Quadratic Almost Ideal Demand System Research Articles

Does expanding wild venison consumption substitute livestock meat consumption? Evidence from the demand systems analysis of meat products in Hokkaido, Japan

In many countries, growing deer populations cause environmental, economic, and traffic safety problems. This study sheds light on the potential implications of expanding the consumption of venison from hunted wild deer through deer population management efforts. It focuses on changes in environmental impacts resulting from changes in the demand for livestock meat due to increased consumption of wild venison. We analyzed the demand system between them using the Quadratic Almost Ideal Demand System (QUAIDS) model and scanner data from a grocery store chain in Hokkaido Prefecture, Japan. The results show that wild venison is a substitute good for pork and lamb. By contrast, wild venison is a complementary good for imported and domestic beef. Based on the estimated demand system model, we conducted an environmental footprint analysis to estimate the changes in environmental impacts when venison consumption increased. This shows that the greenhouse gas, water, and land footprints would increase, indicating greater environmental impacts, under a scenario of expanded venison consumption. The results demonstrate that increased venison consumption does not necessarily reduce the net environmental impacts of meat consumption, which depends on the demand system for meat products and the environmental footprint intensities of the respective products.

Price effects of residents' consumption carbon emissions: Evidence from rural and urban China

Price policy applied to specific products may mitigate consumption carbon emissions (CCE). Nevertheless, the extent to which price effects, such as carbon taxes, differ across income groups and between rural and urban areas in China remains uncertain. With unbalanced provincial panel data from 1999 to 2020, we estimated the demand elasticities of eight major groups of consumer goods and services across income groups separately in rural and urban areas of China, using the Quadratic Almost Ideal Demand System (QUAIDS) and the Exact Affine Stone Index Implicit Marshallian demand system (EASI) in this study. The estimated price elasticities were then used to predict the impact of different price policies on CCE. The results show that taxing the wealthiest individuals and subsidizing the poorest individuals in both rural and urban areas have a beneficial impact on the reduction in CCE. Moreover, expanding transfer payments can further facilitate reductions in CCE. Our findings suggest that achieving CCE equality can be realized through intra-urban and intra-rural transfers, as well as urban-rural transfers achieved by taxing urban residents and subsidizing rural residents.

Household Demand Analyses in Uyo Metropolis: A Study of Selected Determinants Responsiveness

The study is an attempt to evaluate household demand analyses in Uyo metropolis: a study of selected determinants responsiveness. The research employed survey data obtained from 200 households via individual interviews utilizing a meticulously designed questionnaire. Information on income, age, sex of household head, household size, educational background was collected to capture household demography. The data were also collected on household expenditure on the selected food and nonfood item, their respective prices and the quantity consumed in a given month. The study adopted the quadratic almost ideal demand system (QUAIDS) as a model. The result indicated that factors that affect household food expenditure on Rice, Beans and Garri are the prices of the goods, income, household size, level of education and the prices of other goods. Similarly, the study found negative compensated and uncompensated own price elasticity of demand for the food items rice, beans and garri while beer has a positive own price effect. All the goods were found to be price inelastic as their own price elasticity lies between -1 and 1. Again, all food items were found to have negative cross price elasticity and which is less than one indicating that they are substitutes and price inelastic. On the other hand, the study found evidence of complementary relationship between beer and food items like garri and beans. The study recommends that the government subsidize food prices, lower taxes on these goods, provide cash transfers to the poor, or promote the production of these food items by giving preference to farmers who produce them in order to lessen the impact of such price increases on the demand for these commodities.

Taxing sugar sweetened beverages in Indonesia: Projections of demand change and fiscal revenue.

The global trend of diets high in sugar sweetened beverages (SSB) is associated with a high risk of obesity and non-communicable diseases (NCDs). To reduce SSB consumption on a population level, SSB taxes have become a popular policy solution. In Indonesia, although the prevalence of obesity has doubled in the past decade (11.7% in 2010 to 21.8% in 2018), SSB taxes have not yet been implemented. Utilizing the 2021 Indonesian household socioeconomic survey (SUSENAS), this study estimated price elasticities and projected the plausible effects of implementing an SSB tax on consumers' demand for SSBs and the associated government revenue using the Quadratic Almost Ideal Demand System (QUAIDS) model. Five SSB groups were studied: 1) manufactured liquid milk; 2) sweetened condense milk; 3) instant coffee; 4) tea drinks and fizzy drinks with CO2; 5) fruit juices, "health" drinks, and energy drinks. The overall results showed that the non-milk SSB groups were price elastic. Probing deeper into the substitutions for SSB across categories, we found both substitutionary and complementary effects. Our analysis revealed that increasing SSB prices by 20% would reduce the demand for SSBs on average by 17.5% (14.3%-18.6% for each SSB group) and generate additional state revenue up to IDR 3,628.3 billion per year (approximately US$ 238.5 million or 0.2% of total tax revenue in 2022). Considering the health and economic impacts of high consumption of SSBs, this study provides empirical evidence that imposing taxes on SSBs could be an effective measure to reduce public consumption and to generate tax revenue for financing health programs that address obesity and NCDs in Indonesia.

