New Capital Relocation of Indonesia: Estimating Food Demand in East Kalimantan and Jakarta

Abstract

This research examines the current state of food demand and its influencing factors in East Kalimantan and Jakarta, considering the relocation of Indonesia’s capital city. Using the Quadratic Almost Ideal Demand System (QUAIDS) method and 2021 Susenas data, we have analyzed the impact of variations in food prices, income, and demographic variables on seven food categories—rice, grains, tubers, legumes, animal protein, fruit & vegetables, and prepared food. Our findings reveal that increased income increases demand for animal protein and fruit & vegetables in East Kalimantan but decreases in Jakarta. In both regions, as expenditure increases, rice consumption decreases while the demand for prepared food increases. An increase of 1% in rice prices will reduce rice consumption by approximately 0.334-0.487% in East Kalimantan and 0.126-0.202% in Jakarta. Households in East Kalimantan consume more prepared food when prices for other food items increase. In Jakarta, prepared food consumption decreases as rice prices go up. Demographic factors play a crucial role in determining food demand. For example, public sector employees in East Kalimantan consume more rice and less prepared food, while in Jakarta, they prefer prepared food and consume less rice. It is essential to pay adequate attention to the demand for food for public workers who will move to East Kalimantan and the demographic factors that influence it. This consideration will ensure that the residents of East Kalimantan and those who relocate to the new capital receive the necessary food provisions.