Estimating demand for food commodities by income groups in Indonesia

Helen Jensen and Justo Manrique

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: An analysis of the structure of demand was performed on household data, classified into income groups for urban Indonesia. A demographically augmented Linearized Almost Ideal Demand System was used to estimate the structural parameters of the demand equations. Endogenous switching regressions techniques yielded unbiased and consistent demand parameter estimates for the low income group, which had a large number of zeros for some food groups. Standard seemingly unrelated equation techniques were used to estimate the demand parameters for the other income groups. The results showed demands for the medium-high and high income households to be responsive to prices, income and demographic variables. Demands for the medium-low income households were responsive to income and prices only. Demands for lowincome households were responsive to income and prices of rice and fish only.

Keywords: Endogenous; Switching; Regressions; Income; Groups; Zeros; Indonesia (search for similar items in EconPapers)
Date: 1993-08
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Citations: View citations in EconPapers (2)

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