DETERMINANTS OF FOOD CONSUMPTION EXPENDITURE IN ETHIOPIA

This study uses the 2004/05 household income and consumption expenditure survey to examine the determinants of household teff expenditures by using heteroskedastic double-hurdle model to accommodate zero observations in the sample. Mostly importantly, the study also calculates elasiticties parameters for the explanatory variables to examine their effect on teff consumption. The double hurdle model for teff consumption suggested that age of head of the household was determining the level of consumption while it was not important to influence the household’s decision to consume. The estimated results indicated that sociodemographic characteristics (household sizes, dependency ratios, education, employment status, gender) were significant in explaining both the decision to consume and the level of teff consumption. In addition, economic factors such as income and prices were among the significant determinants of teff consumption demand. Calculated own price elasiticties for the main regions indicated that Addis Ababa was relatively less sensitive to changes in teff prices. Finally, Tobit model was used to observe consumption patterns for maize, sorghum wheat and teff. Income and education were positively and significantly affecting teff expenditures while they were negatively associated with maize consumption. Educated head of the household had remarkably low consumption of maize and sorghum