DETERMINANTS OF FOOD EXPENDITURE PATTERNS AMONG HOUSEHOLDS IN OSHODI-ISOLO LOCAL GOVERNMENT AREA OF LAGOS STATE, NIGERIA

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1 DETERMINANTS OF FOOD EXPENDITURE PATTERNS AMONG HOUSEHOLDS IN OSHODI-ISOLO LOCAL GOVERNMENT AREA OF LAGOS STATE, NIGERIA ABSTRACT Aminu*, F. O., Adebanjo, O. A. and Mohammed, H. A. Department of Agricultural Technology, School of Technology, Yaba College of Technology, P. M. B. 2011, Yaba, Lagos State, Nigeria. * Tel: , The study investigated the determinants of food expenditure pattern among households in Oshodi-Isolo Local Government Area of Lagos State, Nigeria. Primary data used for this study was collected with the aid of one hundred and twenty wellstructured questionnaire using simple random sampling techniques with households being the unit of analysis. Data were analysed using descriptive statistics and Ordinary least square (OLS) regression analysis. The results of the analysis of socioeconomic characteristics showed that the mean age of the respondents was 42 years, 56.67% were male, 55.83% were married and 18.33% completed secondary school. Analysis of expenditure on food among the households in the study area was found to be between 10,000 and 15,000 on food at home, 33.33% spent between 5,000 and 10,000 on food outside the home, while 40% spent more than 20,000 as total monthly food expenditure. The results of the OLS analysis revealed that that age of the household head, educational level and size of monthly income were the determinants of household monthly expenditure on food. It is thus recommended that trainings should be organised through workshops and seminars on how the household heads can increase their income base through self-empowerment programmes so as to reduce dependence on governments. Keywords: determinants; expenditure; food; households; urban INTRODUCTION According to Thirumarpan, (2013) the nature and patterns of food expenditure reflect the socio-economic characteristics of households. A household s relative expenditure on food is a reliable indicator of vulnerability. It describes household s capacity to cope with price increases, as well as their ability to remain productive by investing in health services, education, tools and other productive assets for its members. Households spending in excess of 65% of their total expenditure on food are clearly vulnerable in this regard as such a high percentage suggests that the household is forced to choose between meeting their food and non-food needs or reduce consumption of one or both below their needs (Thirumarpan, 2013). Households have varying degrees of spending capacity which influences their spending patterns. According to Engel s law of expenditure, proportion of expenditure spent on food is inversely related to total income (Olayemi, 2004; Adeniyi et al., 20). The level of household income is often a major determinant of expenditure patterns of households, and hence differences between patterns of expenditure are largely a reflection of differences in income between household groups or individual households (Babalola and Isitor, 2014). Studies (Njimanted, 2006; Umeh and Asogwa, 20; Babalola and Isitor, 2014) have shown that poverty in developing countries, like Nigeria, takes various forms such as low nutritional status, low level of education, decline in the spending on social services, high percentage of household income spent on food, low level of savings, low level of investments and low level of productivity. Thus study on household income and expenditure is important in addressing the poverty situation in the country. Dankwa et al. (1992) viewed the total effect of household size on expenditure as a combination of two effects- a specific effect and an income effect. The specific effect results from the increase in need of various commodities when family size increases. The increase in need is usually less than proportional to the increase in size because of the economies of scale in large households. On the other hand, the increase in family size does not increase the need for every commodity in the same proportion and indeed may reduce the need for some. An increase in family size makes people relatively poorer; this is known as the income effect. Previous studies that have evaluated household expenditure concluded that food is important in household expenditure because of the amount of income dedicated to food (Mhlongo and Daniels, 2013). They further submitted that, for most households spending on food is the largest expense followed by housing (rent, mortgage payments, opportunity cost or implied rent), but for richer households, it comes second after housing expenditure. Households with less income tend to spend higher percentages of income on food and this leaves less for education, housing and transportation. Adetunji and Adepoju (2011) opined that the level of poverty in Nigeria is on the increase due to low level of income, high cost of food products as well as the inadequate production of NJAFE VOL. No. 2,

