ISSN: 0041-3216 (Online), 0041-3216 (Print)
Volume 94 Number 3
An analysis of household demand for selected food items in Abeokuta metropolis, Ogun State, Nigeria
The study examined household demand for selected food items in Abeokuta metropolis. The study was based on primary data obtained in a cross-sectional survey of 120 households using multi-stage sampling technique. A structured questionnaire was used to collect data on prices, quantities and household expenditure on various food items consumed by the respondent households over a 4-week period. Data on the relevant variables of the households were also obtained. The study specifically focused on six food items: rice, garri, yam flour, beef, cowpea and palm oil, the items for which standard weights and measures could be established. The data were analysed using descriptive techniques and Linear Approximate of an Almost Ideal Demand System. The mean household income was N 34,101.63 per month, out of which 40% of income (N 13, 892.90) was expended on the six food commodities. Demand for the six food commodities was significantly (p<0.05) influenced by food prices. All the food items were found to be normal goods, with expenditure elasticity of demand estimated to be 1.14 for rice, 0.84 for cowpea and 1.27, 0.71, 1.05 and 0.76 for garri, yam flour, beef and palm oil respectively. Demand for rice, garri and cowpea were found to be price elastic, while demand for yam flour, beef and palm oil were price inelastic. The study concluded that the demand for the selected food items is generally enhanced by increase in income and lower food prices. The study therefore recommended that demand food problems may be addressed through income policies that would enhance increase in purchasing power of consumers in the study area. Also, government should boost the production of price inelastic food items to a level where producers would not be forced to increase prices to the detriment of consumers. Similarly, government should assist producers increase supply price elastic food items such that reduced prices would benefit both the consumers and the producers in the study area.
Keywords: Household demand in Abeokuta, food, expenditure price, budget shares, elasticity, LA-AIDS models