A QUANTITATIVE ANALYSIS OF SHORTRUN HOUSEHOLD FOOD EXPENDITURE BEHAVIOUR IN WESTERN NIGERIA
Keywords:Expenditure, Short-run, Household and Ordinary Least Square.
The importance of household food expenditure studies lies, among other things, in the fact that they help planners in understanding the direction of future development policy on agriculture and related industries. On the basis of this practical usefulness, this study aimed at (i) determining whether income or total expenditure is the more relevant measure of household purchasing power in the Nigerian context, (ii) examining the allocative decisions of households with regard to their expenditures on processed and unprocessed foods, and (iii) measuring the impact of household size and composition on food expenditures.
To provide a theoretical basis for the analysis a review of the underlying economic theory was undertaken. This review was historical in perspective and was patterned along the three stages of the development of the theory. The three stages can be characterized as (i) the cardinal utility theory, which is associated with Gossen (1854), Jevons (1871) and Walras (1874), (ii) the ordinal utility theory representing the contributions of Pareto (1906), Hicks and Allen (1934) and (iii) the intermediate theory which included the works of Edgeworth (1881), Antonelli (1886) and Fisher (1892).
The data for the study were collected in 1976 in seven rural towns of the old Western State of Nigeria. A two-stage stratified sampling procedure was used in selecting the towns and the thirty households that were interviewed from each of the towns.
The coefficients of the model wee estimated using ordinary least squares method. The results of the multiple regression showed the (i) total expenditure is a better measure of household purchasing power than total income, (ii) households spent more of an increase in their budgets on unprocessed foods than they did on processed foods, and (iii) household size is one of the important determinants of food consumption among the household sample.