Accounting For Marginal Food Budget Share And The Engel’s Law Coefficient In Ghana: The Empirics From The Ghana Living Standards Survey Round Seven

Abstract

Using data from the Ghana Living Standards Survey seven, the paper established that the Engel’s Law is applicable to the economy of Ghana suggesting that a 10% rise in household expenditure reduces the share of the household budget allocated to food by 0.801 of one percentage point, on average, and that food is a necessity commodity in Ghana. The marginal food budget share is high at a 62 percent rate putting the economy of Ghana in the medium food insecurity category. Strenuous policy effort must be initiated to increase food production and supply in Ghana to make food not a necessity commodity anymore and move the Ghanaian economy away from the medium food insecurity category in the very near future.