Affordability and sustainability in the human right to water

PurposeThe purpose of this study is to analyze the affordability and sustainability of residential water consumption in Ecuador, a developing country.Design/methodology/approachTo determine affordability, the authors assess water consumption and its distribution across different income levels of the population in the three main cities: Cuenca, Guayaquil and Quito. The authors then simulate the effects of a pricing policy on sustainability by deriving demand elasticities through a quadratic almost ideal demand system (QUAIDS).FindingsResults show that Ecuador has low water tariffs with respect to other cities in Latin America, which points to its affordability. However, sustainability might not be guaranteed since consumption is overall higher than the level suggested by the World Health Organization. From an economic point of view, this could be motivated by the low tariffs. Indeed, the simulation of a pricing policy shows that higher prices can significantly reduce demand for most of the sample. However, in low-income households this reduction may compromise vital consumption.Research limitations/implicationsThis research has important implications in terms of stimulating the discussion of how water affordability and sustainability can be achieved. For the case study, Ecuador, the results indicate that sustainability may not be guaranteed and that policies need to be designed to encourage it. Another implication is that population income levels should be considered to avoid negative effects for the most vulnerable groups. The main limitations of this study are methodological. First, the QUAIDS model is based on a conditional demand model (Zhen et al., 2013), which does not take into account spending on other goods. Second, data availability is limited and prevents a deeper analysis.Originality/valueTo the best of the authors' knowledge, this is the first study to analyze these issues in Ecuador, a country that recognizes the human right to water at the constitutional level.

What's the influence of input's variation? Estimating the input elasticity in the global value chain

AbstractThis article presents a comprehensive framework for assessing the influence of input variation during the period of stagnant expansion of the global value chain (GVC) by incorporating input elasticity. Each import sector is treated as a complete input demand system with a stochastic preference for input in the framework of Ghosh Inverse, and the input elasticity is employed to quantify the input variation based on the Quadratic Almost Ideal Demand System (QUAIDS) model. New empirical evidence covering three major regional value chains (RVCs) and the time span from 2010 to 2020 reveals that increasing input elasticity leads to additional output for most countries, except those within the North American RVC. Additionally, this article also discusses how external determinants have diverse extents influence to input elasticity, while the substitution effect among homogenous input in the specific input demand system may decide their input's competitiveness.

Price elasticity of demand for ready-to-drink sugar-sweetened beverages in Brazil.

The taxation of sugar-sweetened beverages is a policy that has been adopted in many countries worldwide, including Latin American, to reduce sugar consumption. However, little is known about how taxation on these products may affect their demand. The present study aims to estimate the price elasticity of demand for sugar-sweetened beverages in Brazil. This study advances the literature by proposing a breakdown between ready-to-drink sugar-sweetened beverages and sugar-sweetened beverages that require some preparation before being consumed. With this disaggregation, it is possible to obtain more accurate elasticities for the group of products that will be effectively taxed. We estimated a Quadratic Almost Ideal Demand System (QUAIDS) model using the Household Budget Survey 2017-2018 microdata. The results show that ready-to-drink beverages is more consumed but less sensitive to changes in price than prepared beverages. The price elasticity of demand for ready-to-drink and prepared sugar-sweetened beverages was -1.19 and -3.38. Additionally, we observe heterogeneity in these price elasticities across household incomes, with a more elastic demand among lower-income households for ready to drink beverages. The findings suggest that taxing ready-to-drink sweetened beverages could potentially reduce sugar consumption directly through a decrease in the consumption of sugary drinks and this effect could be reinforced by reducing the consumption of other sugar-rich products. Therefore, the taxation police should effective contribute to minimize health risks associated to the sugar consumption.

