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Analysis of household consumption behaviour in Senegal in the face of price variations: an estimation of a Near Ideal Quadratic Demand System (QUAIDS) model
[Analyse du comportement de consommation des ménages au Sénégal face aux variations de prix : une estimation d'un modèle de Système de Demande Quadratique Presque Idéal (QUAIDS)]

Author

Listed:
  • Baye Elimane Gueye

    (UADB - Université Alioune Diop de Bambey)

  • Omar Sene

    (UADB - Université Alioune Diop de Bambey)

Abstract

The implementation of efficient economic policies in a context of rising commodity prices requires a good understanding of household consumption behaviour. The main objective of this paper is to estimate price and income elasticities in Senegal from a QUAIDS (Quadratic Almost Ideal Demand System) demand system, using data from the Harmonised Survey of Household Living Conditions (EHCVM, 2018/2019). The estimated elasticities are re-used to simulate the impact of price increases for sensitive products such as rice, onions, oil, milk powder and electricity on household welfare. The results show that the products selected are superior goods, with the exception of fuel and onions, which are Giffen and normal goods respectively. Price and income elasticities vary according to place of residence, level of education of the head of household and income level. As for the simulations, the results show that higher prices increase the poverty rate. However, state intervention through direct consumption subsidies would reduce poverty levels but would benefit higher-income households more.

Suggested Citation

  • Baye Elimane Gueye & Omar Sene, 2024. "Analysis of household consumption behaviour in Senegal in the face of price variations: an estimation of a Near Ideal Quadratic Demand System (QUAIDS) model [Analyse du comportement de consommation," Post-Print hal-05080560, HAL.
    • Handle: RePEc:hal:journl:hal-05080560
    DOI: 10.5281/zenodo.13377401
    Note: View the original document on HAL open archive server: https://hal.science/hal-05080560v1
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    References listed on IDEAS

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