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Abstract

Natural disasters are always associated with the disruption of local economies and hurting the local people. Households usually respond to those difficulties by cutting their consumption especially for non-necessity goods. Hence this paper discusses the pattern of food demand when the earthquake occurs. In addition, it also observes the price and expenditure elasticities of food demand by estimating a Linear Approximate Almost Ideal Demand System (LA-AIDS). This paper also examines the effect of earthquake on living standards of households. It finds that food demand estimations on rice and oil have price inelastic demand, while vegetable, meat, and fish are price elastic. Furthermore, poor households are more likely to have a greater negative impact than rich households although the effect is quite small.

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