MA Economics

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Browsing MA Economics by Author "Agcaoili, Mercedita C."

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    Consumption patterns of farm households
    (1980-04) Agcaoili, Mercedita C.; Price, Edwin C.
    The paper's objective is to determine the demand behavior of the rural households in the Philippines. Measures of demand responses such as marginal budget shares, total expenditure and price elasticities, marginal and average propensities to consume, etc., are estimated. the main thrust, however, is to determine the effects of socio-economic variables such as household size and tenurial status on the demand parameters. Model fitting is carried out using the income and expenditure data gathered from the three outreach sites of the International Rice Research Institute. The cross-sectional data is for three years and includes 20 expenditure items and nine (9) sources of income of about 120 farm households. The observations are grouped further by household size (i.e., large and small) and by tenurial status (i.e., owner-part owner and share-leaseholder). The model is fitted in each of the 117 sub-groups defined. The key findings show the increases in total expenditure among rural households tend to decrease the marginal budget shares of food commodities and to increase those of farm inputs. This seems to imply the growing acceptance of modern technology by small farmers. The results indicate also the presence of economies of scale in household consumption especially those on food commodities. It is, likewise, evident that household size affects the reaction of households towards quality differentials of commodities. Furthermore, the parameters derived for personal expenditure item validate rural household's high regard for education. Based on the results of the research study, two major recommendations are forwarded: i) that government policies be geared such that increased production of a particular commodity can be attained with the use of new-improved technology and inputs provided that farmers (small and large) are convinced that they can realize income increase; and ii) the provision of incentives for enrollment in areas (disciplines and/or skills) that have been identified as necessary to support or provide the trained manpower needs of given sectors that are supposed to provide the lead towards more rapid economic growth.