Estimating Almost Ideal Demand System for the most important grains in Saudi ‎Arabia

Abstract

:The study relied on secondary data for a time series during the period (2000-2022) ‎which was collected from various sources. The study aimed to estimate the different ‎demand functions and elasticities (price – intersection – spending) for rice, maize and ‎wheat. The Almost Ideal Demand System‎‏ (‏AIDS) used in the study and analysis of ‎commodity demand equations systems according to their diversity or source. The ‎research dealt with the application of this model in the study of local demand for the ‎most important grains consumed in the Kingdom of Saudi Arabia (rice, maize, wheat). ‎The results found that the proposed model achieves the conditions of the demand ‎function: addition, homogeneity, and symmetry. The price elasticities of demand, ‎intersectionality, and spending were also calculated. It was noted that the price ‎elasticities of demand are negative, and less than one correct for all studied ‎commodities, which indicates that they are necessary commodities. It was also found ‎that there is a direct relationship between commodity prices The three and the ‎quantities of other goods, which indicated the existence of a reciprocal relationship ‎between them, which was consistent with the economic logic. It was also noted that ‎the indication of the spending flexibility for both rice and maize was positive and less ‎than one, which means that they are considered ordinary goods for the Saudi ‎consumer. The study concluded that there should be a comprehensive program for the ‎strategic stock of food sufficient for sufficient periods according to the specifications ‎of each commodity and its importance.‎