An analysis of household demand for major food items in urban, rural and estate sectors of Sri Lanka

Abstract

Introduction

The analysis of food demand has received increased attention world-wide in the last few decades ever since food intake was found to have a strong empirical linkage with human health and labour productivity (Aromolaran, 2004). The estimated price elasticity of demand and income or expenditure elasticities of demand are regarded as important tools for policy design and planning. The study of food consumption patterns is crucial in Sri Lanka, which is categorized as a Food-Deficit country by FAO. In Sri Lanka, consumption expenditure contributed more than 70% of GDP (Economic and Social Statistics, 2018). However, it contributed only 38% of the total expenditure shares of an average household (HH) (Consumer Finances and Socio-Economic Survey, 2003/04). The HHs living in urban, rural and estate areas make expenditure on different commodities to attain their day to day requirements. The overall HH demand for food in Sri Lanka has been well documented. But, there no adequate study exists on HH demand for food based on sectoral wise using Sri Lankan data. Thus, the present study by complementing the existing HH demand for food studies, attempts to bridge the existing gap.