Household Food Demand Elasticities in Urban and Rural Iran, 2020–2022: Policy Insights on Essential Goods

Abstract

Background: Rising food prices and inflation have posed major challenges for household food security in Iran. Understanding how households respond to price changes is essential for nutrition and policy planning. This study aimed to estimate and compare the price elasticity of demand for major food groups among urban and rural households in Iran during 2020–2022. Methods: Household food consumption and price data were obtained from the National Center for Statistics of Iran. Price elasticities were calculated for eight food groups using standard demand elasticity models, with separate analyses for urban and rural households. Results: Across all three years, most food groups exhibited inelastic demand (elasticity values between 0 and 1), confirming their essential role in household diets. Oils and fats were the only group with elasticity greater than 1, indicating high sensitivity to price changes. Overall demand elasticity was consistently higher in urban households compared to rural households. Conclusion: The predominance of inelastic demand for staple foods highlights their essential nature despite rising inflation. These findings provide important insights for food and nutrition policy, particularly in designing subsidies and support programs for vulnerable groups.