Lithuania's food demand during economic transition

The linear approximate version of the almost ideal demand system (LA-AIDS) model is estimated using data from the Lithuanian household budget survey ( HBS) covering the period from July 1992 to December 1994. Price and real ex penditure elasticities for 12 food groups were estimated based on the estim ated coefficients of the model. Very little or nothing is known about the d emand parameters of Lithuania and other former socialist countries, so the results are of intrinsic interest. Estimated expenditure elasticities were positive and statistically significant for all food groups, while all own-p rice elasticities were negative and statistically significant, except for t hat of eggs which was insignificant. Results suggest that Lithuanian househ old consumption did respond to price and real income changes during their t ransition to a market-oriented economy. (C) 2000 Elsevier Science B.V. All rights reserved.