Evaluating Qatar's Food Import Demand Elasticities Pre- and Post-Blockade: Policy Implications for Food Security

This study estimates Qatar's food import demand elasticities, focusing on the period before and after the 2017 blockade. A rigorous econometric approach was employed to select the most suitable model for coefficient estimation, considering Pooled Ordinary Least Squares (POLS), Fixed Effects (FE), and Random Effects (RE) models. The Breusch-Pagan LM test was used to determine whether a homogenous (POLS) or heterogeneous (FE and RE) model was more appropriate. The Hausman test was conducted to differentiate between FE and RE models, with results supporting the use of the RE model due to the lack of correlation between individual effects and independent variables.

Our analysis revealed significant findings regarding the price and income elasticities of food imports in Qatar. A 1% increase in real GDP leads to a 5% increase in the quantity of imported food, indicating a strong income effect. The overall price elasticity of food imports is 0.7, highlighting the inelastic nature of food import demand and Qatar's dependency on imports for its food sector. For specific food categories, the import price elasticity for fish is 1.1, indicating that a 1% increase in fish prices results in a 1.1% decrease in the quantity imported. This suggests a moderately elastic demand, where price changes can significantly impact the import quantity. Dairy products have an elasticity of 0.91, showing relatively inelastic demand with a 1% price increase leading to a 0.91% decrease in import quantity. Vegetables exhibit an elasticity of 0.73, indicating inelastic demand, where a 1% price increase results in a 0.73% decrease in imports. Fruits have an even lower elasticity of 0.63, reflecting very inelastic demand, with a 1% price increase causing only a 0.63% reduction in imports.

These initial findings provide valuable insights for policymakers in enhancing Qatar's food security and reducing vulnerability to external shocks by diversifying import sources and investing in domestic agricultural capabilities.