Food Demand System in Transition Economies: Evidence from Kosovo

• Main Authors: Braha, Kushtrim, Cupak, Andrej, Qineti, Artan, Pokrivcak, Jan
• Format: Conference Proceeding
• Language: English
• Published: 26.04.2018
• Edition: 2038
• Subjects: Demand and Price Analysis; Elasticity; Food demand; Kosovo; QUAIDS
• DOI: 10.22004/ag.econ.272050

Study performs food demand analysis in the case of Kosovo. Paper models food consumption behaviour using the HBS data for the period 2005-2012. Along with assessment of the non-parametric Engel curves, here we estimate complete demand system by using Quadratic Almost Ideal Demand System (QUAIDS). Elasticity estimates for five food bundles were amplified with demographic and expenditure controlling variables. Main results reveal that cereals and dairy products are perceived as inferior goods, while the meat, fruits and vegetables are regarded as normal goods. Consistency with the demand theory is affirmed when estimating price and expenditure elasticities. Exception is noticed in the case of cereals, depicting significantly higher own-price elasticity as well as negative expenditure elasticity. Such price sensitivity signals that Kosovo is undergoing transition of the food pattern from the traditional cereal-based diet towards the consumption of the high-value food such as meat and fish. Rising disposable income is found to play prominent role in fostering nutrition transition of the food pattern in Kosovo.