Farming households’ food demand in South West Nigeria: An application of Substitution Elasticity Demand System (SEDS)

Abstract

Food constitutes a key component of a number of fundamental welfare dimensions, such as food security, nutrition and health. It makes up the largest share of total household expenditure in low-income countries, accounting on average for about 50% of the households’ budgets. Most demand analysis use existing models, but this study applied a new model – SEDS to analyse food demand among farming households in South West Nigeria. A multi-stage sampling technique was employed study to select 342 respondents. Primary data was collected through the use of a structured questionnaire. Data collected include information on a number of different food groups consumed by households, socioeconomic characteristics, demographic factors and income. The analytical techniques used were descriptive analysis and the Substitution Elasticity Demand System (SEDS). The result of SEDS shows that own price elasticities were less than 1 except for root and tuber, and fats and oil. It was found that cereals, legumes, fruit and vegetables and animal protein were price inelastic, i.e. necessities, and roots and tubers and fats and oils were price elastic, i.e. luxury goods.