Iranian Journal of Agricultural Economics and Development Research

Iranian Journal of Agricultural Economics and Development Research

Analyzing food demand in Iran: Application of demand system models

Document Type : Research Paper

Authors
Javad Hosseinzad 1
Fateme Sohrabi Athar 2
Ghader Dashti 1
Mohamad Ghahremen Zade 1
1 Associate Professor, Agricultural Economics, University of Tabriz, Iran
2 MSc., Agricultural Economics, University of Tabriz, Iran
10.22059/ijaedr.2014.53171
Abstract
In this study the consumption behavior of Iranian urban households is analyzed for the eight main food commodities groups including cereal and its products, meat, milk and its products and eggs, fruits and vegetables, edible oils and butter, beverages, grains and nuts over 1974-2007. In this context, the flexible demand models such as Quadratic Expenditure, Rotterdam, Almost Ideal Demand System, Quadratic Almost Ideal Demand System, Inverse Almost Ideal Demand System (IADS) and CBS were estimated by seemingly unrelated regressions. Based on comparing the statistical tests and econometric criteria, the IADS was selected as the best model. Results showed that among the food items, dairly and meat have the least and highest quantity elasticity, respectively. The scale elasticities of meat and nuts were lower than those of other groups, which suggest that these goods are being luxurious. The results imply that there is a substitute relationship between meat and cereal, and also milk and other beverages. Furthermore, cereal has a complementary relationship with nut and oil.
Keywords
Demand systems
inverse almost ideal demand system
main food commodities groups
quantity elasticity
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Iranian Journal of Agricultural Economics and Development Research
Volume 45, Issue 3 - Serial Number 3
Autumn 2014
Pages 545-554