Developments of the consumption of Vegetable oils in Relation to Food subsidy in Egypt

Abstract

This study intends to study the developments in consumption pattern of vegetable oils in Egypt. The study identified the major variables responsible for explaining the recent changes in this pattern. Also, the study intends to explain the interrelationship between the existing pattern and government pricing and distribution system for vegetable oils and major substitutes. The study specifies income, family size, urbanization, and developments in the prices of major substitutes as the major variables responsible for changing the consumption pattern. The study uses cross section data related to the family budget surveys of 1965 and 1974 – 1975 to study the income effect. Engle curves were estimated using double logarithm functions for vegetable oils, shortening, butter, and Ghee in urban and rural areas. Marginal propensity to consume are estimated for these commodities at different expenditure levels. Also the difference in the level and expenditure elasticity between explained and studied. The study examined the effect of family size on consumption level of vegetable oils. Also the government pricing and distribution policy related to vegetable oils was explained and assessed. The distribution equity of vegetable oils is assessed though the use of genni coefficient.