Demand for animal‐derived food in selected Asian countries: A system‐wide analysis

Food consumption patterns in Asia show a trend away from staples toward high protein food derived from animal and dairy products, fruit and vegetables, fats and oils. Such changes in food consumption patterns are due to rising incomes, urbanization, globalization, and modernization of marketing infrastructure. In this article, we analyze the demand for the animal‐derived food group comprising meat (chicken, beef, pork, and mutton), eggs and fish, and derive income and price elasticities in seven Asian countries using the system‐wide approach. Demand homogeneity and Slutsky symmetry properties were tested and found to be compatible with the data. Our findings reveal that animal‐derived food as a group is a necessity (except in Taiwan) and its demand is price inelastic (except in Taiwan and Sri Lanka). The implied unconditional demand elasticities reveal that, in all countries (except beef in Japan and Taiwan), chicken, beef, pork, mutton, eggs and fish (except in Taiwan) are all necessities and the demand for all types of animal‐derived food in all seven countries are mostly price inelastic. The cross‐price elasticity estimates are mostly found to be positive, meaning that there is a higher degree of substitutability between chicken, beef, pork, mutton, eggs, and fish.     

全面建成小康社会对农村居民肉类消费的影响——基于中国农村微观经济数据的实证研究

[目的]基于中国农村微观经济数据,分析全面建成小康社会对农村居民肉类消费的影响。[方法]文章运用恩格尔模型和考虑"零消费"问题的近乎理想需求系统模型(AIDS)的两阶段模型,对全国8个省份的农户数据进行实证分析。[结果]首先,肉类食品的需求收入弹性均为正值,农村居民肉类需求随着收入增长而增加。其次,肉类食品需求收入弹性存在差异,其中,禽肉收入弹性最大,牛羊肉收入弹性最小。再次,不考虑"零消费"问题时,牛羊肉的需求弹性被高估0.12～0.29,猪肉的需求弹性被高估0～0.02。最后,到达全面建成小康社会的标准时,目前低于收入标准的农村居民人均猪肉、禽肉和牛羊肉消费量将分别增加3.42kg、1.86kg和0.57kg,消费结构将进一步优化。[结论]全面建成小康社会将促进农村居民人均收入增长,进而扩大人均肉类消费量、优化肉类消费结构;农村家庭户主受教育程度与肉类消费具有正向相关关系。     

Impacts of Animal Well‐Being and Welfare Media on Meat Demand

This article provides the first known examination of how animal welfare information provided by media sources impacts beef, pork and poultry demand. Results suggest that media attention to animal welfare has a small, but statistically significant impact on meat demand. Long‐run pork and poultry demand are hampered by increasing media attention whereas beef demand is not directly impacted. Loss in consumer demand is found to come from exiting the meat complex rather than spilling over and enhancing demand of competing meats. An outline of economic implications is provided for the broader discussion of animal welfare.     

TESTING FOR CHANGES IN THE STRUCTURE OF THE DEMAND FOR MEAT IN AUSTRALIA

Quarterly data from 1962 to 1983 for beef, lamb, mutton, pig meat and poultry were used to test for constancy in the structure of meat demand in Australia. The cumulative sum, cumulative sum of squares and Farley-Hinich tests were applied to a range of models to ensure that any rejection of stability was not due to an inappropriate functional form or omitted dynamics. Little evidence was found of a marked swing away from consumption of any meat, with the exception of mutton. The results suggest that changes in prices and in total consumer expenditure are far more important than changes in tastes as determinants of meat consumption.     

THE DEMAND FOR MEAT — AN EXAMPLE OF AN INCOMPLETE COMMODITY DEMAND SYSTEM*

Equations describing the demand for beef and veal, mutton, lamb, pork and chicken are estimated using the full information maximum likelihood estimator. Elasticity estimates are presented and the double logarithmic model is compared with a demand system which is derived from the indirect translog utility function. Estimates of the direct price and income elasticities are not particularly sensitive to model specification but the estimated cross-price elasticities are sensitive to the choice of functional form. The results indicate that the double logarithmic specification may be less satisfactory than the alternative presented in cases where restrictions on the parameters are imposed during estimation.     

