International Journal of Pure & Applied Bioscience (IJPAB)
Year : 2017, Volume : 5, Issue : 1
First page : (236) Last page : (245)
Article doi: http://dx.doi.org/10.18782/2320-7051.2438

Derivation of Demand and Price Elasticities for Food and Non Food Consumption in Tamil Nadu

M. Uma Gowri* and T.R. Shanmugam
Department of Agricultural Economics, Centre for Agricultural and Rural Development Studies,
Tamil Nadu Agricultural University, Coimbatore - 641 003, India
*Corresponding Author E-mail: umanomics@gmail.com
Received: 10.01.2017  |  Revised: 18.01.2017   |  Accepted: 21.01.2017  

ABSTRACT

Food is a basic need for human life which carries enormous social, cultural, political, symbolic and nutritional significance of all societies. Rapid economic and income growth, urbanization and globalization along with technological developments lead to a dramatic shift of diets away from staples and increasingly towards livestock and dairy products, vegetable and fruit and fat and oil. The specific objectives of the study were to analyze the demand and price elasticities of food and non-food consumption pattern and to study the consumption pattern/expenditure share of the households besides conventional analysis, advanced econometric model of Almost Ideal Demand System, which formed the basis to derive the own price and expenditure elasticities was used to analyze the data. The % of food expenditure for rural worked out to 51.06, 48.93 and 48.13 % respectively, among LIG, MIG and HIGs, and it was 50.27, 48.28 and 47.62 % respectively for urban LIG, MIG and HIGs. The % of non-food expenditure was 48.94, 51.07 and 51.87 in rural and 49.73, 51.72 and 52.38 % in urban areas for LIG, MIG and HIGs, respectively. Own price elasticities for most of the food commodity indicated that any increase in the prices of food commodity had a strong income effect and reduced the intake of the food items for LIG. The expenditure elasticity for rice and other cereals followed the Engel's law of household consumption for MIG and HIG in both the sectors. The income elasticity of vegetables for LIG in both sectors was inelastic.

Key words: Expenditure Share, Elasticity, Income, Price, Consumption Pattern

Full Text : PDF; Journal doi : http://dx.doi.org/10.18782

Cite this article: Gowri, M.U. and Shanmugam, T.R., Derivation of Demand and Price Elasticities for Food and Non Food Consumption in Tamil Nadu, Int. J. Pure App. Biosci.5(1): 236-245 (2017). doi: http://dx.doi.org/10.18782/2320-7051.2438