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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Estimation of Own- and Cross-Price Elasticities Using Unit Values: Econometric Issues and Evidence from Urban Ethiopia
Author:Kedir, Abbi M.
Year:2005
Periodical:Journal of African Economies
Volume:14
Issue:1
Period:March
Pages:1-20
Language:English
Geographic term:Ethiopia
Subjects:pricing
food prices
economic models
Economics and Trade
External link:http://jae.oxfordjournals.org/content/14/1/1.full.pdf
Abstract:In Sub-Saharan Africa, estimation of price elasticities using budget surveys is almost nonexistent. In this study, own and cross-price elasticities have been estimated from spatial variation in prices for six food groups (teff, cereals, pulses, fruits and vegetables, meat and coffee) using A. Deaton's methodology (1987, 1988, 1990 and 1997) and the 1994 Ethiopian Urban Household Survey. Following earlier work, the study relates budget shares and unit values (i.e., the ratio of total household expenditure to quantity purchased) to the logarithms of prices, incomes and other relevant household characteristics. As expected, the food commodity groups have inelastic demand but only one third of the commodity groups have statistically significant own-price elasticities. The study also finds the presence of complementarity and substitution between the commodities, but statistically significant results are obtained only for a very few number of the food items. To test the validity of within-cluster methodology used in earlier work, the estimates from this study have also been compared with estimates obtained using actual/market prices. The results compare well with findings elsewhere. Bibliogr., notes, ref., sum. [Journal abstract]
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