Demand for food in Myanmar (Burma)

Aggregate quarterly time series data from 1975 to 1987 on government procurement prices and open (black) market prices were used in estimating an almost ideal demand system (AIDS) and double‐log models for consumption of foodstuffs in Myanmar. The results from the AIDS model were superior to those from the double‐log models. The estimated income elasticity of demand for non‐meat foodstuffs was high, even for low‐quality rice, which has been shown to be an inferior good in other Asian countries. The income elasticities for the non‐cereals (groundnut oil, sesame oil, pulses, potato and onion) are positive and less than one. Contrary to expectation, the income elasticities for all meat items are low. Own‐price elasticities for most foodstuffs were less than one. The estimated cross‐price elasticities indicate the complementary nature of the basic food items to rice. A brief analysis of the effects of taxing Myanmarese rice exports and subsidising consumers indicated that there are net costs to government, unevenly distributed welfare gains to consumers and welfare losses to farmers.