Impact of Price Increase of Rice on Household Expenditure in Bangladesh:

A case study of Dhaka city

Abstract

Bangladeshis’ are now finding it difficult to survive with their income-level which is grossly mismatching the prices of basic necessities, particularly rice, the staple food. The principal objective of this study is to assess the impacts of price increase of rice on household expenditures of middle-income families in some selected areas of Dhaka City. The study used the linear regression where average price of rice per KG has been considered to be an independent variable and the total monthly consumption and expenditure on Rice, monthly expenditure on Vegetables, Meat, Pulse, Atta, Clothes, Conveyance, House Rent and monthly Savings has been considered as dependent variables. The study shows that, the impact of price increase of rice has substantially influenced the family expenditure on the above mentioned food and non-food items. The variation of family expenditure due to price increase ranges from 7% to 43% over the years. As the monthly family expenditure has shot up during 2006-2008, the households are facing significant strain on their family budget and their extent of savings substantially diminished in the relevant period. In this perspective the study highlighted some measures to overcome the present hardship of the households.