Food Consumption Pattern in Sri Lanka: An Application of the LA/AIDS Model

The value of parameter estimates and demand elasticities of major food items is well understood in the context of a country's food and nutrition policy, basic needs concerns and its international trade decisions. Unlike the single equation approach in the previous demand studies in Sri Lanka, in this paper the linear approximation version of the almost ideal demand system (LA/AIDS) model is implemented using the 1985 and 1990 household survey data to derive theoretically consistent demand estimates and elasticities for eleven food groups. Demand theoretic constraints are formally tested and the effects of socio-demographic variables such as family size, education and location of residence on Sri Lanka's food demand system are analysed. The study also analyses the changing nature of food consumption pattern between the two periods and draws implications for food policy programs in the country.