Die Bodenkultur - Journal for Land Management, Food and Environment
E. Erjavec, G. J. Mergos, L. Mizzi and J. Turk:
Food Demand in Slovenia
This paper attempts to contribute to a better understanding of changes occurring in food demand during the transitional period that the whole Slovene society has been experiencing. The Linear Approximation of Almost Ideal Demand System (LA/AIDS) model was estimated for seven different food groups using Household Budget Survey data for 1988 and 1993, respectively. The computed food expenditure elasticities range between 0.7 and 1.4. The most price elastic food groups were found to be fruits and meats, followed by milk and vegetables. An increase in food elasticities may be interpreted as the result of an increase in price responsiveness of the average food consumer and there are indications of a decline in the welfare of low-income households during transition. These estimates may be used for policy purposes, especially to simulate the implications of adopting the Common Agricultural Policy on Slovene consumers.
Key words: LA/AIDS demand system, expenditure and price elasticities, economy in transition