Estimating Household Price and Income Elasticities for Animal-Sourced Food: The Case of Bengkulu Province, Indonesia

Bengkulu is one of the provinces in Indonesia where household protein consumption is still below the national protein recommended allowance. This paper examines the effect of price, income and socio-demographic factors on household demand using the Quadratic Almost Ideal Demand System (QUAIDS) model and data from the Indonesian National Socio-Economic Survey (Susenas) in March 2021, which includes 5,079 households. The QUADS parameters were estimated using the Iterated Nonlinear Seemingly Unrelated Regression technique with theoretical restrictions imposed. The estimated parameters from the model were utilized to derive price and income elasticities for animal-derived foods. Empirically, it was found that fish is the most elastic animal-sourced food with a demand elasticity of 4.44%, followed by beef (2.78%), milk (1.94%), poultry (1.54%), and eggs (0.82%). Fish substitutes for beef, chicken, and eggs when prices increase but is complementary to milk. Four animal-sourced food groups, namely fish, beef, milk, and poultry, are luxury items, with income elasticities of 2.57%, 2.39%, 2.22%, and 1.36%, respectively. In contrast, eggs were found to be a normal good with an income elasticity of 0.53%. Fish and beef are very elastic; thus, the government can use pricing strategies and implement policy to increase poultry and eggs production so that daily protein requirements of 57 grams per capita per day are reached in Bengkulu province.

New Capital Relocation of Indonesia: Estimating Food Demand in East Kalimantan and Jakarta

This research examines the current state of food demand and its influencing factors in East Kalimantan and Jakarta, considering the relocation of Indonesia’s capital city. Using the Quadratic Almost Ideal Demand System (QUAIDS) method and 2021 Susenas data, we have analyzed the impact of variations in food prices, income, and demographic variables on seven food categories—rice, grains, tubers, legumes, animal protein, fruit & vegetables, and prepared food. Our findings reveal that increased income increases demand for animal protein and fruit & vegetables in East Kalimantan but decreases in Jakarta. In both regions, as expenditure increases, rice consumption decreases while the demand for prepared food increases. An increase of 1% in rice prices will reduce rice consumption by approximately 0.334-0.487% in East Kalimantan and 0.126-0.202% in Jakarta. Households in East Kalimantan consume more prepared food when prices for other food items increase. In Jakarta, prepared food consumption decreases as rice prices go up. Demographic factors play a crucial role in determining food demand. For example, public sector employees in East Kalimantan consume more rice and less prepared food, while in Jakarta, they prefer prepared food and consume less rice. It is essential to pay adequate attention to the demand for food for public workers who will move to East Kalimantan and the demographic factors that influence it. This consideration will ensure that the residents of East Kalimantan and those who relocate to the new capital receive the necessary food provisions.

The dynamics of strategically important food preference in Indonesia: An empirical evaluation of consumption pattern and welfare loss

This study evaluated regional heterogeneity in food consumption patterns across Indonesia. The demand system for strategically important food commodities was estimated for five regions: Sumatera, Java-Bali, Kalimantan, Sulawesi, and Nusa Tenggara-Maluku-Papua (Nusmapua). A two-step budgeting procedure based on the Quadratic Almost Ideal Demand System (QUAIDS) framework was used to estimate the unconditional elasticities of each food item in each regional setting, together with household data from the 2018 national socio-economic survey by Statistics Indonesia. The results showed that elasticities differ significantly across the regions, suggesting that regional heterogeneity needs to be considered when estimating demand structure. The estimated elasticities were used to conduct a welfare impact analysis of a simulated price increase, which showed that disregarding regional heterogeneity can overstate or understate welfare loss caused by price increases.

Effects of COVID-19 on Food Demand in Rural Indonesia: The Case of Bengkulu Province

