Quadratic Almost Ideal Demand System (Quaids) Estimation For Common Beans Demand In Dar Es Salaam, Tanzania

ABSTRACT

Beans production and consumption is common and form an important historical food and nutrition security in many parts of the world. In Tanzania, the availability of beans ensures food security because it mitigates or reduces hidden hunger since some families consider it as a dependable and complete meal during periods of food shortage. Due to its importance, the inquiry into production and consumption patterns is paramount. This paper contributes some insights in the consumption side. The overall objective of this study was to analyze the responsiveness of bean consumers in Dar es Salaam Region to changes in price and income. Based on monthly food expenditures for five types of common beans grouped as yellow, red, soya supa, kombati and mottled red, the sample size of 681 respondents were used. The Quadratic Almost Ideal Demand System model was used to estimate common bean demand in Dar es Salaam. Also, expenditure, own and cross price elasticities for five types of common beans under study were computed. The red, yellow, kombati and soya supa beans were found to be normal goods while mottled red was an inferior good. Own and cross price elasticities were less than one except for yellow beans with own price elasticity of about one, which implies that a change in price would lead to less than proportionate change in the quantity. Therefore, it is recommended that traders and beans farmers increase price to raise more revenues. Also, since expenditure elasticities are higher than price elasticities, policies towards the beans subsector should take into consideration influence of consumers’ income rather than beans prices. This is because price related policies will be less effective compared to income policies. However, rational consumers’ changes in preferences as income change must always be considered.