Estimating Food Consumption Patterns in Pakistan by Using Ideal Demand System
Abdul Hameed1*, Ihtsham ul Haq Padda2 and Abdul Salam3
The purpose of this paper is to examine the behavior of national and regional food consumption and purchasing power to develop food security policies. This study estimates the demand for food in Pakistan through indirect expenditure and price utility functions, using integrated household economic survey 2015-16 data and the nonlinear quadratic almost ideal demand system. The paper finding shows that demand for most commodity items except for fruit, meat, sugar and other products is less than unit elastic to expenditure elasticity at the country and regional levels. Cross price elasticity assessment demonstrates that the most nutritious food items, such as fruit, milk and meat, are complementary products as compared to wheat, pulse and vegetables in Pakistan as well as urban and rural areas. The regional analysis indicates that the gross and net substitute impacts in urban areas are somewhat more dominant than in rural areas. It implies that urban areas household makes more substitutes relative to rural areas. These findings suggest that policy makers and public organizations should reexamine the connection between consumption, price and income for food and nutrition security and social development. It also proposes that constant price of nutritious food and any rise in prices of these commodities should be supported by price subsidization or safety nets programmes for deprived groups. In addition, the state should concentrate on rural income generation activities such as agriculture, livestock and its related industries.