Understanding Indonesian Most Strategic Food Consumption Pattern and Welfare Impact of Price Increase Events : a household microdata analysis

Abstract: The study’s principal aims are to understand the Indonesian most strategic food consumption pattern and to calculate the welfare impact of recent price increase events. The food classification used in this study is Indonesia’s most strategic food including rice, chicken meat, beef, chicken egg, shallot, garlic, chili, fish, cooking oil, white sugar, flour; plus, additional classification including processed food and beverages and other food items. Data employed in this study are 2018 national socio-economic survey from Indonesia Statistical Agency. The data covers household consumption and demographic variables, representing all Indonesian households. This study accounts the heterogeneity across Indonesian region by estimating QUAIDS for five regional classifications: Sumatera, Java-Bali, Kalimantan, Sulawesi, and Nusa Tenggara-Maluku-Papua (Nusmapua). This study found that regional heterogeneity plays an important role in explaining the most strategic food consumption pattern in Indonesia. The welfare impact from two price increase events is estimated and found to be vary across regions.