The structure of strategic food demand in Indonesian urban: An application of a Linearized Almost Ideal Demand System (LA/AIDS)

Abstract

Indonesia’s strategic food refers to a group of food products that are important in meeting national food needs. This strategic food is the focus of government attention because of its significant impact on food security, the economy, and social stability. The research aims to analyze urban household preferences for strategic food, analyze estimates of urban household demand for strategic food, and analyze the impact of price changes and urban household expenditure on strategic food demand. The research uses Susenas data for 2023, specifically for urban households. Strategic Foods are grouped into rice, corn, soybeans, shallot, chilies, poultry meat, poultry eggs, ruminant meat, consumer sugar, and fish. Analysis of household preference data was carried out using expenditure shares. Demand estimates were analyzed using the LA/AIDS model with the SUR approach. The results of the analysis show that the highest share of urban household expenditure is for rice. Beef is still a luxury commodity with elastic price elasticity. Poultry meat, poultry eggs, and ruminant meat are commodities that are substitutes for each other.