumption increases
This study aimed to analyze the role of rice price in household consumption in Indonesia compared to other food commodities

Summary

Introduction

Food consumption in Indonesia is still dominated by food with high carbohydrates. As the consumption of the Indonesian population increases, the amount of rice consumption increases. Before the self-sufficiency program around 1980, Indonesia’s rice consumption was 19.10 million tons and increased to nearly. 25 million tons in 1989.This number was continued to increase to reach 33.30 million tons in 2015 (Setiawan, 2016). The challenge faced by Indonesia as a country with a large population is how to meet people’s consumption needs. Every year the demand for rice increases with an increasing population (Silalahi et al, 2019).

Objectives

Methods

Results

Conclusion