Despite the government interventions to reduce fluctuations of agricultural food prices to improve consumer household welfare in Kenya, price variability of the selected agricultural cereal commodities has continued to have more substantial impact on household food expenditure especially among the poor households. This study sought to determine consumer responsiveness to price fluctuations of selected agricultural cereal commodities in Kenya. A rise in food prices negatively impact income-poor households. Nonetheless, there is scarcity of empirical evidence regarding the impact of a rise in staple cereals (rice, maize, wheat, and beans) prices on household food demand considering zero expenditure values. In this paper, we use 2015/2016 Kenya Integrated Household Budget Survey dataset and a zero-adjusted Quadratic Almost Ideal Demand System to bridge this literature gap. The sample consists of 24,778 households, subdivided into rural and urban households in 47 counties. The results showed that Kenyan households spent roughly KES 768 on maize compared to other staple foods. Secondly, we showed that staple cereals (rice, maize, wheat, and beans) contributed about 27 percent (%) to household food expenditures. Furthermore, we found that price elasticities for rice, wheat, and beans are greater than unity in absolute terms. Compared to urban households, rural households reported higher price elasticities for rice and wheat. Finally, staple cereals showed positive trend in spending patterns suggesting that they are normal goods.

Keywords: Elasticity, Consumer demand, Quadratic Almost Ideal Demand System, Staple cereals, Integrated household budget survey