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An error corrected almost ideal demand system for major cereals in Kenya

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  • Jonathan M. Nzuma
  • Rakhal Sarker
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    Abstract

    Despite significant progress in theory and empirical methods, the analysis of food consumption patterns in developing countries, particularly those in Sub-Saharan Africa (SSA), has received very limited attention. An attempt is made in this article to estimate an Error Corrected Almost Ideal Demand System for four major cereals consumed in Kenya employing annual data from 1963 to 2005. This demand system performs well on both theoretical and empirical grounds. The symmetry and homogeneity conditions are supported by the data and the "Le Chatelier" principle holds. Empirically, all own-price elasticities are negative and significant at 5% level and irrespective of the time horizon, maize, wheat, rice, and sorghum may be considered as necessities in Kenya. While the expenditure elasticities of all four cereals are positive, they are inelastic both in the short run and in the long run. Finally, wheat and rice complement maize consumption in Kenya while sorghum acts as a substitute. Since cereal consumers have price and income inelastic responses, a combination of income and price-oriented policies could improve cereal consumption in Kenya. Copyright (c) 2010 International Association of Agricultural Economists.

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    Bibliographic Info

    Article provided by International Association of Agricultural Economists in its journal Agricultural Economics.

    Volume (Year): 41 (2010)
    Issue (Month): 1 (01)
    Pages: 43-50

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    Handle: RePEc:bla:agecon:v:41:y:2010:i:1:p:43-50

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    Cited by:
    1. Ole Boysen, 2012. "A Food Demand System Estimation for Uganda," The Institute for International Integration Studies Discussion Paper Series iiisdp396, IIIS.
    2. Arnade, Carlos A. & Kuchler, Fred & Calvin, Linda, 2011. "Food Safety and Spinach Demand: A Generalized Error Correction Model," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 40(2), August.
    3. Mason, Nicole M. & Jayne, Thomas S. & Shiferaw, Bekele A., 2012. "Wheat Consumption in Sub-Saharan Africa: Trends, Drivers, and Policy Implications," Food Security International Development Working Papers 146936, Michigan State University, Department of Agricultural, Food, and Resource Economics.

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