This study examined the roles of income, prices and household
demography in household demand for non-alcoholic beverages (NABs) in
two cities β Abeokuta and Ibadan in Southwest Nigeria. The study
was based on primary data obtained from a cross-section of 407
households (211 from Abeokuta and 198 from Ibadan) drawn by multistage
sampling technique across six Local Government Areas (LGAs) and 60
National Population Commission (NPC) enumeration areas (EAs). A
structured questionnaire was used to collect data on households NABs
expenditure, income, prices and other relevant socio-economic
variables. The data were analysed within the framework of a linear
approximation of an Almost Ideal Demand System. The study found that an
average household, consisting of five (5) members, expended an average
N5, 235.89 per month on NABs (approximately US34.21atN153.06/US1
exchange rate in 2010). The bulk (67%) of the NABs expenditures were
devoted to purchase of dairy products (36%) and cocoa-based products
used in preparing chocolate drinks (31%). The estimated income
elasticity of demand for the six categories of NABs studied were
positive while all the own price elasticity of demand were negative.
Demand for dairy products and cocoa based drinks were found to be price
elastic, while those of carbonated drinks, malt drinks, fruit juice and
other NABs were price inelastic. Increase in education of the household
heads was found to be associated with significant increase in the
budget shares of dairy products (p<0.01) and fruit juice
(p<0.10), but a significant reduction in budget shares of
cocoa-based products (p<0.05), carbonated drinks (p<0.01) and
malt drinks (p<0.05). The study concludes that policies aimed at
promoting increased demand and healthy choices of NABS must pay some
attention to raising real income and increasing level of education
among the citizenry. Profitability of business enterprises involved in
dairies and cocoa-based products would also be better enhanced if the
firms adopt cost saving strategies as against price hikes in a bid to
enhance performance