Food Consumption Patterns and Household Welfare in Eswatini: An Empirical Analysis Using Household Survey Data

Abstract

This paper analyzes the food consumption patterns of poor and non-poor rural households in Eswatini using the Quadratic Almost Ideal Demand System (QUAIDS) model to derive the estimates of price and expenditure elasticities for seven major food commodities. The derived elasticities are used in estimating the distributional welfare effects of a 43% price increase for maize using the compensating variation approach. The results of the study indicate that majority of the food items are demand inelastic with meat and dairy exhibiting elasticities greater than one, while maize is the least responsive to both price and expenditure. The results further show that high maize prices have a negative effect on poor households who generally spend more on maize to supplement their consumption requirements. Therefore, policy strategies that focus on expanding agricultural production and diversification of production activities especially at the household level can raise rural household income, lower the price of maize and ultimately improve food consumption for rural households. Moreover, this will insure net-buying households against market risks by lowering high reliance on the market and enable more consumption from own production. This study makes an important empirical contribution by providing useful insights on the estimates of demand elasticities for major food items consumed, taking into account that little attention has been devoted to empirical analysis of food consumption behavior in Eswatini.