This paper examines food demand before and after the outbreak of COVID-19 and studies the effects of the situation on households’ demand for food in rural Indonesia, in the case of Bengkulu Province. The research data is taken from the Indonesia Socio-Economic Survey (SUSENAS) as a microdata set which is collected annually by Indonesia Central Statistics Agency (BPS) from 2017 to 2021. The effect of COVID-19 on food demand estimates using the Quadratic Almost Ideal Demand System (QUAIDS). The results demonstrate that prepared food expenditure is the largest portion of household expenditure on food in the Bengkulu rural area. Before the outbreak of COVID-19, animal source food is the most sensitive to food expenditure, but after the outbreak, prepared food is the most sensitive. Staple food is the most expenditure-inelastic before and after the outbreak. Expenditure for animal source food, vegetables & fruits, and prepared food have significant differences between before and after the outbreak. All the food groups substitute for each other before the outbreak, whereas staple food and prepared food cannot be regarded as a substitute for each other after the outbreak. There are eleven of the compensated price elasticities whose differences between before and after the outbreak are significant, whereas as a set the compensated price elasticities are significantly different between before and after the outbreak. Other food is the easiest to be substituted for both phases. Prepared food is the most difficult to be substituted before the outbreak, but the staple food is the most difficult to be substituted after the outbreak. After the outbreak of COVID-19, the demand for vegetables & fruits increases, but the demand for staple food and prepared food decreases, ceteris paribus. Family size, children, gender, age, and other demographics variables have an impact on household food demand. These findings imply that after the outbreak, the supply of vegetables & fruits should be increased and that government support for suppliers of staple food and prepared food will be preferable.

The effect of rising food prices on nutrient intake among rural–urban migrants in China

PurposeThe purpose of this study is to assess the impact of rising food prices on food demand and nutrient intake among rural–urban migrants and whether such impact varies across income classes.Design/methodology/approachUsing data from the China Health and Nutrition Survey (CHNS), this study adopts a quadratic almost ideal demand system (QUAIDS) for food demand elasticity and an indirect estimation method for nutrient elasticity to investigate the effects of rising food prices on food demand and nutrient intake among rural–urban migrants.FindingsThe estimated results indicate that an increase in the price of pork alone would lead to a larger reduction in most nutrients among rural–urban migrants than other single targeted food group, and a simultaneous rise in the price of all food groups would have a remarkably adverse effect on the nutritional status of rural–urban migrants in comparison to the nutritional effects of a rise in one targeted food group. In addition, the nutritional effects of food prices across income classes show that the nutritional status is particularly vulnerable to rising food prices among low-income rural–urban migrants.Originality/valueThis paper focuses on analyzing the impact of rising food prices on the nutritional status of rural–urban migrants, a topic that is very limited in the literature. This study provides a fresh look at the effect of volatile food prices on food demand and nutrient intake among rural–urban migrants. The results indicate that income growth would have a remarkable positive effect on nutrient intake for rural–urban migrants, especially for low-income rural–urban migrants. However, an increment in nutrients due to a growth in income would not be far from enough to cover the reduction in nutrients as a result of a simultaneous rise in price of all the studied food categories at the same rate.

Out- Of- Pocket health expenditure and household consumption patterns in Benin: Is there a crowding out effect?

Health shocks are common and have serious consequences for households in developing countries where health insurance is lacking. In this study, we examine whether out-of-pocket health expenditures crowd out household consumption of non-healthcare necessities, such as education items in Benin using a sample of 14,952 households from the global vulnerability and food security analysis survey. We estimated a system of conditional Engel curves with three stage least squared (3SLS) and seemingly unrelated regression (SURE) for seven categories of goods using the Quadratic Almost Ideal Demand System (QUAIDS) in the form of budget shares corresponding to proportions of total non-health expenditure. Findings show that out of pocket health expenditure leads households to spend more on health care that in fine crowd out expenditure in other necessity goods such as education item. These findings highlight the need for social protection programs to mitigate the impact of health shocks on vulnerable households in Benin.

Food Demand and Its Differential Effects on Household Food Access in Nigeria

This paper aims to examine how urban households’ food demand pattern differs with the extent of urbanization using a cross-sectional survey in southwest Nigeria. Using principal component analysis, sampled households were categorized by urbanicity index. A quadratic almost ideal demand system (QUAIDS) was employed to estimate expenditure and price elasticities. From the result, all seven food groups were normal goods across the urban categories, with the meat group being more expenditure-elastic than the others (1.16–2.42). The own-price elasticities differ among food commodities, with the meat and roots/tubers groups being most elastic at the low (−1.35) and middle (−1.05) urban categories, respectively. Findings suggest that changes in urbanicity levels have a substantial impact on the composition of household food demand and, by extension, the extent of food access in Nigeria. Therefore, the use of aggregate demand estimates for the entire urban population might underestimate the effect of expected changes in the urbanization level on food demand. JEL Classifications: C31, D12, Q18

Estimation of sharing rule: an application of intra-household collective model on Indian data

