DEMAND FOR FOOD COMMODITIES BY INCOME GROUPS IN INDONESIA

An analysis of the structure of demand was performed on household data , classified into income groups for urban Indonesia. A demographically augmented linearized almost ideal demand system was used to estimate the structural parameters of the demand equations. Endogenous switchin g regression techniques yielded unbiased and consistent demand paramet er estimates for the low-income group, which had a large number of zer os for some food groups. Standard seemingly unrelated equation techniq ues were used to estimate the demand parameters for the other income g roups. The results showed demands for the medium to high- and high-inc ome households to be responsive to prices, income and demographic vari ables. Demands for the medium to low-income households were responsive to income and prices only. Demands for low-income households were res ponsive to income and prices of rice and fish only.