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The Demand for Meat: Conditional and Unconditional Elasticities

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  • Rickertsen, Kyrre

Abstract

The demand for meat and other foodstuffs is estimated as a part of a four-stage demand system. Correction formulae for price and expenditure elasticities are used to calculate unconditional elasticities by the use of the estimated conditional elasticities. A static specification is rejected at a 5 percent level for each sub-system and a dynamic specification is used to take account of habit formation in consumption. The unconditional own-price elasticities for beef, lamb, pork and chicken are calculated as - 0.48, --0.23, --0.66 and-1.14, respectively. The corresponding conditional elasticities are estimated to be - 0.59, --0.25, -0.78 and-1.15. The unconditional expenditure elasticities are calculated to be 0.72 for beef, 0.42 for lamb, 0.81 for pork and 1.00 for chicken. The corresponding conditional elasticities are estimated to be 0.98, 0.57, I.I I and 1.36. These results show the importance of correcting conditional elasticities before elasticities from different studies are compared or before the elasticities are used for policy purposes.

Suggested Citation

  • Rickertsen, Kyrre, 1997. "The Demand for Meat: Conditional and Unconditional Elasticities," 1997 Occasional Paper Series No. 7 198192, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaaeo7:198192
    DOI: 10.22004/ag.econ.198192
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    File URL: http://ageconsearch.umn.edu/record/198192/files/agecon-occpapers-1997-032_1_.pdf
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    References listed on IDEAS

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    1. Ray, Ranjan, 1985. "Specification and time series estimation of dynamic Gorman Polar Form demand systems," European Economic Review, Elsevier, vol. 27(3), pages 357-374.
    2. Mdafri, Abdellah & Wade Brorsen, B., 1993. "Demand for red meat, poultry, and fish in Morocco: an almost ideal demand system," Agricultural Economics, Blackwell, vol. 9(2), pages 155-163, August.
    3. Paul Cashin, 1991. "A Model Of The Disaggregated Demand For Meat In Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 35(3), pages 263-283, December.
    4. Gordon Anderson & Richard Blundell, 1983. "Testing Restrictions in a Flexible Dynamic Demand System: An Application to Consumers' Expenditure in Canada," Review of Economic Studies, Oxford University Press, vol. 50(3), pages 397-410.
    5. P. Y. Chen & M. M. Veeman, 1991. "An Almost Ideal Demand System Analysis for Meats with Habit Formation and Structural Change," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 39(2), pages 223-235, July.
    6. Burton, Michael & Young, Trevor, 1992. "The Structure of Changing Tastes for Meat and Fish in Great Britain," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 19(2), pages 165-180.
    7. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    8. Godfrey, Leslie G, 1978. "Testing against General Autoregressive and Moving Average Error Models When the Regressors Include Lagged Dependent Variables," Econometrica, Econometric Society, vol. 46(6), pages 1293-1301, November.
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