A Study on Structural Change for Cereals Demand in Ghana

Abstract

The reason behind this research is to examine the effects of Ghana participation in free trade on the changes in consumer preference for imported cereals of maize, rice, wheat and sorghum. The research provided empirical estimates of the extent of sensitivity of cereals scale change in the Ghanaian economy to changes in quantity demanded. The analyses used an Inverse Almost Ideal Demand System (IAIDS) model to remedy the study objectives due to its appropriateness in modelling the level of utility for commodities with fixed or exogenously determined short run supply as a results of trade restriction. The critical finding of the study is that, Ghana practice of a liberalised policy could indirectly effected the country structural change in demand for imported cereals commodities under study but the direction of change is heterogeneous among the different cereals goods. Also, while Ghanaians demand for imported cereals is inflexible, price response to changes in the quantity of imported rice, wheat and sorghum is much sensitive compared to maize. It is recommended to implement long run policy of price control measures if the consumption and supply importation are to control in Ghana.