A Two-Stage ELES-AIDS Model Rural Household Demand Analysis: Evidence from South-Eastern, Cambodia

Sar Sary, Research and Development Technology Canter, National Polytechnic Institute, Ministry of Labour and Vocational Training, Phnom Penh, Cambodia; Key Laboratory of Digital Agricultural Early-Warning Technology, Chinese Academy of Agricultural Science and Ministry of Agriculture, Beijing, China

Bun Phearin, Research and Development Technology Canter, National Polytechnic Institute, Ministry of Labour and Vocational Training, Phnom Penh, Cambodia

Sarin Sereyvatha, Research and Development Technology Canter, National Polytechnic Institute, Ministry of Labour and Vocational Training, Phnom Penh, Cambodia

Thouk Davit, Research and Development Technology Canter, National Polytechnic Institute, Ministry of Labour and Vocational Training, Phnom Penh, Cambodia

Sar Saren, Ministry of Agriculture, Forestry and Fisheries, Phnom Penh, Cambodia

Muyobozi Sikalubya, School of Humanities and Social Sciences, University of Zambia, Lusaka, Republic of Zambia

Abstract
A two-stage budgeting ELES-AIDS system employs to explore the household expenditure and food demand consumption in rural Cambodia. In the first stage, we apply the Extended Linear Expenditure System (ELES) to access household expenditure including food, health, education, clothing, living, transportation, fuel, and equipment. A 1% increase in price would increase marginal budget share ( by 0.0538%, 0.0127%, 0.018%, 0.0124%, 0.0193%, 0.0059%, 0.0115% and 0.0113% for food, health, education, clothing, housing, transportation, fuel and equipment, respectively. In addition, the study applied the Almost ideal Demand System to assess the demand for food consumption. The results indicate that a 1% price increase of food items would increase prices by 0.1575%, 0.00645%, 0.0061%, 0.0222%, 0.0464%, 0.0464% and 0.0174% for rice, maize, potato, eggs, vegetables, meat and fruits, while beverages price would decrease by 0.1497%. Furthermore, expenditure elasticity of rice, maize, potato, eggs, and vegetables is less than one, implying that rice, maize, potato, eggs, and vegetables are necessary commodities, while the elasticity of meat, fruit, and beverages is significantly and greater than one, thus, categorizing them as luxury commodities.

Keywords
ELES model, Cambodian rural households, Expenditure elasticity, AIDS model

Cite this paper
Sar Sary, Bun Phearin, Sarin Sereyvatha, Thouk Davit, Sar Saren, Muyobozi Sikalubya, A Two-Stage ELES-AIDS Model Rural Household Demand Analysis: Evidence from South-Eastern, Cambodia , SCIREA Journal of Computer. Volume 7, Issue 3, June 2022 | PP. 51-74. 10.54647/computer52304

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