Introduction: Estimating demand functions is of great importance to understand consumer preferences and predict consumer needs for policy-making and planning. Due to the current economic situation in Iran and the decline in people's purchasing power, the need to examine the behavior and demand for household food is evident.
Materials and Methods: Based on the data review, this study categorized the required raw data into seven main commodity groups covering 19,511 households from the urban areas of Iran in 2022. The Working-Leser model and Rank-Three model functional forms were formulated and estimated using the Seemingly Unrelated Regressions (SUR) model econometric approach to achieve the concerned goal.
Results and Discussion: The study results showed that as the income class of households decreased, the share of the cost of oils and fats, sugar, and beverages increased, indicating a decrease in the purchasing power of households; also, self-price elasticity was negative according to theoretical foundations, meaning that as the price of each commodity increases, the demand decreases. In addition, the calculated expenditure elasticities of grain, milk and dairy, fruit and vegetable, and sugar groups were less than one, indicating the necessity of the food groups examined.
Conclusion and Suggestions: Therefore, it is suggested that the implementation of any policy affecting the prices of such basic and necessary goods should be accompanied by the policies related to the compensation of purchasing power for these products.