Research article

Structure of Vegetables Demand in India During Covid-19 Regime - An Econometric Approach

Abstract

This study aimed to analyze the expenditure, own and cross-price elasticities of ten major vegetables in Southern India. using cross sectional data from selected households in four southern states of India viz., Andhra Pradesh, Telangana, Karnataka and Tamil Nadu during 2020 to 2022. We use Working-Leser model, LA/AIDS model and QUAIDS model to compute elasticities and found QUAIDS model as the best fit. As expected the own-price elasticities for all the vegetables are negative and the expenditure elasticities are more than one, except tomato, lettuce and green sorrel. The cross-price elasticities showed that potato is complementarity to tomato, lettuce and green sorrel and the substitution effects of price change were not quite strong, except ivy gourd for bitter gourd; potato for ivy gourd and green sorrel for bitter gourd. Systematic differences in the absolute magnitudes of the expenditure elasticity and own-price elasticity were found and the demand for vegetables is largely influenced by the price change than the income/expenditure change. So, an appropriate price intervention policy by the Government may be more effective in influencing consumption pattern of vegetables enjoying more elastic demand.

Keywords: working-leser model, linear approximation almost ideal demand system, quadratic almost ideal demand system, southern india, vegetables demand.