The formation of consumption habits in the dynamic demand analysis of tea, sugar and sugar cubes basket of urban households in Iran


Articles in Press, Accepted Manuscript
Available Online from 07 February 2026

Document Type : Research Paper

Authors

1 Ph.D student Department of Agricultural Economics

2 Assistant Professor Department of Agricultural Economics

3 Development and Foresight Research Center, Planning and Budget Organization, Tehran, Iran.

Abstract
Considering the role of tea, sugar and sugar products in the consumption of Iranian households, the aim of the present study is to investigate the consumption behavior of urban households in Iran during the period of 1997 - 2022 by applying the quadratic almost ideal demand system and the error correction model of the almost ideal demand system . The results show that in the dynamic model, the null hypothesis of the coefficients related to consumption habits is not accepted, and the estimation of the quadratic almost ideal demand system provides more reliable coefficients and elasticities and is better to use a dynamic model in explaining the consumption behavior of sugar and tea in urban households. Also, error correcting model shows that habit formation significantly determines the expenditure of the budget share for foreign tea and sugar in the short term. Also, the error correction coefficients for foreign tea, Iranian tea and sugar are negative and significant as expected.Due to the low coefficients of cross elasticity of demand for Iranian tea, foreign tea, sugar and sugar, it should not be expected that the change in the price of foreign (Iranian) tea will significantly change the demand for Iranian (foreign) tea. Therefore, perhaps in the application of optimal demand management and consumption pattern planning, using the substitute product price policies for foreign and Iranian tea cannot be very effective.

Keywords

Subjects
  • Receive Date 17 October 2024
  • Revise Date 11 February 2025
  • Accept Date 06 May 2025
  • First Publish Date 07 February 2026
  • Publish Date 07 February 2026