Estimates of Food Demand Elasticities for Great Britain: 1972–1994

This paper reports the results of the estimation of Almost Ideal Demand Systems (AIDS) for UK food demand using time series data from the National Food Survey. A Bayesian approach is used to impose curvature restrictions in the model. The aim is to obtain estimates of Hicksian, Marshallian and expenditure demand elasticities for UK food which are fully consistent with static optimisation by consumers. Overall, the results concur with expectations as aggregate food demand is both price and income inelastic and individual food categories are mostly price and income inelastic. The notable exception being meat, specifically pork, beef and chicken.     

Asymmetry in beef,lamb and pork farm-retail price transmission in Australia

The hypothesis of asymmetry in price transmission within the Australian meat market is tested using monthly data for beef, lamb and pork prices at different market levels over the period 1971–1988. The results indicate that asymmetrical price response is a strategy used by beef and lamb retailers and wholesalers to adjust to changing input prices, but not by pork retailers and wholesalers. This difference is perhaps unexpected given the similarity in behaviours relating to price levelling in this market, the high cross-price elasticities of demand between these meats, and the relatively greater degree of concentration in the pork market.     

Price volatility and rational expectations in a sectoral framework commodity model: a multivariate GARCH approach

This article explores supply response models in a rational expectations framework with endogenous risk by using a multivariate generalized autoregressive conditional heteroskedasticity model with Cholesky decomposition. This approach allows the incorporation of price volatility as a risk factor into the supply response of a primary commodity sector that is composed of several markets of homogenous products. The model is applied to the Greek meat sector, which is composed of four major meat categories, that is, beef, lamb, pork, and broiler, and thus the model for the entire market includes supply and demand equations for all the four meat markets, which are estimated simultaneously. The empirical results confirm that price volatility is a significant risk factor in Greek meat production and also provide useful implications about the cost factors of production. Furthermore, the empirical findings show that the last reform of the Common Agricultural Policy seems to have had a negative effect on beef and lamb production in Greece.     

Comparing heterogeneous consumption in U.S. and Japanese meat and fish demand

This article uses national, quarterly data to conduct an empirical analysis of pre‐committed meat and fish demand by U.S. and Japanese households using the generalized almost ideal demand system (GAIDS). Pre‐committed demand represents the component of demand that is insensitive to both income and price adjustments. U.S. consumers are found to hold significant positive pre‐committed demand for beef and pork, while Japanese consumers appear to possess significant, positive pre‐committed demand for beef and fish. This provides evidence to partially explain observed differences in Japanese and U.S. consumer reactions to nonprice and nonincome effects in beef, pork, poultry, and fish. In addition, based on in‐ and out‐of‐sample performance, the more general GAIDS is preferred to the almost ideal demand system (AIDS) for both the U.S. and Japanese demand systems. Results lend to improved demand modeling efforts and more complete understanding of true market forces at hand in meat and fish markets for these culturally diverse consumer groups.     

Analysis of household attitudes toward the purchase of livestock products and fish in Cameroon

The need for additional information on household demand for meat and fish in Cameroon is addressed. Probit analysis involving the Heckman selectivity correction procedure is used to estimate the effects of individual and household characteristics on demand for beef, chicken, pork and fish. Results indicate that fish is a relative necessity in Cameroon and is often substituted for beef and chicken by households whose profiles include being of low income levels, having large household sizes, are of middle age and are less educated. Whereas chicken and pork substitute each other, they are each complementary to beef. The profiles of households likely to purchase beef include being married, middle age, educated and of the Muslim faith. Profiles for households most likely to increase their purchases of chicken include being of high income levels and are public sector employed. Some policy implications are provided.     