PurposeMany aspects of well-being depend critically on individual-level expenditure and consumption. The Millennium Development Goals include the promotion of gender equality and the empowerment of women, which partly have to do with women’s access to resources within households. Many important questions in labour, public and development economics also hinge on the intra-household distribution of resources. This paper aims to estimate the resource shares within a household in the rural and urban sectors of West Bengal through a collective household model, where each household member has a specific utility function. The sharing rule parameters, that determine the apportionment of resources between members within a household, are estimated in an intra-household collective framework. The analysis is based on a system of log-quadratic Engel curves estimated using the 68th round (2011–2012) household-level consumption expenditure data of the Indian National Sample Survey Office (NSSO) for rural and urban sectors separately for the state of West Bengal.Design/methodology/approachThe sharing rule parameters (that determine the apportionment of resources between members) within a household are estimated in an intra-household collective framework as suggested by Dunbar et al. (2013). The analysis is based on a Quadratic Almost Ideal Demand System (QUAIDS) estimated using the 68th round (2011–2012) household-level consumption expenditure data of the Indian NSSO.FindingsIn this paper, the authors estimate the sharing rule of total household expenditure between couples in a household in the state of West Bengal. They use a modified version of the QUAIDS and the 68th round (2011–2012) household-level consumer expenditure data provided by the NSSO. From the exercise, it emerges that on an average, the resource shares between husband and wife in a household is about 66:34% in the rural sector and about 60:40% in the urban sector. Based on a classification of households by the distribution of resource shares, where higher resource share for the husband is classified as “Husband dominated” and the reverse as “Wife dominated”, the percentage of “Husband dominated” households is much more in both sectors. This unequal distribution of resources may have far-reaching consequences on allocation of expenditure on the children of the household. The authors leave this exercise as a future project.Originality/valueThis paper is an attempt to estimate the sharing rule for households using NSSO consumption expenditure data. This paper also highlights the intra household unequal resource allocation through the sharing rule. They use a modified version of the QUAIDS and the 68th round (2011–2012) household-level consumer expenditure data provided by the NSSO. From the exercise, it emerges that on an average, the resource shares between husband and wife in a household is about 66:34% in the rural sector and about 60:40% in the urban sector. Based on a classification of households by the distribution of resource shares, where higher resource share for the husband is classified as “Husband dominated” and the reverse as “Wife dominated”, the percentage of “Husband dominated” households is much more in both sectors. This unequal distribution of resources may have far-reaching consequences on allocation of expenditure on the children of the household. The authors leave this exercise as a future project.

The Effect of Taste on Papuan Local Consumption

This study aims to determine the effect of tastes on local food consumption in an econometric analysis of the food demand structure in Papua Province. This study used the 2019 National Social and Economic Survey (SUSENAS) with 13.151 households conducted by Statistics Indonesia (BPS). The method used is Quadratic Almost Ideal Demand System (QUAIDS) with Iterated Linear Least Square (ILLS) estimator. The results show that education, household size, location, age, the job of the head of the household, and income group affect local food consumption. When urbanization, education, and income increase, they tend to reduce local food consumption and shift food choices from local food because it is difficult to obtain. The influence of taste from the socio-demographic side has different taste factors between urban and rural. Therefore, the government needs to increase understanding through education about food diversity and good nutrition because local food has a higher nutritional content than rice or other foods. In addition, it is necessary to increase the horizontal diversification of local food, provision a market for local-food distribution, and increase income because the economic condition in Papua is still low, so they are vulnerable to food security.

Food demand and the nutrient intake of households in underdeveloped rural regions of China: an instrumental variable approach

PurposeThe purpose of this paper is to evaluate the effects of price and income changes on food and nutrient demand of rural households by including own-produced food and production-side effects in the demand estimation to correct potential measurement bias in the income and price elasticities for rural households in underdeveloped areas. Simulation results of income and grain price changes on food and nutrition security are provided for economic nutrition security policy applications.Design/methodology/approachThis study analyzes survey data of 1,555 households from underdeveloped rural areas of China to find out how price and income changes affect food and nutrition insecurity of rural households. The authors employ the quadratic almost ideal demand system (QUAIDS) in a two-stage budgeting framework, using quality adjusted prices that were retrieved with regressions of the difference between the unit value surveyed at household level and its village average on household characteristics. The bias correction is implemented by using an augmented IV (instrumental variable) method, in which each market price is instrumented with farm-specific variables. Important macro- and micronutrient elasticities are computed for (a) households with agriculture as main income and (b) other households (of which still many have agriculture as a side business). Finally, the authors use these elasticities to simulate how changes in income or grain prices affect the food and nutrition security in the studied areas.FindingsIn general, food income elasticities of agricultural households are at a higher level than those for other households, and so are the food price elasticities. Income changes also have a greater nutritional effect on agricultural households than on other households. Nutrient income elasticities ranged from 0.22 (energy) to 0.27 (Vitamin A) for agricultural households and from 0.19 (energy) to 0.23 (Vitamin A) for other households. Grain price increases have greater effect on nutritional status of non-agricultural households, while a grain price reduction is not clearly favoring the nutritional situation of a particular household group.Originality/valueThis demand study contributes to the literature by taking into account differences in consumption of own production between households and the potential endogeneity of prices resulting thereof. The authors also demonstrate that merely reporting nutrient elasticities might not be sufficient for policy recommendations, and simulations should be reported as a valuable addition.

