Household Food Demand in Response to Earthquake: A Linear Approximate Almost Ideal Demand System Approach

Type Working Paper
Title Household Food Demand in Response to Earthquake: A Linear Approximate Almost Ideal Demand System Approach
Author(s)
Publication (Day/Month/Year) 2016
URL http://www.aes.ac.uk/upload_area/member_documents/Eny_Sulistyaningrum_enypaper.pdf
Abstract
Natural disasters are always associated with the disruption of local economies and hurting the local
people. Households usually respond to those difficulties by cutting their consumption especially for
non-necessity goods. Hence this paper discusses the pattern of food demand when the earthquake
occurs. In addition, it also observes the price and expenditure elasticities of food demand by
estimating a Linear Approximate Almost Ideal Demand System (LA-AIDS). This paper also examines
the effect of earthquake on living standards of households. It finds that food demand estimations on
rice and oil have price inelastic demand, while vegetable, meat, and fish are price elastic.
Furthermore, poor households are more likely to have a greater negative impact than rich households
although the effect is quite small.

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