QUADRATIC ALMOST IDEAL DEMAND SYSTEM OF FOOD CONSUMPTION PATTERN IN SOUTH-EASTERN NIGERIA

Abstract

Engel curves are, in general, non-linear in expenditure with observed hump-shaped relationships for some food items. Thus, allowing for flexible household income responses. This study, therefore, presents households food consumption pattern in south-eastern Nigeria using theory-consistent consumer-demand model. The analysis was done on micro-data from a sample of 790 food-consuming households. The results showed that households in the region observe less diversified diets as they expend a higher proportion of their food expenditure on carbohydrate foods. The results from the Quadratic Almost Ideal Demand System (QUAIDS) model showed that the resulting Engle curves of fish, plantain, fufu, and all food commodities in the fruits and vegetable category are non-linear. Most of the food commodities were normal goods with chicken (2.261) as luxury food commodity, and rice (1.160), yam (1.111), tomato (1.240) and pepper (1.185) on the verge of being luxury food commodities. However, tomato and pepper would change from luxury food commodities to necessary food commodities while fufu can change from necessary to luxury food commodity as income of households reached the point where they can afford a more diverse diet. Households in south-eastern Nigeria need chevon, mutton, plantain, potato, fufu, and orange for their daily consumption with their current level of food expenditure. Nevertheless, the price variables were of less effect on food consumption in the region then the income variables. Thus, policies thrust targeted at improving household income or expanding household disposable income in the region would be effective in improving household food consumption besides price stabilization policies.