ANALYSIS OF FOOD DEMAND IN INDONESIA

Abstract

This paper is at analyzing food demand system in Indonesia using the 1990's National Socio-Economic Survey (SUSENAS) data. Using an Almost Ideal Demand System (AIDS), the food demand parameter sand elasticities were estimated both in aggregated and disaggregated levels, that is an urban-rural and house hold's income disaggregation, respectively. There sults show that during the 1987-1990 period, the share of food expenditure in general has been declining relative to non-food, in cating an increasing welfare of the society. Never the less, the increase in welfare appears to have been joyed by urban citizens than those living in the rural areas. This conclusion is so supported by the fact that the expenditure shares on protein-food (fish, meat, eggs, milk, and legumes) in urban areas are higher than those in the rural area. The analysis found that : (1) The price demand elasticity for a number of food groups, including cereals and tuber, tend to decline as income increasing, (2) The income elasticity of demand for cereals is low eras income levels get higher, and the opposite is true for the protein-sources of food. There are difficulties of this analysis is there for confirm that increasing income of the society will go along with the promotion of food diversification in consumption