Estimation of Fruit and Vegetable Demand Elasticity in Bangladesh: The Quaids Model for the City of Dhaka South and Rural Areas of Sylhet Division

Abstract

ABSTRACT:The present study seeks to examine consumer demand for fruit and vegetables and potential economic responses to changes in income and price in urban and rural Bangladesh. Despite efforts by the Government of Bangladesh to promote fruit and vegetables to reduce the incidence of noncommunicable disease, per-capita daily intake has remained as low as 211 grams compared to the minimum requirement of 400 grams. Although the existing literature indicates some regional and gender-based variation in vegetable intake, specific knowledge of this variation remains poor. Recognizing the urgency of reducing non-communicable diseases, a primary household expenditure survey was conducted during 2018-19 in selected communities of the City of Dhaka South and rural areas of Sylhet Division. The objective of the study was to determine the demand for fruit and vegetables based on household income and the price elasticity of fruit and vegetables. These estimates were made by using the nonlinear Quadratic Almost Ideal Demand System (QUAIDS) model. The results revealed that expenditure on fruit and vegetables was not significantly different between male and female-headed households, while in urban areas a rise in income led to greater spending on fish, meat, fruit, and milk rather than vegetables. Pure price effect also showed that vegetables were not yet an established substitute for fish and meat. The QUAIDS model was used along with the survey data to estimate the expenditure elasticity and price elasticity of seven food groups (vegetables, fruit, rice, wheat and pulses, fish and meat, spices, milk) according to geographical region. Higher income tended to increase consumption of vegetables and rice more in rural areas (vegetables 1.01 and rice 0.81) than in urban areas (vegetables 0.94 and rice 0.15). Female-headed households did not exhibit significantly different fruit and vegetable consumption compared to male-headed households, though it is possible that greater income-generation opportunities in rural areas might increase the decision-making power of women and lead to an improvement in dietary behavior. Further policy attention should be given to public campaigns and social marketing regarding the health benefits of fruit and vegetables consumption accounting for different socio-economic and cultural norms in the rural urban areas.