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Consumer Behaviour in a Country in Transition with a Strongly Contracting Economy: The Case of Food Consumption in Bulgaria

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  • K. Balcombe
  • S. Davidova
  • J. A. Morrison

Abstract

This paper presents estimates of demand elasticities in Bulgaria using the Almost Ideal Demand system while using interval priors for the parameters. Expenditure elasticities are found to be considerably higher than unity for food items. These results are interpreted as being due to a substantial divergence between consumption and expenditure on food items. It is concluded that under conditions of falling incomes, policies which focus exclusively on food provision may not be appropriate. In the event of a return to income growth, an initial increase in demand for selected food items could outstrip the potential to increase domestic supply, and lead to an increase in imports, or decrease in exports, of a number of agricultural products.

Suggested Citation

  • K. Balcombe & S. Davidova & J. A. Morrison, 1999. "Consumer Behaviour in a Country in Transition with a Strongly Contracting Economy: The Case of Food Consumption in Bulgaria," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(1), pages 36-47, January.
    • Handle: RePEc:bla:jageco:v:50:y:1999:i:1:p:36-47
    DOI: 10.1111/j.1477-9552.1999.tb00793.x
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    References listed on IDEAS

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    Cited by:

    1. Firici, M. Carmen & Thomson, Kenneth J., 2002. "Distributional Impacts of CAP Adoption on Romanian Households," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24818, European Association of Agricultural Economists.
    2. Goodwin, Barry K. & Phaneuf, Daniel J., 2001. "Microeconometric Modeling Of Household Food Demand: The Case Of Transition Bulgaria," 2001 Annual meeting, August 5-8, Chicago, IL 20713, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Rask, Kolleen J. & Rask, Norman, 2011. "Economic development and food production-consumption balance: A growing global challenge," Food Policy, Elsevier, vol. 36(2), pages 186-196, April.

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