非洲猪瘟疫情对我国肉类价格影响的区域异质性研究

目的 非洲猪瘟疫情暴发导致猪肉等畜产品市场供需结构性、区域性失衡，进而导致肉类价格大幅波动，不利于畜牧业高质量可持续发展。方法 文章通过构建覆盖全国30个省（市、区，不含港澳台、西藏），包括猪牛羊和白条鸡四大肉类价格和非洲猪瘟疫情指数的动态面板数据，运用面板向量自回归模型（PVAR），研究非洲猪瘟疫情对猪肉等主要肉类价格的冲击和影响在重点、约束、适度发展区和潜力增长区2的区域异质性。结果 （1）非洲猪瘟疫情对不同区域不同肉类价格的影响存在着正负向不趋同的方向性差异，在冲击程度大小和时滞期上均存区域异质性；（2）区域间和区域内不同省份间猪肉等肉类生产流通和供需形势、及非洲猪瘟发生发展程度的差异是非洲猪瘟疫情对这些肉类价格冲击影响异质性产生的主要原因。结论 非洲猪瘟疫情对肉类价格影响存在较为明显的区域异质性，亟需进一步优化生猪等畜牧产业布局，加快形成区域协同发展格局；健全动物疫病防控体系，建立多方协同联动机制；完善市场风险预警调控机制，加快实现产需顺畅匹配，确保畜产品市场总体平稳运行和畜牧业健康可持续发展。     

An Econometric Analysis of Total (Domestic) and Import Demand for Beef in Hong Kong

This paper presents an applied econometric analysis of total (domestic and import) demand for beef in Hong Kong for the period 1970 to 1988. The estimates are in logarithmic form and provide elasticity estimates for beef demand (domestic and import) in Hong Kong. Variables in the estimated domestic demand models (per capita and aggregate) include own price, prices of a substitute (pork) and a complement (rice) and income. Variables in the estimated import demand model include demand side variables (price of beef, price of pork, price of rice and income) and the price of imported live cattle as a supply shifting variable. The elasticities were inelastic for the domestic demand models while most of those for the import demand model were elastic.     

Effects of consumer cohorts and age on meat expenditures in the United States

Meat demand is likely influenced by the birth cohort and age of the individual. In this study, we examine the demand for beef, pork, poultry, and other meat in the United States using the 1984–2012 Consumer Expenditure Survey and the almost ideal demand system with the incorporation of age, period, and cohort (APC) effects. We find that the model with APC effects performs better than the models without APC effects. The results indicate that cohorts born in earlier time periods are expected to purchase significantly less poultry compared to cohorts born in later time periods, when they are measured at the same age. Over the life cycle, purchase of poultry is expected to increase with age while the opposite is true for red meat. We also find that the own-price elasticity for beef is highest among the products examined, while the own-price elasticity for other meat is lowest and the inclusion of APC effects increases the absolute value of the own-price elasticities for beef, pork, and poultry, but reduces the own-price elasticity for other meat. Our forecasts indicate that the aggregate poultry purchase will continue to increase until 2022, while the aggregate purchase of red meat will slightly increase until 2017, but will either decrease or stay at same level from year 2017 to 2022.     

MARKETING MARGINS IN THE MEAT SECTOR,ENGLAND AND WALES 1978–1987

The paper presents a basic analysis of price spread data for beef, lamb and pork over the period 1978 to 1987. The results are reviewed in the light of existing margin theory in order to assess how far the characteristics of price and margin behaviour today differ from those highlighted in earlier work. It is concluded that while short run behaviour is well explained, further research is required if we are to fully understand the factors influencing the longer term development of margins in the meat sector.     

On estimating Armington elasticities for Japan's meat imports

By fully accounting for the distinct tariff regimes levied on imported meat, we estimate substitution elasticities of Japan's two-stage import aggregation functions for beef, chicken and pork. Although the regression analysis crucially depends on the price that consumers face, the post-tariff price of imported meat depends not only on ad valorem duties but also on tariff rate quotas and gate price system regimes. The effective tariff rate is consequently evaluated by utilising monthly transaction data. To address potential endogeneity problems, we apply exchange rates that we believe to be independent of the demand shocks for imported meat. The panel nature of the data allows us to retrieve the first-stage aggregates via time dummy variables, free of demand shocks, to be used as part of the explanatory variable and as an instrument in the second-stage regression.     

