ABSTRACT

The study estimated the demand function as well as the relevant elasticities for cocoyam in Oru East Local Government area using the ordinary least square (OLS) criteria which is an econometric method. Relevant survey data were generated from 60 farmers over a period of time, selected using the simple random sampling technique. The regression results shows that price of cocoyam and income were the only significant variable that affects the demand for cocoyam. The income is negatively related to the demand for cocoyam while the price of cocoyam was positively related to the demand for cocoyam. The elasticity of demand for cocoyam with respect to price is 13.66 indicating an elastic demand for cocoyam. The cross price elasticity of demand for yam is 119.70, suggesting that the two commodities are substitutes. An infinitesimal increase in the price of cocoyam is likely to result in a large increase in the demand for yam. The cross price elasticity of demand for Cocoyarn is —1.607, Implies that Cocoyam is a complementary good. This implies that an increase in consumption of Cocoyam is likely to result in a large decrease in the consumption of yam. Also the income elasticity of demand is (-22. 28) being negative shows that cocoyam is an inferior good. The study suggest proper evaluation of impact of price and income changes not only on cocoyam but other cash and food crops as this will guide policy makers in formulating good farm and economic policies for economic development. 'p x cultivation has become very popular. This is true because large area of land are given to its cultivation, Eyo, et at, 2000). Cocoyam is a major food crop in Nigeria, especially in the Southern parts where it is cultivated extensively mainly for local consumption. It has been reported by (Irvine, 1969) to be third in importance as a staple root/tuber crop after yam and cassava in Nigeria (Irvine, 1969). Nigeria is the largest producer of cocoyam in the world with a production figure of about 1 .8m tonners per annum (Olayide et a!, 1972) 40% of the total production figure in the world. The production is carried out by mainly rural farmers. in Nigeria, Imo State is the major Cocoyam producing state (Knapschear and Wilson, 1980). Inspite of this position of Cocoyam in this country, detailed information on its where in the farming systems of Imo-state is rather scarcity, instead a drastic fall in its supply has been noticed in recent times. The concept of demand is very important in economic theory. It is also asserted that the majority of economic problems such as the drastic fall in the supply of cocoyam which we encounter in everyday life can be explained by a careful examination of the demand for and supply of the commodity.