An Analysis of Food Consumption Expenditures of Rural Households: A Case Study of Three Regions in Sri Lanka

Abstract

Disaggregated analysis of food consumption expenditures of the poorer sectors of an economy is a useful task and yet one that is not frequently undertaken in LDCs. It is useful due to its many potential contributions 'inter alia' to the development of cost of living indices, standards of living indicators, 'poverty lines' and scales of income distribution crucial to effective policy-making. In this study, a disaggregated analysis of data from mainly subsistence agricultural households, in three selected rural regions of Sri Lanka, was conducted using descriptive and quantitative methods. Quantitative methods include regression analysis using single and systems of equation demand models. The results indicate that the three regions are largely similar in terms of socio-demographic characteristics that are likely to influence food consumption, leading to similar patterns of food consumption expenditure. The expenditure pattern for most items of food, is determined significantly by the level of total expenditure only. The variation in food consumption expenditures across the two seasons, corresponding to pre- and post-harvest periods of 1984, was found to be statistically significant. The total expenditure elasticities for the pre-harvest season were higher for most food categories than those for the post-harvest season. Food plays a patently predominating role in the budget of all income classes. Almost all items of food. including staples, involve increasing expenditures with rising incomes, suggesting that the scope for subsidising any particular type of food, as a means to benefit only the poorer segments of the population, is limited.