Investigating the Food Baskets in Urban Households of Iran Using System Requirements Equations

Nutrition and consuming food are very important in the planning of the household budget . The analysis of the allocation of household income to goods and services is of interest to economists and politicians, and estimating the demand for goods and services is important in identifying future preferences and needs. Recognizing household consumption priorities will help plan to increase their welfare. Therefore, the present research aims to study the food basket in urban areas of Iran.
Using the seemingly unrelated regression (SUR) and maximum likelihood (FILM) estimation method, the almost ideal demand systems (AIDS) and linear expenditures (LES) for urban households, as well as the testing of symmetry and homogeneity hypotheses using the Ivyz software Eviews) were estimated. At the end of the incremental, cross, and income separately for each The demand equations are calculated.
Findings: The homogeneity hypothesis for all three groups of bread and cereals, protein and fruits and vegetables is accepted in the food demand function of AIDS, but in the LES demand function, the homogeneity hypothesis is rejected for the fruits and vegetables group, and in the consumption of this group housholds have monetary illusion. According to the results of the calculation of elasticity, in the food demand AIDS function, the group of bread and cereals are essential commodities, protein, fruits and vegetables, and other groups are considered to be luxury and for the LES food demand function, all commodities are essential.
According to the comparison of the results of two demand models, the bread and cereal group in both systems are considered as essential commodity and as a result, they have more effects on welfare changes of households. Also, households do not have monetary illusions for the bread and grain group and are sensitive to real income. Given these results, when considering policy making, we should pay particular attention to the bread and cereal group as the essential commodities of the household. The protein and vegetables group for the household is considered a luxury commodity. As the price of these groups rises, the demand for them decreases . In the event of an increase in household income, they will buy this group of goods.