Income and price elasticities of food items across the globe

Anda Nugroho, Marc Mariano, George Verikios and Kenneth Clements
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Anda Nugroho: Commonwealth Scientific and Industrial Research Organisation
Marc Mariano: Commonwealth Scientific and Industrial Research Organisation
George Verikios: Commonwealth Scientific and Industrial Research Organisation and Department of Accounting, Finance and Economics, Griffith University
Kenneth Clements: Department of Economics, University of Western Australia, http://www.web.uwa.edu.au/person/kenneth.clements

No 26-01, Economics Discussion / Working Papers from The University of Western Australia, Department of Economics

Abstract: Widely used global food demand elasticities often derive from outdated sources and insufficiently examined theoretical assumptions. This paper addresses both concerns by estimating a Rotterdam-style demand system for eleven food categories using pooled 2017–2021 International Comparison Program data covering 173 countries. We test structural stability across rounds, validate pooling, and conduct bootstrap likelihood-ratio tests of homogeneity, symmetry, preference independence, and no-price effects restrictions. Results reveal staples and vegetables are necessities while meat and alcohol are luxuries, with income sensitivity declining at higher incomes. Price sensitivity is substantially higher in low-income countries, highlighting their disproportionate vulnerability to food price hikes. Cross-price elasticities indicate dominant substitution relationships, especially among animal proteins. The resulting elasticity set can serve as an updated, empirically grounded input for global food policy modelling

Keywords: food demand; income and price elasticities; 11 food subcategories; cross-country demand econometrics; International Comparison Program (search for similar items in EconPapers)
JEL-codes: D12 F61 Q11 Q18 (search for similar items in EconPapers)
Pages: 55
Date: 2026
Note: MD5 = bede21f121dfb3dfec256995c54dacbc
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