This study aims to investigate how households have adjusted their demand for various food and non-food items to changes in price and income. The Quadratic Linear Almost Ideal Demand Model (AIDM) was used on the Household Income Consumption Expenditure Survey (HICES) 2004/05 data. The results suggest that Ethiopian households display significant responses to changes in prices and income. In both rural and urban areas the consumption increase of teff, animal products, and non-food items exceeds the proportional income increase, which illustrates the growing importance of these sectors. Price elasticities of demand for cereals are roughly the same in urban and rural areas of the country.
Summary of ESSP II working paper 11
International Food Policy Research Institute (IFPRI)