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The Effect of Socioeconomic Variables on Provincial Bread Demand Using QAIDS Model

Taha Mehrani (), Fatemeh Ghasemimand () and Ali Asghar Salem ()
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Taha Mehrani : University of Tehran
Fatemeh Ghasemimand : Shahid Beheshti University
Ali Asghar Salem : Allameh Tabataba'i University

Journal of Money and Economy, 2019, vol. 14, issue 4, 525-554

Abstract: In this study, the effect of socioeconomic variables on provincial bread demand using the QUAIDS model has been investigated. In this model, socioeconomic variables such as age, gender and marital status of the head of household, the education level of the head of household and spouse’s head of household, household size, and occupation status of the head household have been used. The virtual variable of the target law of subsidies is also used to study the effects of this policy. To this end, the quadratic almost ideal demand system was applied. This model has been estimated using the consolidated data and Iterated Linear Least Squares Estimator and the information of more than 165,000 urban households in Iran for the years 1386-1394 and for different provinces. The results of the research show that during the studied years, bread is an essential good for all provinces except in Isfahan, Chaharmahal o Bakhtyari, and Kohgilouye. The compensated and uncompensated price elasticities of bread for all provinces are negative and less than one, so the bread is an inelastic good for all provinces. Also, the coefficients related to household size, gender, and marital status of the head of household and the target law of subsidies are positive and significant.

Keywords: Bread Demand; Quadratic Almost Ideal Demand System; Socio-Economic Variables; Iterated Linear Least squares Estimator; Reforming Subsidies (search for similar items in EconPapers)
JEL-codes: Q25 C33 D12 (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:mbr:jmonec:v:14:y:2019:i:4:p:525-554