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Demand Equations For Selected South African Agricultural Commodities

Author

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  • Bowmaker, P. A.
  • Nieuwoudt, W. L.

Abstract

A set of demand equations for 18 South African agricultural products, representing three demand systems (red meats, fruits and vegetables), were estimated from monthly data for the period December 1982 to February 1988. Data were deflated with a commodity price index and natural logarithmic partial adjustment equations were estimated with two-stage least squares to determine demand parameters for each product. Theoretically expected results were obtained and, owing to variability in seasonal data, results were generally highly significant. Beef is confirmed as the dominant commodity in the red meat market, having cross-price flexibilities with mutton and pork of 0,30 and 0,20, respectively. All goods other than pumpkins are shown to be normal and fruits and vegetables (having many substitutes) are shown to be demand elastic. All products are normal goods, with the exception of pumpkins (income flexibility of -0,74), which are inferior. Apples and pineapples were found to be the dominant fruits and onions, tomatoes and cabbages had the most significant cross-price effects on the system of vegetable demand equations.

Suggested Citation

  • Bowmaker, P. A. & Nieuwoudt, W. L., 1990. "Demand Equations For Selected South African Agricultural Commodities," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 29(1), February.
    • Handle: RePEc:ags:agreko:267251
    DOI: 10.22004/ag.econ.267251
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    References listed on IDEAS

    as
    1. Waugh, Frederick V., 1964. "Demand and Price Analysis: Some Examples from Agriculture," Technical Bulletins 171213, United States Department of Agriculture, Economic Research Service.
    2. Ortmann, G. F., 1982. "Demand Analysis Of Vegetables And Subtropical Fruit In South Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 21(2), October.
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