Quadratic almost ideal demand system (quaids) estimation for common beans demand in Dar Es Salaam, Tanzania
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Date
2018
Authors
Journal Title
Journal ISSN
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Publisher
Sokoine University of Agriculture
Abstract
Beans production and consumption is common and form an important historical food and
nutrition security in many parts of the world. In Tanzania, the availability of beans ensures
food security because it mitigates or reduces hidden hunger since some families consider it
as a dependable and complete meal during periods of food shortage. Due to its importance,
the inquiry into production and consumption patterns is paramount. This paper contributes
some insights in the consumption side. The overall objective of this study was to analyze
the responsiveness of bean consumers in Dar es Salaam Region to changes in price and
income. Based on monthly food expenditures for five types of common beans grouped as
yellow, red, soya supa, kombati and mottled red, the sample size of 681 respondents were
used. The Quadratic Almost Ideal Demand System model was used to estimate common
bean demand in Dar es Salaam. Also, expenditure, own and cross price elasticities for five
types of common beans under study were computed. The red, yellow, kombati and soya
supa beans were found to be normal goods while mottled red was an inferior good. Own
and cross price elasticities were less than one except for yellow beans with own price
elasticity of about one, which implies that a change in price would lead to less than
proportionate change in the quantity. Therefore, it is recommended that traders and beans
farmers increase price to raise more revenues. Also, since expenditure elasticities are
higher than price elasticities, policies towards the beans subsector should take into
consideration influence of consumers’ income rather than beans prices. This is because
price related policies will be less effective compared to income policies. However, rational
consumers’ changes in preferences as income change must always be considered.
Description
M.Sc. Dissertation
Keywords
Demand system ideal, Beans demand, Food shortage, Dar Es Salaam, Tanzania