Statistical Estimation for Expenditure and Consumption Functions of Fruits based on Family Budget Data in the Arab Republic of Egypt

Abstract

Despite the importance of the highly nutritional value of fruit, the real share of expenditure allocated for food in general and for fruit in particular in both urban and rural areas is decreasing due to declined real per capita income. The present study tries to find out parameters of changes in food consumption patterns including fruit consumption share between 2009/10 and 2012/13. Expenditure and consumption functions were statistically estimated based on family budgets data. Major study's findings are summarized as follows: 1. While time series analysis showed increased time trend for per capita fruit consumption between 2001 and 2013 at a rate of about 0.390 kg per year and per capita consumption of 20 kg/year on average, family budget data of 2009/10 and 2012/13 showed the opposite, a declining per capita consumption for fruit at 36.7 kg and consequently increased size of production gap fruit at about 48.3 thousand tons per year, and a decreased self-sufficiency of fruit at a rate of about 1.7% annually during the same period. These results may be due to the use of monetary but not real values of per capita income as in the case of using family budget data. 2. The estimates of income elasticities of spending and consuming fruit based on both family budgets of 2009/2010 and 2012/2013 are relatively high, showing flexibility of demand for fruit in general. This is may be due to aggregation of fruit data by both family budgets, as some fruits are normal such as oranges, grapes, and bananas and some others are flexible such as apples and mangoes. 3. Data evaluation of both family budgets of 2009/10 and 2012/13 showed lower per capita spending on fruit than ten years before. This is may be due to declined real per capita income because of increased inflation, increased population rates and socio-political and socio-economic changes since the events of 2011 in Egypt. 4. A sensitivity analysis was made to study the effects of increasing individual consumption expenditures in 4 scenarios by 5%, 10%, 15%, and 20% on fruit self-sufficiency. Increasing individual expenditure on fruit by 5% will lead to increase total fruit consumption and consequently decrease of fruit gap. Thus 5% increase in per capita fruit expenditure will lead to reduce fruit self-sufficiency by 14.4%. Similarly, increasing per capita fruit expenditure by 10%, 15%, and 20% will lead to reducing self-sufficiency by 13.6%, 12.9%, and 12.3% respectively.