POLICY IMPLICATIONS OF ESTIMATING FOOD ELASTICITIES IN ROMANIA

Abstract

In Romania, the tendencies in the consumption of main food products reveal the orientation towards the Western Europe food consumption pattern. The differences between the urban and the rural areas are maintained, with a higher consumption in the urban area. The analysis of purchased and consumed quantities for five important groups of products – bread, meat, milk, fruit and vegetables – highlights the characteristic of food consumption in Romania:  the relatively low share of purchased food in total consumption in certain products (vegetables, milk and meat). The evolution of the food purchases in the last decade, analyzed in conjunction with the estimated expenditure elasticities and price elasticities, suggests that the increase of cash incomes can accelerate the shift to a Western type of consumption pattern.