An Analysis of Household Rice and Noodle Consumption in the Philippines

By applying a Seemingly Unrelated Regression Model on Family Income and Expenditure Survey (FIES) data, the study examines the relationship of household rice and noodle consumption in the Philippines. Results show that noodles are already a substitute good for rice, but rice is not a substitute good for noodles. In addition, their respective demand exhibits negative relationship with their own prices and positive relationship with respect to household income which supports the idea that both rice and noodles are normal goods. A number of significant variables on the characteristics of household heads suggest the importance of household heads in determining consumption decisions. These include age, sex, marital status and educational attainment. Spouse employment is also found to negatively influence rice consumption. Lastly, the study also reveals that households in the urban area, particularly in Luzon, which is the biggest island in the Philippines, are most likely to have lower demand for rice as compared to their rural counterparts. Meanwhile, the opposite is true for noodle consumption