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Demand for beef in Malaysia: Quality or Quantity?

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  • Tey, (John) Yeong-Sheng
  • Shamsudin, Mad Nasir
  • Mohamed, Zainalabidin
  • Abdullah, Amin Mahir
  • Radam, Alias

Abstract

With Malaysian government plan to increase production of beef and open the beef market to more abattoirs from other countries, domestic beef market has become more challenging. The domestic beef market is postulated to be available in a variety of qualities in future. Consumers do not only make decisions on how much to purchase but also at what qualities. This study is to analyze consumer evaluation of quality and quantity on demand for beef in Malaysia. A demand model incorporated consumer socio-economic variables and another applied demand analysis incorporated quality variable are estimated via two-stage least squares. Beef demand elasticities are estimated in the first demand model and a quality elasticity of demand for beef is estimated in the second applied demand analysis. The models are applied to a cross-sectional data set from Household Expenditure Survey 2004/2005. The results indicate that beef demand is inelastic to meat expenditure and to its own price. On another side, the results also indicate that beef demand is inelastic to quality. The elasticities in this study suggest that consumers substitute quantity for quality in demand for beef in Malaysia.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 15035.

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Date of creation: 23 May 2008
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Handle: RePEc:pra:mprapa:15035

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Keywords: beef; quality; quantity; demand elasticity; quality elasticity;

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  1. L. Wade, 1988. "Review," Public Choice, Springer, Springer, vol. 58(1), pages 99-100, July.
  2. Jeffrey T. LaFrance, 1986. "The Structure of Constant Elasticity Demand Models," Development Research Unit Working Paper Series, Monash University, Department of Economics archive-28, Monash University, Department of Economics.
  3. Unnevehr, Laurian J. & Bard, Sharon K., 1993. "Beef Quality: Will Consumers Pay For Less Fat?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, Western Agricultural Economics Association, vol. 18(02), December.
  4. Capps, Oral, Jr. & Schmitz, John D., 1991. "A Recognition Of Health And Nutrition Factors In Food Demand Analysis," Western Journal of Agricultural Economics, Western Agricultural Economics Association, Western Agricultural Economics Association, vol. 16(01), July.
  5. Chalfant, James A & Alston, Julian M, 1988. "Accounting for Changes in Tastes," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 96(2), pages 391-410, April.
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Cited by:
  1. Tey, (John) Yeong-Sheng & Mohamed Arshad, Fatimah & Shamsudin, Mad Nasir & Mohamed, Zainalabidin & Radam, Alias, 2008. "Demand for meat quantitu and quality in Malaysia: Implications to Australia," MPRA Paper 15032, University Library of Munich, Germany.

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