Metropolis Report –
A rise in food costs or a decrease in income somewhat lowers the consumption of rice but significantly lowers the consumption of fish, meat, fruit, and other nutritious food products – found in a hybrid (online and offline) seminar, arranged by the Bangladesh Institute of Development Studies (BIDS) yesterday. The keynote on “What do we learn about household food demand patterns and elasticities from micro-data in Bangladesh?” was presented by Dr. Wasel Bin Shadat, an econometrician and researcher at BIDS.
The research identified the change in monthly per capita food consumption as a result of price hike or income fall using data from the 2016 household income and expenditure survey. The study anticipated less rice consumption of 390 grams in rural regions and 750 grams in urban areas per head per month to cope with a 20 percent increase in rice price, which is a total of 4.96 percent decrease in rice consumption.
However, this price increase of rice caused consumers to consume less pulse, fish, meat, vegetables, fruits, and pulses by 2.34 percent, 5.08 percent, 5.20 percent, 2.04 percent, and 15.52 percent respectively.
According to Binayak Sen, director general of BIDS, “The diet of the impoverished in this nation is still centered around rice. They lessen their diet of pulse, meat, fish, fruits, and vegetables, which are important sources of micronutrients, to absorb income and price shocks.”
In the event of a 20 percent increase in the price of the staple, the consumption of rice by the extremely poor falls by only 0.40 percent, followed by drops in the consumption of fruit and vegetables by about 28 percent, meat by about 9 percent, and fish by about 3 percent.
According to the survey, the non-poor decreased their per capita intake of rice by 6 percent, fruit consumption fell by 14 percent, and fish and meat consumption fell by 5 percent each.
The research also said, a 1 percent loss in income results in a less-than-1 percent fall in consumption of rice, pulses, eggs, and vegetables but a more-than-1 percent decrease in consumption of fish, meat, and fruits. On the other hand, a 1 percent increase in the price level causes people to consume 0.25 percent less rice, but the rate of reduction is a lot higher for fruits, meat, pulses, and other food items.
According to Dr. Wasel consumer expenditure accounts for over 70 percent of Bangladesh’s GDP, and economists and policymakers, including central bankers, are particularly interested in comprehending, evaluating, simulating, and projecting this indicator.
Hence, economists and other professionals, present at the seminar, urged the government to give the poor enough assistance to help them deal with the price shock of necessities.
