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City size and household food consumption. An application of the AIDS model to food demand elasticities in Spain

Author

Listed:
  • Elena Lasarte Navamuel

    (REGIOlab - University of Oviedo - Oviedo, Spain.)

  • Fernando Rubiera Morollón

    (REGIOlab - University of Oviedo - Oviedo, Spain.)

  • Dusan Paredes Araya

    (IDEAR - Department of Economics, Universidad Católica del Norte - Chile)

Abstract

Empirical evidence on consumer behavior is of major importance in the formulation and analysis of economic policies. Changes in prices, income level, or decisions regarding taxes or other structural reforms that effect relative prices may produce very different effects depending on family income distribution or also across space. The aim of this paper is to estimate expenditure and own-price elasticities for ten aggregated food product groups using the Spanish Household Budget Survey for the year 2010. These products are the ones for which the survey provides information regarding prices and quantities, thus allowing the application of the Almost Ideal Demand System model (AIDS). This stimation procedure allows comparisons to be made not only among different levels of income, but also how relevant could be the place of residence characteristics. The results confirm that the size of the city in which the household resides has a similar significant and relevant effect on consumption patterns as family income level. This is especially clear with own-price elasticities. In Spain, large cities show a greater response to price changes tan small cities or rural areas.

Suggested Citation

  • Elena Lasarte Navamuel & Fernando Rubiera Morollón & Dusan Paredes Araya, 2013. "City size and household food consumption. An application of the AIDS model to food demand elasticities in Spain," Documentos de Trabajo en Economia y Ciencia Regional 34, Universidad Catolica del Norte, Chile, Department of Economics, revised Jan 2013.
    • Handle: RePEc:cat:dtecon:dt201303
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    File URL: https://sites.google.com/a/ucn.cl/wpeconomia/archivos/WP2013-03.pdf
    File Function: First version, 2013
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    Cited by:

    1. Honda, Arisa & Nakajima, Shinsaku & Ohura, Yuji & Kikushima, Ryosuke & Kono, Yoshinobu, 2015. "Household Salads Consumption in Japan: An Application of the two-step Demand System," 2015 Conference, August 9-14, 2015, Milan, Italy 211739, International Association of Agricultural Economists.

    More about this item

    Keywords

    Almost Ideal Demand Systems (AIDS); food elasticities; Spain and municipality size.;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R22 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Other Demand

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