Lithuania's Food Demand During Economic Transition

Ferdaus Hossain, Helen H. Jensen
January 2000  [00-WP 236]

In this study, the linear approximate version of the Almost Ideal Demand System (AIDS) model is estimated using data from the Lithuanian household budget survey covering the period from July 1992 to December 1994. Based on the estimated coefficients of the model, Hossain and Jensen estimated price and real expenditure elasticities for 12 food groups. Estimated expenditure elasticities were positive and statistically significant for all food groups while all own-price elasticities were negative and statistically significant, except for that of eggs which was insignificant. Results suggest that Lithuanian household consumption responded to price and real income changes during the transition to a market-oriented economy.

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