Document Type : Research Article-en
Authors
1 Agricultural Economics department. Ferdowsi University of Mashhad. Mashhad. Iran
2 Ferdowsi university of mashhad
Abstract
Title:
Rural-Urban Disparities in Animal-Source Food Demand and Welfare Losses During COVID-19 in Iran: A QUAIDS Approach
Introduction:
This study investigates how the COVID-19 pandemic, marked by declining incomes and rising food prices, impacted the expenditure share and consumption patterns of animal-source foods (ASFs) in Iranian households. ASFs, including meat, dairy, eggs, and aquatic products, are vital for protein and essential nutrients, particularly during crises, but are costly and sensitive to supply chain disruptions. The research explores how economic and health-related shocks altered household budgets and food consumption, focusing on ASFs due to their nutritional importance and budgetary impact. Using the Quadratic Almost Ideal Demand System (QUAIDS) model, the study provides a nuanced analysis of short-term pandemic effects, distinguishing between urban and rural areas to capture regional disparities. It also estimates welfare losses through compensating variation and analyzes Hicksian price elasticity, offering actionable insights for policymakers to address nutritional deficits and mitigate welfare losses. This research fills a critical gap by providing empirical evidence on pandemic-induced food demand disruptions in Iran, contributing to broader efforts to improve food security and ensure access to nutrient-rich diets for vulnerable populations.
Data:
The analysis uses cross-sectional household expenditure data from 2019 (pre-pandemic) and 2020 (peak pandemic) in Iran, covering 38,099 households in 2019 (52% urban, 48% rural) and 37,294 households in 2020 (51.4% urban, 48.6% rural). Variables include ASF expenditure shares (livestock meat, poultry, dairy, eggs, etc.), household demographics, and income levels.
Method:
1. QUAIDS Model: A structural demand system is employed to estimate price and expenditure elasticities, capturing nonlinear Engel curves and substitution effects.
2. Welfare Loss Calculation: Hicksian (compensated) price elasticities measure welfare losses due to pandemic-induced price and income shocks, using CV.
3. Software: Stata/MP14.0 was used for econometric analysis.
Results:
1. Descriptive Insights:
- Rural households allocated 53.4% of food expenditure to ASF in 2019, compared to 31.4% in urban areas. By 2020, rural ASF expenditure dropped to 41.8%, while urban spending fell to 34.3%.
- Poultry consumption dominated ASF expenditure (32.3% urban, 34.9% rural in 2019), but dairy and eggs saw significant declines during the pandemic.
2. Elasticities:
- ASF demand was income-elastic (1.41–1.48 for urban, 1.48–1.60 for rural), indicating ASFs are normal goods.
- Price Elasticities: Rural households exhibited higher sensitivity (e.g., livestock meat: -0.48 rural vs. -0.86 urban), suggesting greater vulnerability to price hikes.
3. Welfare Losses:
- Rural households faced larger losses (IRR 122,915 vs. IRR 118,908 for urban households annually), driven by reduced access to livestock meat and dairy.
- Eggs and aquatic meat showed the highest welfare losses, reflecting supply chain disruptions.
Conclusion:
This study highlights the economic impact of the COVID-19 pandemic on Iranian households, particularly their consumption of animal-source foods (ASFs). Using the QUAIDS model, the research reveals significant disparities between rural and urban areas, with rural households facing higher welfare losses and greater price sensitivity. Eggs, poultry meat, and dairy products were classified as necessary goods, while livestock meat, aquatic meat, and animal oils were more income-sensitive, indicating luxury status. Rural households, despite lower price increases, were more vulnerable due to limited budgetary flexibility, emphasizing their reliance on ASFs for protein intake. The findings align with studies from other middle-income countries, such as China and Sub-Saharan Africa, where rural populations were disproportionately affected by price volatility and allocated larger shares of their budgets to food during crises. This research underscores the precarious state of food security during economic shocks, particularly for rural communities, and provides valuable insights for policymakers to address nutritional deficits and mitigate welfare losses in future crises.
Policy Implications:
This study underscores the need for targeted policies to enhance food security and economic resilience in the post-COVID-19 era. The findings highlight the critical role of animal-source foods (ASFs) in Iranian diets, particularly their sensitivity to income and price changes, which disproportionately affect rural households due to limited income sources and market access. To address these challenges, policies should focus on strengthening ASF supply chains through infrastructure investment, storage improvements, and financial support for producers. Urban households, facing rising food costs, would benefit from price controls and subsidies on essential items, while rural areas require enhanced social services, such as healthcare and financial assistance, to bolster economic resilience. Additionally, promoting plant-based protein alternatives could offer a sustainable, cost-effective solution to reduce dependency on ASFs and improve long-term food security. The study advocates for a multi-faceted approach, combining targeted interventions, supply chain resilience, and dietary diversification, aligning with broader academic discourse on sustainable food systems and crisis management. These measures can mitigate the lingering economic impacts of the pandemic and ensure equitable access to nutritious food for all households.
Keywords:
COVID-19; Animal-source food; Welfare losses; QUAIDS model; Iran
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