How Price Affects the Demand for Food in Australia

A team of researchers from the School of Accounting, Economics and Finance have released a report for the Australian Government's Rural Industries Research and development Corporation (RIRDC). How Price Affects the Demand for Food in Australia - An analysis of domestic demand elasticities for rural marketing and policy looks at the relationship between pricing and the level of demand for food. The research indicates that the demand for certain types of food is not affected by changes in prices. If the food product is regarded as essential by consumers then price has little effect on demand as in the case of milk and sugar. Demand for products that are not essential can be highly susceptible to variations in price. This is the case with meat, rice and margarine. This concept is referred to as demand elasticity.

There has been a distinct lack of up-to-date estimates of these relationships to guide policy makers and analysts in the Australian food industry. The findings from this report will be of strategic significance to all those involved in the management and analysis of the Australian food and agricultural sectors.

The project team was made up of Mehmet Ulubasoglu, Debdulal Mallick, Mokhtarul Wadud, Phillip Hone and Henry Haszler.