ABSTRACT
In recent literature regarding empirical analysis of consumer behavior, the use of micro-data prevails in both developed and developing countries, applying not only parametric but also nonparametric approaches. In the present chapter, people report a variety of empirical findings using micro-data in Tanzania and applying nonparametric and parametric approaches. The tendency of the Engel curve in Tanzania is different from that found in developed countries. How can people explain this variation that the food category is classified as luxury goods in very poor households, while it is classified as necessary goods in poor and non-poor households. This empirical analysis clarifies the utility of measuring household demand and price elasticities for basic necessities in order to improve programs targeting poor households. Turning to the original problem that certain food items are classified as luxury goods in the very poor households while being classified as necessities in the poor and non-poor households in Tanzania.