2 food by farmers and lack of capital to establish on a large scale. Several studies have been conducted on various determinants of food expenditures such as socio-economic and demographic factors. Gheblawi and Sherif (2007) examined the factors affecting expenditure on rice, fish, and meat in the United Arab Emirate. Their results indicated that income and household size are important factors affecting the amount of money spent on the three examined food items, and that the expenditure on the three examined food items was not highly responsive to changes in households' incomes. Also, Babalola and Isitor (2014) analysed the determinants of food expenditure patterns among urban households in Nigeria. Their results showed that 60% of the household income expended on food was considered high, suggesting low income and possible high cost of food in the study area. Their results further revealed that household income, tribe, household size and the composition of the household had a significant effect on food expenditure. It is in the light of the above that this study seeks to analyse the determinants of food expenditure patterns among households in Oshodi-Isolo Local Government Area, Lagos State, Nigeria METHODOLOGY The study was carried out in Oshodi-Isolo Local Government Area of Lagos State. Oshodi-Isolo Local Government Area is located on the North-East of Lagos State, which itself is situated on the south western part of Nigeria. It is one of commercial nerve of Lagos State and accommodates both the wealthy and the poor. The area is one of the densely populated areas in Lagos state. At the 2006 Census it had a population of 621,509 people and total land area of square kilometres. Primary data used for this study was collected with the aid of one hundred and twenty well-structured questionnaire using simple random sampling techniques with households being the unit of analysis. Data on household food expenditure was provided by household heads using a memory recall method. Data collected were analysed using descriptive statistics and ordinary least square (OLS) regression model. Specifically, the ordinary least square regression was employed for the determination of the socioeconomic factors influencing household s food expenditure. Following Adewuyi et al. (2007); Babalola and Isitor (2014), the implicit form of the OLS is given as: Y = f(x 1, X 2, X 3, X 4, X 5, X 6, X 7, U) Where Y = Household estimated monthly food expenditure ( ), X 1 = Age of household head (years) X 2 = Sex of household head (Male = 1, otherwise = 0) X 3 = Education of household head (years spent in school) X 4 = Household size (No of people) X 5 = Household income ( ) X 6 = Occupation of Household head (salary earner = 1, otherwise = 0) X 7 = Tribe of household head (Yoruba =1, Otherwise 0) X 8 = Religion of household head (1= Christianity, 2= Islam, 3= Traditional) U = Error term. Three functional forms of the regression model (linear, semi log and double logarithm) were fitted for the purpose of selecting the lead equation which was chosen based on the number of significant variables, coefficient of multiple determinations (R 2 ), the signs of coefficients and F value. RESULTS AND DISCUSSION Socio-economic characteristics of the respondents Table 1 presents the result of the socio-economic characteristics of the sampled respondents in the study area. The table shows that 56.67% of the sampled respondents were male and 43.33% were female. Thirty-three respondents representing 27.5% were within the age range of with the mean age of about 42 years. This implies that the respondents were within the economically active age group and perhaps will consume more food due to their active life style. Most (41.67%) of the respondents had tertiary education, 21.67% had vocational/technical education while 18.33% had secondary education. The high educational attainment in the study area could be due to the fact that the study was carried out in an area classified as urban which could have a positive impact on their expenditure pattern. This is corroborated by the findings of Babalola and Isitor (2014) who reported 82% above secondary formal education in a related study. Majority (55.83%) of the sampled respondents were married with a mean household size of about 5 persons. This implies high responsibility and high food expenditure rate. The prominent tribe in the study area was Yoruba (62.5%). Distribution by household head s major occupation reveals that majority (50.83%) of the respondents were civil servants (paid employment) with a mean monthly income of 69,625. Paid employment indicates regular flow of income which enhance proper planning of household s expenditure. Also 52.5% of the respondents were Christians, 42.5% were Muslims NJAFE VOL. No. 2,

