Economtric study of the changes in the consumption expenditure patterns in Egypt

Descriptive analysis show that the total and food consumption expenditure patterns have changed in the two survey periods as a result of liberalisation program and economic reform. The food expenditure share decreased for rural and urban areas from 1990/1991 s to 2004/20055s while for most of the other commodities the shares increased. Empirical analysis indicated that total expenditures (as a proxy for permanent income) had a positive significant association with all expenditure categories. The expenditure elasticities of food, health, hotel-restaurant, and various commodities-services have decreased significantly, whereas transportation-communication,culture-entertainment, and education show significant increase in the total expenditure elasticity. This study revealed that the food expenditure structure in Egypt has diversified, where fruits, meats, fish, and milk-eggs were near to the luxury commodities in 1990/1991, and then moved up to the necessity commodities in 2004/2005. Moreover, consumption expenditure patterns of urban and rural households and households at different income levels were analyzed in order to investigate factors controlling consumption expenditure patterns. The results show that there are no statistically significant variations between the urban and rural total expenditure elasticity of commodity groups, except for food, and various commodities-services which are higher at rural than urban areas. For food sub-groups, rural elasticities tend to be higher than urban ones. Finally, the total expenditure elasticities of food, clothing, and hotel-restaurant are lower at high income groups. Also, households with higher income are less responsive to changes in income for all food sub-groups. On the basis of this observation it is deduced that the major factor in the change of food consumption during the study period is the change in real income. This study recommended enhanced future food policies through sustainable increased per capita real income is needed in order to improve the living standard and nutritional level, with focus on increasing animal production and fisheries.