To what extent do household expenditure and prices affect the demand for rice in northern Ghana

Abstract

Rice (Oryza sativa, L.) is considered staple food for nearly one half of the world’s population. The consumption of rice is becoming staple in many locations like in West Africa and specially in Ghana where the majority of the urban consumers value its convenience and taste. Despite its nutritional content, convenient attribute and increasing demand, the consumption of rice in the West Africa, particularly in northern Ghana, is still very little studied. Little is known about the demand for rice in the northern Ghana though this region includes over 30 % of the whole Ghanaian population. Specifically, knowing how on average household responds to a change in price or and expenditure considering their demand for rice are still missed in the current literature. This study seeks to address this knowledge gap by estimating expenditure and prices elasticities of demand for rice in the northern Ghana region. A QUAIDS model were estimated using consumer data collected from approximately 4,600 randomly selected households. A descriptive analysis of the study data indicates that more than 50 % of the respondents did consume rice. Moreover, households allocated the most part of their foods budget share to the consumption of cereals, and also to animal protein like meat and fish instead of to vegetable protein like legumes. The QUAIDS analysis indicates that all food categories like cereals including rice, roots/tubers, animal protein (meats, fish) have a positive expenditure elasticity across all income groups which strengthen the assumption that they are all normal goods. Same findings were obtained at both compensated and uncompensated prices elasticities. All the food categories had a negative compensated and uncompensated own price elasticity except the group of legumes which has a positive compensated own price elasticity. Though, all foods categories have a negative own price elasticity, the consumption of legumes has a positive own price elasticity. Several reasons were indicated to explain this surprising result among which the procedure used in generating the prices, and the main focus of the survey which was not on legumes consumption. Further research should redo this analysis by contrasting the locally produced rice to the imported rice to better understand the role that rice consumption plays in household’s food consumption.