| Summary: | Food and nutrition policy analysis, especially for a developing country, requires information on food price and expenditure elasticities. Often, such information is not readily available for different income groups. For Lesotho, this information currently does not exist. This study analyses the food consumption and nutrition of households in Lesotho by estimating a set of food demand parameters. The Lesotho government, in the process of developing the agriculture sector, aims to increase the domestic production of maize through the Food Self Sufficiency Programme (FSSP) by providing incentives to producers. The FSSP has the potential to affect prices at the consumer level for maize and maize meal. Higher maize meal prices could have adverse nutritional impacts especially for low income households. The objective of this study was to analyze the effects of price and income changes on the nutritional well being of consumers with a focus on low income households. A related objective was to provide an estimate of the parameters for food demand. The Almost Ideal Demand System was used to estimate demand parameters for seven food groups: maize, other cereals, meat, milk, eggs, fats and oils, and fruits and vegetables. Data for analysis was obtained from the Household Budget Survey (HBS) that was carried out in 1986/87 by the Bureau of statistics over a twelve month period. Households were divided into low, middle and high income groups. The share equations were first estimated by imposing the homogeneity and symmetry restrictions. The null hypothesis of symmetry given homogeneity is not rejected in any of the income groups. The results of the estimation indicate that total food expenditure elasticity declines as income increases. The sign and magnitude of the elasticities indicates that all food groups are relative necessities. Expenditure elasticity of maize declines from 0.91 for the low income group to 0.47 for the high income households. The estimated demand and expenditure elasticities were used to calculate calorie and protein price and expenditure elasticities for the low income households. (Abstract shortened by UMI.)
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