Scholarly Journal of Agricultural Science Vol. 6(1), pp. 25-31 January, 2016
Available online at http:// www.scholarly-journals.com/SJAS
ISSN 2276-7118 © 2016 Scholarly-Journals
CONSUMER’S UTILITY CHANGES FROM RURAL EXODUS IN CAMEROON
Achille Jean Jaza Folefack
Department of Agricultural Economics, University of Dschang, Cameroon P.O. Box 31535 Yaoundé, Cameroon E-mail: firstname.lastname@example.org.
Using a Computable General Equilibrium (CGE) model of Cameroon, this paper assesses the demand for the locally manufactured goods and their imported imperfect substitutes as large number of people migrates from villages to cities. The urban consumer’s utility is measured through an Armington utility function which evaluates the changes or substitution between locally manufactured and imported goods of each sector. Three cases arise from analyzing the results of all 10 tradable sectors: (1) the situation where the urban consumer enjoys lower utility and private consumption due to a simultaneous decline in both the demand in import and locally manufactured goods in the sectors of food crops, cash crops and food processing; (2) the case where the urban consumer maintains the same utility and private consumption as observed in the sectors of consumer goods, intermediate goods, capital goods and private services where a drop in import’s demand is compensated by an increase of demand of locally manufactured goods; (3) the case where the urban consumer enjoys higher utility and private consumption as observed in the sectors of forestry, cement & base metals and construction where both locally manufactured and imported goods are increasingly demanded. The difference of labour production elasticities in rural areas compared to the cities explain the results obtained from each case. In conclusion, the paper recommends to the government authorities to electrify and facilitate the availability of other goods’ types in the rural areas so as to encourage the rural population to stay in villages and enjoy the same utility like the urban residents.
Key words: Rural exodus, CGE model, consumer’s utility, Armington function, substitution.