RESEARCH PAPER
FOOD DEMAND: EVIDENCE FROM INTERNATIONAL COMPARISON PROGRAM 2011 DATA
 
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Wyższa Szkoła Finansów i Prawa Bielsko-Biała, Wiedeński Instytut Międzynarodowych Porównań Gospodarczych, Wiedeń
Acceptance date: 2017-12-07
Publication date: 2017-12-11
 
Zagadnienia Ekonomiki Rolnej / Problems of Agricultural Economics 2017;353(4):154–168
 
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ABSTRACT
Data for 41 European and OECD countries from the International Comparison Program for 2011 are used to estimate the AIDS demand system distinguishing two aggregates: food and all other goods and services (‘non -food’) included in individual consumption expenditure of households. The demand elasticities derived indicate that food is a ‘normal good’ in countries with p.c. volume of total individual consumption not exceeding ca. 17 thousand international dollars. In countries with higher levels of total consumption volumes food appears to be an ‘inferior’ good. Own-price elasticity of food demand is higher than -1.0: food demand is ‘inelastic’. Additionally, estimates are presented of the elasticises of the relative price (food over ‘non -food’) with respect to the volumes of supplies of food and ‘non-food’. These estimates indicate that in richer countries rising supplies of ‘non-food’ depresses the relative price of food. This is consistent with the ‘price-scissors’ tendency acting against the food and agriculture sector.