Economic analysis of rice consumption per capital in the Philippines

Date

2012

Degree

Bachelor of Science in Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Tirso B. Paris, Jr.

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Abstract

The main motivation of the study was to examine the trend in per capita consumption of rice as rapid economic growth usually leads to significant structural changes in food demand. The study sought to find plausible explanation for the Filipinos‘ rising rice consumption level despite the rising price of rice and other food items. Specifically, it aimed to analyze factors affecting consumption of rice. The study made use of Double Log Regression Model in the demand estimation. The analysis made use of data on prices of rice and related food items (i.e. corn, camote, pork, beef, chicken, and fish). Poverty incidence was also included in the analysis to capture the effect of poverty in relation to rice consumption. Results of the study showed that data on annual per capita consumption of rice show increasing trend during the last 20 years. However, annual growth rates of per capita consumption of rice showed no growth. Income was concluded to have positive effect on consumption of rice, implying that changes in income causes consumption of rice to move in the same direction. Estimated income elasticity showed that rice is a normal good. Prices of related goods, specifically those of corn, pork, beef, chicken, and fish reflected a negative effect on per capita consumption of rice. This implies that consumption of rice tend to decrease as prices of aforementioned goods increases. The same thing holds true for the poverty incidence -- consumption of rice tend to decrease as poverty incidence rises. Computed cross price elasticity, on the other hand, indicated that fish, beef, and chicken are complementary goods to rice. The price of fish in particular showed to be a significant factor in explaining per capita consumption of rice.

Language

English

Location

UPLB College of Economics and Management (CEM)

Document Type

Thesis

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