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Structural Shift in Demand for Food - Projections for 2020

  • Surabhi Mittal

    (Indian Council for Research on International Economic Relations)

Knowledge of demand structure and consumer behaviour is essential for a wide range of development policy questions like improvement in nutritional status, food subsidy, sectoral and macroeconomic policy analysis, etc. An analysis of food consumption patterns and how they are likely to shift with changes in income and relative price is required to assess the food security-related policy issues in the agricultural sector. With high growth rates in the agricultural sector, the average per capita income in the country shows an increase, accompanied by a fall in the per capita consumption of staple food. In this background the present study diagnoses the food basket of households in rural and urban areas under different expenditure groups in the last two decades and tries to investigate the driving force for these changes by computing the demand elasticities that explain the level of demand for the commodities by an individual consumer given the structure of relative prices faced, real income and a set of individual characteristics such as age, type of household (expenditure groups) and geographical environment (rural or urban). The study projects the prospects of the food demand scenario in the country in 2020. And, finally, aims at finding answers to some of the most debatable issues relating to the countrys food security, decline in cereal consumption and implications on poverty. The study uses data from the consumer expenditure survey of the National Sample Survey (NSS) rounds number 38, 43, 50 and 55.

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Paper provided by East Asian Bureau of Economic Research in its series Macroeconomics Working Papers with number 22223.

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Date of creation: Jan 2006
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Handle: RePEc:eab:macroe:22223
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  1. Huang, Jikun & Bouis, Howarth E., 1996. "Structural changes in the demand for food in Asia," 2020 vision briefs 41, International Food Policy Research Institute (IFPRI).
  2. R. Radhakrishna & C. Ravi, 1992. "Effects of Growth, Relative Price and Preferences on Food and Nutrition," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 27, pages 303-323.
  3. Shenggen Fan & Peter Hazell & Sukhadeo Thorat, 2000. "Government Spending, Growth and Poverty in Rural India," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 1038-1051.
  4. Deaton, Angus, 1990. "Price elasticities from survey data : Extensions and Indonesian results," Journal of Econometrics, Elsevier, vol. 44(3), pages 281-309, June.
  5. J. V. Meenakshi & Ranjan Ray, 1999. "Regional differences in India's food expenditure pattern: a complete demand systems approach," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(1), pages 47-74.
  6. Blundell, Richard & Pashardes, Panos & Weber, Guglielmo, 1993. "What Do We Learn About Consumer Demand Patterns from Micro Data?," American Economic Review, American Economic Association, vol. 83(3), pages 570-97, June.
  7. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
  8. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1975. "Transcendental Logarithmic Utility Functions," American Economic Review, American Economic Association, vol. 65(3), pages 367-83, June.
  9. Evenson, Robert E. & Pray, Carl E. & Rosegrant, Mark W., 1999. "Agricultural research and productivity growth in India:," Research reports 109, International Food Policy Research Institute (IFPRI).
  10. Trueblood, Michael A. & Shapouri, Shahla, 2001. "Implications of Trade Liberalization on Food Security of Low-income Countries," Agricultural Information Bulletins 33705, United States Department of Agriculture, Economic Research Service.
  11. Barten, A. P., 1969. "Maximum likelihood estimation of a complete system of demand equations," European Economic Review, Elsevier, vol. 1(1), pages 7-73.
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