The demand for dairy products in Malawi

Abstract

In this paper a multi-stage almost ideal demand system with censoring was estimated to assess Malawians demand for 6 dairy products fresh milk, powdered milk, margarine and butter, chambiko, yogurt and cheese). We found that the consumption of dairy products depended on whether the household was rural or urban, the region of the country (viz. North, Centre, South) and the household poverty status. The results also show that the demand for fresh and powdered milk, butter and margarine, cheese and yogurt was price inelastic, although the demand for chambiko was price elastic. Fresh milk and powdered milk were found to be gross substitutes and the consumption of milk was found to increase with household income. This work is part of the ‘Assessing the Contribution of the Dairy Sector to Economic Growth and Food Security in Malawi’ project