Two Essays on the Economics of Global Food Demand

This study provides an understanding of global consumption patterns across major spending and food categories using data from the 2017 International Comparison Program (ICP). The first chapter examines the demand for food and non-food items across 162 countries using the Quadratic Almost Ideal Demand System (QUAIDS) to estimate demand for nine spending categories: food, clothing, furnishings, transport, housing, health, recreation, education, and miscellaneous. We calculated expenditure, own-price, cross-price elasticities, and marginal shares across these spending categories and performed a welfare analysis to determine the compensation required to maintain the same utility following inflationary periods. The findings indicate that food is the least responsive to changes in income, with an expenditure elasticity of 0.58, while education is the least responsive to price change, with an own-price elasticity of -0.991. The second chapter uses the Almost Ideal Demand Model (AIDS) to derive expenditure, own-price, cross-price elasticities, and marginal shares across eight food products, including bread, meat, fish, dairy, oils, fruits & vegetables, beverages, and other food. Expenditure and price elasticities vary across food categories, where bread is the least responsive to income and price change, with an expenditure elasticity of 0.760 and own-price elasticity of -1.784. Our results show that the allocation of additional income varied across products and countries.