PERMINTAAN BERAS DI INDONESIA: REVISITED

Abstract

This paper examines the demand for rice in Indonesia. The data used are time
series data, ranges between 1970 and 2003, and data from National Survey (SUSENAS)
2003. We employ the Almost Ideal Demand System (AIDS) and its inverse to model the
Indonesian demand for rice. We also estimate single equation, both ordinary and inverse
demand models. Las but not least, the Error Correction Mechanism is used to model the
demand. However, the single (ordinary) equation model outperforms the others.
The demand for rice in Indonesia has some regular behaviour, negative with
respect to price and positive in line with the income. However, the magnitudes of the
parameters, the elasticity, have been changing. The elasticity with respect to income is
decreasing, indicates that rice is becoming an inferior goods. Family whose expenditures
are lesser than 300,000 Rupiahs per month will increase their rice consumption in
response to the increase in their income. The changes in the elasticity and the variability
of the consumption in response to income make difficult to predict the total demand for
rice.
Keywords: Indonesia, rice, demand, AIDS/IAIDS