Demand for Food Commodities by Income Groups in Indonesia

Helen H. Jensen, Justo Manrique
July 1996  [96-WP 166]

An analysis of the structure of demand was performed on household data, classified into income groups, for urban Indonesia. A demographically augmented, linearized, almost ideal demand system was used to estimate the structural parameters of the demand equations. The results confirmed that the demand structure and the corresponding elasticities varied for different income groups. Such results have important consequences for food policy formulation and welfare analysis, particularly when income differences lead to markedly different food consumption patterns. Published in Applied Economics 50:491-501, 1998.