Title: Egypt household expenditure pattern Does it alternative a food crisis
Abstract: We estimated a system of Engel functions for two survey periods, 1999/2000 and
2004/2005, to quantify the impact of changes of income on household expenditure
behavior and to investigate how expenditure responsiveness changes with income.
We found that rural households have a higher expenditure share for food categories
but a lower share for non-food categories compared to urban households. The
expenditure share did not change so much between the two survey periods, with only a
slight decline in the share of cereals-bread and the non-food category and an increase in
the meat-fish-dairy category.
All estimates have a good fit, and the total expenditure explanatory variable is
significant in all equations. In general, households with lower incomes are more
responsive to changes in income for food categories, and less responsive for non-food
categories. This is evident with the higher income elasticity of lower-income rural
households compared to urban households for food categories. Moreover, elasticities in
the 2004/2005 survey period are higher compared to the 1999/2000 period. Per capita real
income declined by 37.2% in 2004/2005. This consumption expenditure pattern has an
alleviating effect on the impact of a food crisis since a lower real income associated with
a food crisis is accompanied by greater responsiveness of households to reduce their
demand for food as their real incomes shrink. This adjustment behavior is most obvious
in the case of bread and cereals in rural areas, in which the expenditure elasticity
increased from 0.50 to 0.91 as per capita income declined.
Publication Year: 2008
Publication Date: 2008-06-01
Language: en
Type: preprint
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