Estimation of Almost Ideal Demand System on Food Expenditure in Erbil inYear 2012

Abstract

Based on household expenditure survey data for Erbil governorate in year (2012), the food expenditure function have been estimated via applying (OLS) method. The study sample constitutes of (1933) households by using Almost Ideal Demand System (AIDS) model. Then, expenditure and price elasticity of food demand have been derived from the estimated model after subjecting to traditional criteria. Overall the results were satisfactory, especially the compatibility of the sizes and signs of the elasticity, with theoretical and previous expectations. So, the results showed that there are another non-economic factors exists which effect on the food expenditure significantly like household size and its composition. Finally, the results have been used to predict the future demand on food. At the end of the study numbers of proposals and conclusions have been outlined, based on the estimated results.