A Food Demand System Estimation for Rural Malawi: Estimates Using Third Integrated Household Survey Data

Assa Mulagha Maganga, M. Alexander R. Phiri, Lawrence D. Mapemba, Gebrelibanos Gebremariam and Josephy K. Dzanja

No 174853, 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota from Agricultural and Applied Economics Association

Abstract: In contrast to the myriad of empirical work on food demand in other countries, very few studies have considered zero expenditures on some food groups. Those which have attempted have been based on techniques which result in endogeneity and inefficient estimates which in turn may misinform policy calibration. Improving on methodological flaw of previous studies, the present study censors zero expenditures in the first stage using simulation based maximum likelihood multivariate probit. In the second stage, Quadratic Almost Ideal Demand System which allows for a more realistic assumption of curvature in Engels curve is estimated. In turn, food expenditure and price elasticities are derived. In view of the high expenditure elasticities, considering a policy option that would enhance rural consumer income is desirable, since it will result in high consumption thereby providing more incentives for food production.

Keywords: Consumer/Household Economics; Demand and Price Analysis; Food Consumption/Nutrition/Food Safety; Research Methods/ Statistical Methods (search for similar items in EconPapers)
Pages: 21
Date: 2014-07
New Economics Papers: this item is included in nep-agr
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea14:174853

DOI: 10.22004/ag.econ.174853

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