An error corrected almost ideal demand system for major cereals in Kenya
View/ Open
Date
2010Author
Nzuma, Jonathan Makau
Sarker, Rakhal
Type
ArticleLanguage
enMetadata
Show full item recordAbstract
Despite significant progress in theory and empirical methods, the analysis of food consumption patterns in developing countries, particularly
those in Sub-Saharan Africa (SSA), has received very limited attention. An attempt is made in this article to estimate an Error Corrected Almost
Ideal Demand System for four major cereals consumed in Kenya employing annual data from 1963 to 2005. This demand system performs well on
both theoretical and empirical grounds. The symmetry and homogeneity conditions are supported by the data and the Le Chatelier principle holds.
Empirically, all own-price elasticities are negative and significant at 5% level and irrespective of the time horizon, maize, wheat, rice, and sorghum
may be considered as necessities in Kenya. While the expenditure elasticities of all four cereals are positive, they are inelastic both in the short run
and in the long run. Finally, wheat and rice complement maize consumption in Kenya while sorghum acts as a substitute. Since cereal consumers
have price and income inelastic responses, a combination of income and price-oriented policies could improve cereal consumption in Kenya.
Citation
Agricultural Economics 41 (2010) 43–50Publisher
Department of Agricultural Economics, University of Nairobi, Kenya
Description
Journal article