As a typical developing Asian county, the growth in per capita income generally brings to diversification in Malaysians food basket. The most significant observation is the falling in per capita consumption of rice with continuous growth of demand for wheat based products. The objective of this study is to estimate the demand elasticities of rice in Malaysia, focusing whether rice is an inferior good. By using data from Household Expenditure Survey 2004/2005, this study obtains demand elasticities of rice, as well as for other 11 food items via Linear Approximate Almost Ideal Demand System (LA/AIDS) and Quadratic Almost Ideal Demand System (QUAIDS). The empirical results indicate that income elasticity of demand for rice (0.7104) is the highest compared to other food items in the LA/AIDS model, while income elasticity of demand for wheat (0.5087) is higher than rice (0.4712). Both of the income elasticities of demand for rice suggest that rice is not an inferior good in Malaysia. However, by comparing both estimates of demand elasticities and adjusted R2s, the QUAIDS model provides more plausible results than the LA/AIDS model.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
15062.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.: