Abstract

This study evaluated regional heterogeneity in food consumption patterns across Indone-sia. The demand system for strategically important food commodities was estimated for five regions: Sumatera, Java-Bali, Kalimantan, Sulawesi, and Nusa Tenggara-Maluku -Papua (Nusmapua). A two-step budgeting procedure based on the Quadratic Almost Ideal Demand System (QUAIDS) framework was used to estimate the unconditional elasticities of each food item in each regional setting, together with household data from the 2018 national socio-economic survey by Statistics Indonesia. The results showed that elasticities differ significantly across the regions, suggesting that regional heterogeneity needs to be considered when estimating demand structure. The estimated elasticities were used to conduct a welfare impact analysis of a simulated price increase, which showed that disregarding regional heterogeneity can overstate or understate welfare loss caused by price increases.& COPY; 2023 Economic Society of Australia, Queensland. Published by Elsevier B.V. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).

Keywords

QUAIDS; Strategic food; Demand elasticity; Regional heterogeneity; Indonesia

Published in

Economic Analysis and Policy
2023, Volume: 79, pages: 435-449

SLU Authors

• Huang, Wei

  • Department of Economics, Swedish University of Agricultural Sciences
    

Sustainable Development Goals

SDG2 End hunger, achieve food security and improved nutrition and promote sustainable agriculture


UKÄ Subject classification

Economics


Publication identifier

DOI: https://doi.org/10.1016/j.eap.2023.06.024

Permanent link to this page (URI)

https://res.slu.se/id/publ/122630