Estimation and Analysis of Food Demand Patterns in Vietnam

The paper analyzes food consumption patterns of Vietnamese households, using a complete demand system and socio-demographic information. Demand elasticities are estimated applying a modified Almost Ideal Demand System (AIDS) model on the Vietnamese household survey data in 2006. The results indicate that food consumption patterns in Vietnam are affected by income, price, as well as socio-economic and geographic factors. All food has positive expenditure elasticities and negative own-price elasticities. Rice has mean expenditure elasticity of 0.36 and mean own-price elasticity of −0.80. Using the estimated elasticities, the study finds that when rice prices increase by 20 percent, average household welfare rises by 1.3 percent, yet it is important to note that the benefits and costs are not spread evenly across the population. Overall, middle-income households gain the most, while the poorest households gain the least from higher rice prices. This indicates that support programs should target the poorest quintile, especially the poor in the regions hit hardest by higher prices. More generally, our study points out that targeted food policies should be formulated based on specific food demand patterns in the groups.