This study analyzes the consumption elasticities of five key seasoning commodities in Indonesia: cooking oil, red onion, garlic, red chili, and cayenne pepper. A Linear Approximate Almost Ideal Demand System (LA/AIDS) model is employed, incorporating instrumental variables to address potential endogeneity. The results indicate that the unconditional income and own-price elasticities are inelastic, with income elasticities ranging from 0.74 to 0.75 and own-price elasticities from –0.77 to –0.94. No significant evidence of substitution or complementarity among the seasonings is found. Furthermore, elasticity remain similar before and after the COVID-19 pandemic, and across regions with different economic sizes. However, regions known for spicy cuisines demonstrate higher elasticities than those with milder culinary traditions.
Fathul Muin, M. (2025). Demand Elasticities for Selected Seasoning Commodities: An Almost Ideal Demand System with Instrumental Variables. Estudios De Economía, 52(2). Retrieved from https://estudiosdeeconomia.uchile.cl/index.php/EDE/article/view/81726
