Food Demand Elasticities, Price Changes and Calorie Availability of Households in the Western Province of Sri Lanka

Abstract

This study aimed to investigate the responsiveness of household demand in Western Province for rice (samba), dhal, bread, chicken, coconut, milk powder and sugar. The research finds demand for these foods with the changes in price and expenditure using the linear approximation of the strict Almost Ideal Demand System (LA/AIDS) estimated using the Seemingly Unrelated Regression Procedure (SURE). The data used were from the household income and expenditure survey, 2006/07. All food items were found to be price inelastic while they had a positive expenditure elasticity which is less than unity except bread. Simulations show that the calorie availability of the household declines with most of the food products and in the light of expected food price increases in the world; this will have a marked impact on food security and nutrition security of households in the Western Province.