Thesis, Undergraduate (BS in Agribusiness Economics)--University of the Philippines, Mindanao

Fruits have been one of the major crops that have high economic value. These fruits include banana, pineapple, mango and papaya. Among others there is a need to estimate their local or domestic demands since these are the common fruits in which Filipinos of all income class can afford to have or buy for their own. The study aimed to evaluate and model the aggregate demand for major fruits specifically, Lakatan banana, Carabao mango, papaya and pineapple using Almost Ideal Demand System with the aid of a panel data in all provinces of the Philippines. There were 44 provinces considered in this study and the time periods were limited to 2000 and 2009. The demand for fruits is primarily affected by prices of fruits, per capita consumption in kilogram per day of households and income. Ordinary Least Square (OLS) and Seemingly Unrelated Regression (SUR) are the two system methods used in modelling the demand for the four selected fruits using AIDS. Moreover, price elasticities show the relationship of the quantity demanded for individual fruits and prevailing prices as well as its relationship towards its closest substitutes while expenditure elasticity was also calculated in this study since theory suggests that when a certain commodity has an expenditure elasticity of greater than 1, it is said to have a market potential. As compared in the results from the OLS, all of the parameters that were generated in the SUR were all significant at 0.1 level of significance. Results suggests that Lakatan banana is becoming a necessity and is present in every dining tables of every Filipino while papaya is considered more of a Giffen good. Pineapple and Lakatan banana on the other hand, are closest substitutes of each other. Lakatan banana and Carabao mango are determined to have a market potential. The proponent of the study recommends the government and private sector should invest more on fruits that have market potentials to help improve the local industry of fresh fruits. Producers must think of better ways of minimizing their production cost for Carabao mango and pineaaple since these fruits are price responsive. Papaya is a Giffen and luxury good, thus, the private sector must set a premium price.