Using Income Classes to Estimate Consumption Parameters for Food Policy Analysis

Jacinto F. Fabiosa, Samarendu Mohanty, Darnell B. Smith, William H. Meyers
June 1996  [96-WP 159]

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Fabiosa, J.F., S. Mohanty, D.B. Smith, and W.H. Meyers. 1996. "Using Income Classes to Estimate Consumption Parameters for Food Policy Analysis." Working paper 96-WP 159. Center for Agricultural and Rural Development, Iowa State University.


Abstract

How can economists estimate consumption parameters by income classes? The approach used in this paper combines price elasticities estimated from aggregated market data and income-class-specific elasticities derived from household expenditure surveys using Slutsky relationships to calculate income-class-specific price elasticities. The approach was applied to estimate income-class-specific price elasticities for major agricultural commodities consumed in Jamaica.