3 while 5% practised traditional religion. This has implication for food expenditure since religion belief prevents some people from consuming certain food items, for example, the Muslims do not eat pork. Table 1: Socio-economic characteristics of respondents Characteristics Frequency Percentage Mean Gender Male Female Age Above 60 Educational Level No formal education Primary education Secondary education Technical/vocational Tertiary Marital Status Single Married Divorced Widowed Household size >10 Tribe Yoruba Non-Yoruba Major Occupation of Household Heads Civil servant Trading Artisan Monthly Income of Household Heads 25,000 26,000-50,000 51,000-75,000 76, ,000 >100,000 Religion Christianity Islam Traditional Source: Field Survey Data, ,625 Analysis of the amounts spent on food monthly Table 2 presents the average amount spent on food by the respondents, taking cognisance of food eaten both at home and outside home. Result from the table showed that most (35%) of the respondents spent between 10,000 and 15,000 on food eaten at home monthly,.5% spent less than 10,000 while 21.67% spent more than 20,000 monthly. This is corroborated by the findings of Iorlamen et al. (2014) and Adewuyi et al. (2007). Also, obvious from the table is that about 15.83% of the respondents spent less than 5,000 on food outside the home, 33.33% spent between 5,000 and 10,000, while 20.83% spent more than 20,000 on food outside the home monthly. The high expenditure on food outside the home could be because majority of the respondents are civil servants and therefore, patronize fast food joints due to the nature of their work and transportation network in the study area. Distribution by total expenditure on food monthly revealed that 40% of respondents spent more NJAFE VOL. No. 2,

4 than 20,000 on food monthly, 33.33% spent between 10,000 and 15,000 while only 1.67% spent less than or 10,000 on food monthly. Determinants of food expenditure in the study area The results of the regression analysis used to determine the factors that influence food expenditure by the respondents is presented in Table 3. The double-log model was chosen as the lead equation because it had more number of significant coefficients which conform to the a-priori expectations, highest coefficient of determination R 2 and significant F value. The coefficient of multiple determinations (R 2 ) was This implies that about 70% in the variations of household food expenditure was jointly explained by the independent variables in the model. The F-ratio of significant at 0.01 alpha levels provided the evidence that the chosen model is appropriate and fit for analysis. The result revealed that Age of the household head (p<0.01), educational level (p<0.05) and size of monthly income (p<0.01) were the significant factors influencing the household monthly expenditure on food. Table 2: Analysis of the amounts spent on food monthly Amount( ) Frequency %Total Food at home <10, ,000-15, ,001-20, Above 20, Food outside home <5, ,001-10, ,001-15, ,001-20, Above 20, Total amount spent on food 10, ,001-15, , Above Mean 21,0 Source: Field Survey Data, 2016 Table 3: Determinants of food expenditure in the study area Variable Coefficient T-ratio Significance Constant *** Age of household head *** Educational level ** Household size Size of monthly income *** Occupation Tribe ).446 Religion R Adj R F *** ***variable significant at 1% ** Variable significant at 5% Source: Computed from Field Survey Data, 2016 The positive significant relationship between the age of the household head and the household monthly food expenditure implies that the older household heads spend more on food than the younger ones. This could be because the older household heads are more aware of the importance of quality food and cautious of their diet and therefore eat high quality and expensive food. This result disagrees with the findings of Thirumarpan, (2013) and Osinubi, (2003) that age of household reduces the share of household expenditure on food. The positive significant coefficient of the educational level of household heads implies that educated households are more knowledgeable about the importance of quality food and nutritional standard of their households. This is in consonance with the findings of Adewuyi et al. (2007). Furthermore, the positive relationship between the size of household monthly income and household monthly food expenditure implies that as the income level of the household head increases, the household purchasing power increases. i.e., more money will be available for food items in the household. From the result the expenditure on food will increase by 28kobo for every 1 increase in NJAFE VOL. No. 2,

