Demand for meat and dairy products by Turkish households: a Bayesian censored system approach

We extend the Tobit (censored) linear equation system procedure to utility‐theoretic demand functions, along with a mapping mechanism to impose the adding‐up restriction implied by consumer utility maximization theory—a theoretical restriction very often ignored in previous empirical studies with censored demand systems. In this context, the Bayesian Markov Chain Monte Carlo (MCMC) procedure is applied to the censored linear approximate almost ideal demand system (LAIDS) for 12 food products, using data from the Turkish Household Expenditure Survey. All own‐price elasticities are negative and expenditure elasticities positive. Uncompensated own‐price elasticities for rural households are generally much higher than those for their urban peers, though demand for most food products are own‐price elastic for both types of households. The differential patterns in demand elasticities between urban and rural households become even more evident (almost twice) as relatively more expensive foodstuffs are consumed, showing that accessibilities to alternative products have made rural Turkish households more cognizant toward price changes in foods. Household characteristics play a key role in food expenditures, notably so in urban areas, and regional and seasonal differences are also present.     

The Dynamics of Individuals' Fat Consumption

Consumers are increasingly aware of the link between their lifestyle choices and the risk of noncommunicable diseases. A dynamic approach incorporating this linkage in food demand is developed, where consumers maximize utility over time by choosing fat intake to control their cumulative fat level. The resulting dynamic indirect utility function and household data on meat, fish, and dairy consumption are used to estimate a censored demand system. Results show that consumers consciously adjust, but not instantaneously, their cumulative fat level. Highly educated households have a faster rate of adjustment of cumulative fat. When cumulative fat level increases, consumers shift to dairy or white meat from red meat products.     

The Demand for Organic and Conventional Produce in London,UK: A System Approach

The majority of studies on consumer demand for organic products neglect the presence of non‐organic competitors, ignoring their effect on consumer demand for organics. This article uses a demand system which includes both organic and non‐organic fruits and vegetables, with actual (as opposed to stated) data for household purchases. Estimation of our model provides empirical evidence on the interrelationships between organic and non‐organic products, as the relevant cross‐price elasticities. Own‐price elasticities indicate that organic fruits and vegetables are more price elastic than their non‐organic counterparts, and that lower social class households with children have the most own‐price elastic demand. Cross‐price elasticities indicate relatively strong loyalty to organic products.     

Quantity and quality effects of advertising: a demand system approach

Quantity and quality effects of advertising are investigated in this article. A censored demand system is estimated for fish, beef, pork, and other meats using Norwegian household data. In the demand model, generic fish advertising and meat advertising is introduced as demand shifters, and at the same time unit values are treated as endogenous. The unit values capture the quality of the commodities. Empirical findings show that advertising can have both quantity and quality effects on household demand.     

At‐home meat consumption in China: an empirical study*

The remarkable economic changes occurring within China since 1978 have resulted in a striking alteration in food consumption patterns, and one marked change is the increasing consumption of meat. Given China’s large population, a small percentage change in per capita meat consumption could lead to a dramatic impact on the production and trade of agricultural products. Such changes have major implications for policy makers and food marketers. This paper concentrates on meat consumption patterns in the home in China. A censored linear approximate almost ideal demand system model was employed in the study, and major economic parameters were estimated for different meat items. Data used in this study were collected from two separate consumer surveys – one urban and one rural in 2005.     

Estimation of Censored Demand Equations from Large Cross-Section Data

The article develops an alternative econometric methodology to estimate a system of censored demand equations using a large cross-section data from Colombian urban households. The approach preserves the behavioral information expressed by zero expenditures and conforms with the requirements imposed by consumer theory in a way consistent with the random utility hypothesis. We motivate the choice of the Tobit model as a statistical representation of consumer behavior and introduce the methodology by specifying the AIDS model modified according to both a translating and scaling demographic transformation. We propose to estimate each demand equation in unrestricted form using the jackknife technique. We then recover the demand parameters imposing the cross-equations restrictions by using minimum distance estimation. The empirical results of the censored demand system for specific households of policy relevance are reported.     

A cross-section analysis of household demand for food and nutrients in Tanzania

Undernutrition and malnutrition are still problems of unacceptable proportions in many developing countries. However, the debate on the roles of income and other socio-economic variables such as women’s education and household size on food and nutrient demand continues. This study examines the demand for food and nutrients amongst households in Tanzania, using recent survey data. A quadratic almost ideal demand system (QUAIDS) is employed to estimate price and expenditure elasticities, as well as the impact of socio-economic variables on food demand patterns. A moment-based instrumental variable approach is then used to analyse the determinants of nutrient demand. The results show that income and other socio-economic variables exert significant effects on the demand for food and nutrients. The estimated expenditure elasticities for the nutrients range from 0.307 for iron to 1.26 for Vitamin B₁₂. The elasticities are higher for those micronutrients that are consumed through animal products and lower for those micronutrients that are mainly obtained through staple foods. These results reflect the higher expenditure elasticities for meat, fish, eggs, milk, and milk products, as well as fruits and vegetables, relative to cereals and pulses, reinforcing the assertion that the demand for Vitamins A and B₁₂, as well as calcium and zinc will increase with rising income.     

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.     

