Demand analysis for onion in the Philippines, 2008

Date

4-2013

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Vista, Arvin

Abstract

Onion may be considered as one of the most essential cooking ingredients in the world. It can be used in a wide variety of recipes. In the Philippines, most dishes are cooked with onions. This study aimed to examine the effects of selected socio-economic factors on the weekly household demand for onion. Also, this study estimated the own price elasticity of demand for onion. Secondary data such as weekly consumption and retail price of onion, price of complementary goods such as garlic, source of onion, region, household size, barangay classification, socio-economic classification, total household income per week and educational attainment of the household head were obtained from the Bureau of Agricultural Statistics (BAS). The study employed weekly household demand data gathered by the BAS in August 2008. Based on the results, Filipino households consume an average of 0.31 kg of onion weekly. On the average, households in urban areas consume 0.32 kg of onions weekly and households in rural areas consume 0.31 kg. Results showed that there are significant differences in the weekly household consumption of onion between barangay classification (urban and rural), socio-economic classification (upper, middle, lower, and extreme lower class) and educational attainment of the household head (no schooling, elementary level, high school level, college level, vocational, and post-graduate). To determine the factors that affect the household demand for onion in the Philippines, multiple regression analysis was employed. Three functional forms were considered –linear, semi-log and double log. Results from the multiple regression showed that semi-log was the most appropriate form. Household size, educational attainment of the household head, barangay classification, and socio-economic classification affect the log value of household demand for onion. Results showed that as household size increases, quantity demanded for onion decreases. Also, based on the results of the study, households in urban areas consume lower quantity of onion than the households in rural areas which might be caused by higher price of onion in urban areas relative to rural. Lastly, results of the regression coefficient showed that the weekly household consumption of onion in the upper class is lower than the weekly consumption of households in other socio-economic classes. This may be attributed to the upper class’s choice of food. Households in upper class have a wider choice of food, some of which does not require onion as an ingredient in the recipes. Own price elasticity showed that the demand for onion is inelastic with respect to its own price. Price of garlic and household income appeared not to be significant hence, cross price and income elasticities of the demand for onion were not obtained in the study. Panel data for the months August and November 2008 and February and May 2009 are available in the BAS. This could be used in verifying the results of the August 2008 demand analysis for onion.

Language

English

Location

UPLB College of Economics and Management

Call Number

Thesis

Document Type

Thesis

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