5 income of the household heads. This is corroborated by Oladimeji et al. (2015), Babalola and Isitor (2014), Iorlamen et al. (2014), Thirumarpan (2013) and Adewuyi et al. (2007). CONCLUSION AND RECOMMENDATIONS The study investigated the determinants of food expenditure pattern among households in Oshodi-Isolo LGA, Lagos State. The study found that a larger percentage (40%) of the sampled respondents spent more than 20,000 as total monthly food expenditure. The study also found age, educational level and size of monthly income of the household head as the determinants of household monthly food expenditure in the study area. The study therefore recommends that household heads should be sensitized and enlightened on the need to make use of the various family planning units set up by the government to control the size of their households. Also, trainings should be organised through workshops and seminars on how the household heads can increase their income base through self-empowerment programmes so as to reduce dependence on governments. Lastly, policy that regulates the prices and quality of food in the urban areas should be put in place. ACKNOWLEDGEMENT The authors are grateful to Adeyemi Halimot and Onyekachi Daniel for their assistance during data collection. REFERENCES Adeniyi, O. R., Omitoyin, S. A. and Ojo, O. O. 20. Socio-economic determinants of consumption pattern of fish among households in Ibadan north local government area of Oyo state, Nigeria. African J of food Agriculture, Nutrition and Development. (5), 20 Adepoju, A. O. and Oyewole, O. O Households Perception and Willingness to Pay for Bread with Cassava Flour Inclusion in Osogbo Metropolis, Osun State, Nigeria Invited paper presented at the 4th International Conference of the African Association of Agricultural Economists, September 22-25, 2013, Hammamet, Tunisia Adewuyi, S. A., Mafimisebi, T. E. and Awe, P. O Food expenditure pattern among urban households in Ibadan South-West Local Government Area, Oyo State. ASSET Series C, 2(1): Babalola, D. A. and Isitor, S. U Analysis of the Determinants of Food Expenditure Patterns among Urban Households in Nigeria: Evidence from Lagos State. IOSR Journal of Agriculture and Veterinary Science (IOSR-JAVS), 7(5): Dankwa, K. B., Satorius, H. J., Zyl, V. J. and Kirsten, J. F Expenditure patterns of agricultural household in Lebowa and Venda: effect of farmers support programme on food security. Agrekon, 31(4): Gheblawi, S. M. and Sherin A. S Determination of factors affecting expenditures on three major food groups in Al-Ain, the United Arab Emirates (UAE), Emir. J. Food Agric. 19 (2): Iorlamen, T. R., Abu, G. A. and Lawal, W. L Assessment of Expenditure on Food among Urban Households And it s Implication For Food Security: Evidence From Benue State, Nigeria. African Journal of Food, Agriculture, Nutrition and Development, 14(2): Mhlongo, V. and Daniels, R. C Food expenditure patterns in South Africa: Evidence from the NIDS. Cape Town: SALDRU, University of Cape Town. SALDRU Working Paper Number 3/ NIDS Discussion Paper 2013/5: 1-24 Njimanted, G. F Econometric model of poverty in Cameroon: A system estimation approach. International Review of Business Research (2): Oladimeji, Y. U., Abdulsalam, Z., Damisa, M. A. and Omokore, D. F Analysis of Food Consumption Pattern among Rural Fishery Households: A Panacea to Poverty Alleviation in North Central Nigeria. Asian Journal of Agricultural Extension, Economics & Sociology, 6(2): Olayemi, J. K Principle of microeconomics for applied economic analysis. SICO Publisher, Ibadan, 2004, ISBN X Osinubi, T. S Urban Poverty in Nigeria: A case study of Agege area of Lagos State. Thirumarpan, K Determinants of Household Food Expenditure among Rural Households of Ampara District. Proceedings, 04 th International Symposium, SEUSL, Social Science and Humanities, Umeh, J. C. and Asogwa, B. C. 20. Determinants of farm household food expenditure: Implications for food security in rural Nigeria. International Conference on Ecology, Agriculture and Chemical Engineering (ICEACS'20) December 18-19, 20 Phuket (Thailand), NJAFE VOL. No. 2,