Analysis of Bread Consumption Preferences by Urban Households, Using Demand System Approach

Document Type : Original Research

Authors
A. Fatahi Ardakani 1
M. Rezvani 2
Y. Bostan 3
F. Sakhi 2
1 Department of Agricultural Economics, Ardakan University, Ardakan, Islamic Republic of Iran.
2 Department of Agricultural Economics, Faculty of Agricultural and Natural Resources, University of Tehran, Islamic Republic of Iran.
3 Department of Agricultural Economics, Faculty of Agricultural Engineering, Sari Agricultural Sciences and Natural Resources University, Mazandaran, Islamic Republic of Iran.
10.22034/jast.25.5.1015
Abstract
Bread is a basic and essential good that has a special importance in the consumer basket of households and constitutes the main food of many people in the world. The main objective of this study was to investigate the consumption behavior of household bread basket using demand systems during 1998-2018. Therefore, estimates of various demand systems including generalized ordinary demand, Almost Ideal Differential Demand, Rotterdam, Central Bureau of Statistics (CBS) and National Bureau of Research (NBR) were used to select the appropriate demand system to calculate the price and income elasticities of bread demand. Based on statistical tests and econometric criteria, the results showed that the generalized ordinary demand system was the most appropriate model for estimating the consumption demand of the bread basket in urban households. The income elasticities of all types of bread were positive, and, for urban consumers, Barbari and industrial bread were essential and Lavash, Sangak, and Taftoon were luxury types. Also, according to the negative expectations and cross elasticities of Sangak with Barbari, self-price elasticities of different types of bread were positive, meaning that Sangak was replaced by Barbari. In addition, the variable effect of subsidy targeting was positive for Taftoon and Lavash breads, negative for Barbari, and meaningless for Sangak. According to the study results, it is suggested that government officials pay special attention to the importance of bread consumption basket and preferences of its consumers in economic policies regarding food and household consumption basket (such as targeted subsidies).

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Journal of Agricultural Science and Technology
Volume 25, Issue 5
September and October 2023
Pages 1015-1031