QUARTERLY ESTIMATES OF THE DEMAND AND PRICE STRUCTURE FOR MEAT IN NEW SOUTH WALES

Multiple regression estimates of demand and price relationships for fresh beef, lamb and mutton in the N.S.W. livestock auction, wholesale, and retail markets during the period from January 1951 to June 1963 are presented. The results show that direct price elasticities of demand were negative, and of greatest absolute value in the retail market. Mutton is shown to have been a close substitute for beef and lamb, but the latter were not close substitutes with respect to price.     

A time series analysis of Danish markets for pork, chicken, and beef

We offer a first-time empirical depiction of Danish dynamic meat price/quantity transmissions by formulating, estimating, and testing a VAR model of market-clearing quantities and prices of the Danish pork, chicken, and beef markets. The analysis illuminates how these markets dynamically handle shocks, and it is demonstrated that: (i) the three meats are close substitutes; (ii) chicken and pork market shocks have own-market and cross-market effects that occur rapidly and swiftly, while beef market shocks have more enduring impacts on pork and chicken markets; (iii) prices are in general more endogenous than quantities; and (iv) the price of chicken is much more endogenous than the prices of pork and beef.     

Food scares, advertising, and the demand for meat cuts in Great Britain

Retail demand systems for 19 different cuts of meat for beef, lamb, pork, bacon and poultry in Great Britain are estimated from monthly time series of consumer expenditure from 1989-2000 using a two stage budget allocation process and an LA/AIDS specification. The unconditional expenditure, own and cross price elasticities are derived for the individual meat cuts. The impact of adverse publicity from meat scares, especially BSE, and of positive publicity through consumer promotion and advertising are incorporated into the modelling. Meat scares produced a reallocation of consumer spending from red to white meats during the 1990s. The impact of species-based advertising was shown to have complex spillover effects both within and between meat species, and the response of consumer demand to advertising was considerably less than to adverse publicity.     

Demand System Estimation with Upward-Sloping Supply

There are three important implications of this work. First, demand systems estimates that overlook supply response are as subject to simultaneous equations bias as single ad hoc demand equations. Theil shows theoretically that assuming supply curves are perfectly elastic, when in fact they are not will underestimate price responsiveness in demand equations. An empirical example is presented that demonstrates that the price elasticities generally increase when upward-sloping supplies are assumed.
Second, the iterative testing procedure presented may provide direction for model building when the true structure of the system is unknown. For example, the results of the Wu-Hausman test indicate that assuming chicken supply is perfectly elastic in a model of the Japanese livestock industry is justified. The results also indicate that the supplies of Wagyu beef, dairy beef, pork and fish are upward-sloping and therefore should be modeled as endogenous variables in the demand system.
Third, the results emphasize the sensitivity of projections of Japanese beef imports to the assumptions underlying the demand system. If perfectly elastic meat supplies are assumed for an analysis of reducing Japanese beef import liberalization, the results will likely underestimate the impacts on beef imports.
In summary, the supply curves for agricultural products tend to slope upward within the time periods used for traditional policy analysis and demand system estimation, which in turn implies that prices are determined endogenously within the system. Endogenous price determination is contrary to the assumptions that underlie the theoretical foundations and many empirical applications of demand systems. We present a methodology to test for and adjust demand systems for endogeneity. The importance of this adjustment is demonstrated by using an analysis of the liberalization of the Japanese beef market.     

SUPPLY RESPONSE IN THE AUSTRALIAN SHEEP INDUSTRY: A CASE FOR DISAGGREGATION AND DYNAMICS*

Microeconomic capital goods theory was utilised to provide a theoretical framework on which a dynamic econometric model was based. Econometric procedures were then employed in an analysis of sheep producers' decision making regarding the annual supplies of wool, lamb and mutton, and annual changes in the inventory levels of sheep, lambs and ewes maintained for breeding purposes. Estimates show that wool prices provide the long-run stimulus for increases and decreases in the sheep flock while mutton and lamb prices are responsible for short-run changes in flock composition. Substitution between sheep and beef cattle is of considerable importance although no significant substitution between sheep and cropping could be found. Seasonal conditions proved to be an important short-run supply shifter, affecting both numbers and composition of the sheep flock.