Households Demand for Selected Food Commodities in Uva Province of Sri Lanka
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Date
2020
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Uva Wellassa University of Sri Lanka
Abstract
The pattern of food consumption in Sri Lanka has been undergoing dramatic changes over
the last decades. The changes in food prices and income have a greater effect on the food
consumption pattern of households, especially among the poorer households. This study
investigates the effects of food price and income variation on households’ food
consumption patterns in the Uva province using Household Income and Expenditure
Survey 2016 conducted by the Department of Census and Statistics. The study estimated
the demand for selected food items namely rice (white kekulu – normal), bread, dhal,
chicken, coconut, milk powder, and sugar applying the Linear Approximation of the strict
Almost Ideal Demand System model using the Seemingly Unrelated Regression
procedure. Descriptive analysis show households in Uva province spend mainly on
cereals and vegetables while the lowest amount spends on sugar, meat, and pulses
compared to other provinces. Especially, liquor consumption is remarkably high in Uva
province. The result shows that all food items are normal goods because all items have
positive expenditure elasticity. Expenditure elasticity for rice, milk powder, and coconuts
are greater than one implies these food items are luxury goods. The own-price elasticities
are negative for all food items and less than one in absolute value, indicating price
inelastic demand in these goods. Besides, almost all cross-price elasticities show negative
values imply that they are complementary goods. This study concludes that households in
Uva province are highly sensitive for price changes of some necessary foods including
rice. Finally, this analysis suggests formulating targeted food policies to increase local
production of luxury food items such as milk and rice to assist the poor families in the
Uva province.
Keywords: Almost ideal demand system, Elasticity, Food consumption pattern,
Household, Uva province
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Keywords
Agriculture, Food Science, Food Technology