Investigating the Consumption Behavior of Strategic Commodities in Agriculture Sector Including Demographic Variables Using GME Approach

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Ahmadi Javid Mehri; Khalilian Sadegh; Mousavi Seyed Habiballah; Najafi Alamdarloo Hamed

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Journal Paper

Paper Information

Journal: JOURNAL OF AGRICULTURAL ECONOMICS AND DEVELOPMENT Year:2023 | Volume:31 | Issue:121 Page(s): 135-162

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Information Journal Paper

Title

Investigating the Consumption Behavior of Strategic Commodities in Agriculture Sector Including Demographic Variables Using GME Approach

Author(s)

Ahmadi Javid Mehri | Khalilian Sadegh | Mousavi Seyed Habiballah | Najafi Alamdarloo Hamed | Issue Writer Certificate

Keywords

strategic commodities demand

Household Demographic

variables

Generalized Maximum Entropy (GME)

Abstract

The price fluctuations and reduction of production in the agricultural sector tend to double the possibility of jeopardizing food security and community health and public dissatisfaction; therefore, regulating the market of these products is one of the most important concerns of policymakers in the agricultural sector, which will be possible when the policymaker understands well the factors affecting the demand and price sensitivity of households. In this study, in order to estimate the demand, while taking into account the demographic variables, an Almost Ideal Demand System (AIDS) with the translog nonlinear price index and the Generalized Maximum Entropy (GME) approach was used. The results showed that with the increase in the size of a household, the consumption of rice and cereals, eggs, oil and milk by the household would increase. Also, non-compensatory elasticity showed that all the communities examined in the current research, due to their strategic nature, were of low-elasticity and, of course, they were essential communities; the lowest elasticity was related to the rice and cereal group and the highest elasticity was related to the red meat group. Considering the necessity of the examined group of communities, having a long-term vision for supplying communities such as rice, grains and types of meat, which are considered as the most important sources of calories and protein, should be on the policymakers' agenda, so that the producers are protected against sudden fluctuations in the market.

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