The Analysis of Consumer Demand for Food in South Africa: An Application of the Modified Almost Ideal Demand System: Some Preliminary Results
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This paper examines consumer demand for food in South Africa. An Almost Ideal Demand System that incorporates socio-economic and demographic factors is specified and estimated using cross-sectional data of 1993 Integrated Household Survey. By utilising a two-stage budgeting procedure, a complete food demand system was estimated. The results indicate that, for food groups (meat and fish, grains, dairy products, fruits, vegetables and other foods), demand is generally price elastic. Meat and fish, grains and dairy products are luxury products, while fruits, vegetables and other foods are necessities. For food commodities, the results indicate that the demand with respect to own-price is generally elastic. The results suggest that, for an increase in income, food expenditure on meat and fish and grains would increase while that on dairy products, vegetables and other foods would decrease. The implications of the empirical results are discussed.