Rural Household Food Consumption in Bengkulu, Indonesia: Estimating a Demand System Based on SUSENAS Microdata

The paper aims to estimate the food demand of rural households in Bengkulu Province, Indonesia, using the Quadratic Almost Ideal Demand System (QUAIDS) and microdata from the SUSENAS. We aggregate food into five groups: staple food, animal food, vegetables & fruits, prepared food, and other food. The results show that demand for animal food is the most sensitive to food expenditure, whereas the demand for staple food is the most expenditure-inelastic. Staple food, animal food, vegetables & fruits, and other food are substitutes for each other. On the other hand, prepared food and staple food complement each other. Other food is the easiest to be substituted, and staple food is the most difficult to be substituted. The demographic variables, as well as prices and expenditures, impact household demand. For example, as family size increases, the demand for staple food increases, while the demand for animal food, vegetables & fruits decreases. The number of children under five years old has a positive impact on animal food demand but a negative impact on staple food and other food demand. Staple farmer households have a higher need for staple food than non-agricultural households. Due to being unmarried, divorced or bereaved, single households have a lower demand for staple food but a higher demand for prepared food. We mainly imply that the food price stabilization policy should emphasize animal food, especially beef and poultry, without increasing prices.

How would the carbon tax on energy commodities affect consumer welfare? Evidence from China's household energy consumption system.

Although carbon tax policies can effectively restrain energy consumption and reduce pollution, they will also affect the welfare of residents through a price mechanism. We explore the impact of energy price increases that are caused by possible carbon tax policies on the welfare of residents in China with a quadratic almost ideal demand system (QUAIDS) model. The estimated elasticities show that the income elasticity of coal demand is -0.741 for urban residents, compared to 0.392 for rural residents. The cross-price elasticity shows that China's residential energy consumption has moved up the clean energy ladder. Based on the above reliable elasticity estimates, the welfare effects are analyzed in the residential consumption system. The overall welfare loss for residents increases with the level of carbon tax. A carbon tax on all energy sources is a regressive policy for China, and when the carbon tax rate reaches the world average, of 30 USD/tCO2e, the welfare loss for low-income and high-income residents is 1.55% and 0.62% respectively. However, the separate imposition of carbon taxes on different energy sources shows the heterogeneity of the welfare impacts of carbon taxes. At the national and urban levels, the distribution effects of carbon taxes are regressive for coal, LPG, and electricity, progressive for gasoline, and distributional neutral for natural gas. In rural areas, however, the welfare distribution effect of the carbon tax on diesel, LPG, and natural gas are progressive, and the welfare effects of carbon taxes on electricity show an inverted U-shaped distribution. Our findings are conducive to the development of a differentiated carbon tax policy by the Chinese government.

A Disaggregated Analysis of Fish Demand in Myanmar

We estimate demand elasticities for fish in Myanmar by fish supply sources and household groups, using a multistage budgeting approach combined with quadratic almost ideal demand system (QUAIDS). Our findings show that fish demand from all supply sources and household groups has increased with income. A substantial share of increasing demand for all fish groups is likely to come from poor and rural households because the income elasticity of demand for all fish groups is higher for poor (0.40) and rural households (0.32) than for nonpoor (0.26) and urban households (0.29). Farmed-fish consumption is the most income-responsive in all household groups. Demand for fish tends to be less price elastic for poor households because fish is their cheapest animal protein source, and substitutes are limited. Effective management policies and new technologies are essential to sustain fish supply from capture fisheries and aquaculture to meet the increasing fish demand in Myanmar.