Investigating Household Food Expenditures and the Engel’s curve in Ghana: The Empirics

Abstract

This paper examines Ghana's annual household food expenditures and their Engel food curve using data from the 2013-2014 sixth round of the Ghana Living Standards Survey which covered 16, 772 household and lasted for one-year. A sample size of 16,035 was however valid for the model estimation in this paper. Household demographics and specific variables, including income, education status, religion, number of rooms, access to clean water, ownership of household, electricity supply to household, and refrigerators availability at the household that influence the annual household food budget decisions in Ghana are examined. It establishes an inverse relationship between the share of the household food budget and the increase in household income. The paper established high annual household food expenditure elasticity with 0.52 pesewas out of every one cedi serving as an annual household marginal food budget share in Ghana, on average and ceteris paribus and provides additional statistical evidence that characterises food as a necessity in Ghana. Policy-wise, the central government is advised to take more pro-poor agricultural interventions to improve food production and reduce its cost in the country. With a rapidly growing population, these measures will bring Ghana's economy into a state of food security and allow the country to also achieve the SDG 2 goals it has set for itself.