Food Demand in Russia: Heterogeneous Consumer Segments over Time

The Russian food system has undergone substantial changes. However, knowledge on how economic transition has affected the structural parameters of food demand is lacking. Based on a two‐stage LES‐LA/AIDS model and annual panel data from the Russia Longitudinal Monitoring Survey (1995–2010), we provide a comprehensive set of food demand elasticities for Russia along two dimensions. First, we estimate demand parameters for three characteristic time periods in order to trace changes during transition. Second, to account for the Russian population's diversity, we derive elasticities for five different consumer segments. These groups are established by a cluster analysis based on households' food purchases. Our findings suggest that demand for food is far from satiated in Russia. We find generally high unconditional expenditure and own‐price elasticities for food. Both expenditure and own‐price elasticities show slight decreases in absolute terms over time. Low expenditure elasticities for staple foods like bread or cereals and high values for luxury goods such as meat, alcohol and tobacco suggest considerable changes in the composition of food baskets with further income growth. Results indicate that food production at home loses in importance while more affluent households in particular increase their demand for food consumption away from home.     

Consumer Demand For Butter, Margarine and Blends: The Role of Purchase and Household Characteristics

A U.S. household panel is used to estimate a model of household purchases of butter, margarine and butter/margarine blends. The econometric model accounts for the discrete purchase decisions process and the censored nature of disaggregated commodity demand. Observed market prices are "quality" adjusted for the three commodities investigated based on household and purchase characteristics. Over 90% of the reaction to a price change is found to occur with respect to the decision whether or not to consume.     

Incorporating nutrients into meat demand analysis using household budgets data

The objective of this article is to analyze the Spanish demand for meat, taking into account the consumer's concern about the relationship between food diet and health. This concern is forcing food demand analysts to assume that consumer utility is a function of nutrients instead of simply the food products themselves. Nevertheless, these utility function arguments are not produced in the marketplace but rather at home. As a consequence, in this article household production theory is followed in order to analyze Spanish demand for meat using the Quarterly National Expenditure Survey for 1999. Demands for several meat products (the input in the model) are derived from the translog cost function. Censored regression models are used in the estimation process, since many zero responses are reported. Five broad categories, eight nutrients, and the most relevant socioeconomic variables are considered. Finally, a set of elasticities is calculated with respect to all the variables included in the analysis.     

A MODEL OF THE DISAGGREGATED DEMAND FOR MEAT IN AUSTRALIA

The focus of this study is the estimation of the Australian demand for meat between 1967 and 1990, employing a demand systems approach which uses the linear approximate, almost ideal demand system (LA/AIDS) model. Two demand systems are estimated by maximum likelihood methods, one for aggregate types of meat and one for disaggregated meat products. After correcting for serial correlation in the two demand systems, restrictions from utility theory are imposed and tested for their appropriateness. By using a new data set on the Australian retail price and consumption offresh pork, ham and bacon, the results from the disaggregated model provide the first estimates of the own-price, cross-price and expenditure elasticities for these commodities.     

Food Demand in Mexico: An Application of the Amemiya-Tobin Approach to the Estimation of a Censored Food System

The modeling of micro-level food demand patterns requires not only allowing for household heterogeneity, but also addressing the problem of censoring. In this article, we present a variation of the Amemiya-Tobin framework for estimating a censored demand system that allows for household heterogeneity. The unique aspect of our approach is the use of a procedure that ensures the adding up of both latent and observed expenditure shares and also imposes expenditure share nonnegativity. This system is applied to an analysis of food demand based on a random sample of urban Mexican households.     

Price and quantity endogeneity in demand analysis: evidence from directed acyclic graphs

We propose to use the emerging method of directed graphs to study price/quantity endogeneity issues in empirical demand analysis. The approach is illustrated through the examination of U.S. meat consumption. We find that for two major meat products (beef and poultry), retail prices contemporaneously caused quantities consumed, thus were predetermined. In contrast, the quantity consumed of pork appeared to be predetermined relative to its price.     

The wealth of nature: economics as if survival mattered

Livestock play a key role in the lives of poor, rural people in developing countries, providing a major proportion of their cash income, capital assets, draught power, fuel and fertilizer. Rapid growth in demand for meat and dairy products in Asia presents both opportunities and challenges for livestock development and poverty alleviation. This paper explores the potential of livestock intensification to benefit the livelihoods of upland households and meet market demand in the Lao Peoples' Democratic Republic (Lao PDR), a South East Asian country undergoing significant economic change.

A review of the livestock sector in Asia shows increasing demand for live animals and meat in neighbouring Vietnam, Thailand and China. Lao PDR is well positioned to capitalize on the growing Asian livestock sector, however the extent livestock production in Lao PDR can reduce poverty, meet growing domestic meat demand and lift livestock exports is problematic. Findings from research in two upland northern provinces demonstrate how the introduction of forages for livestock has revolutionized the lives of some farmers and villages, but concludes that strategies are still needed to engage poorer households. The impacts of changing domestic and export markets are less certain, and are discussed within the context of environmental and public health, cultural traditions, economic development and sustainable livelihoods.     

Household behavior with respect to meat consumption in the presence of BSE and CWD

In this study, Canadian household meat consumption behavior in exotic (deer and elk meat) and traditional meats (beef, pork, chicken, turkey, bison, and seafood) is examined. This research introduces some differences in public response to transmissible spongiform encephalopathies (TSE) risks across consumer segments from different sources of meat supply, including hunted meat. The analysis uses a combination of survey and household meat purchase data that include a balanced household panel of 2,393 households per year across time. A two-step estimation procedure is used with a probit model in the first step (consume or not) and a doublelog–translog two-stage demand system in the second step (level of consumption). It is assumed and tested that household sociodemographics, consumers’ risk perceptions/attitudes, and media coverage of bovine spongiform encephalopathy (BSE) and chronic wasting disease (CWD) are underlying demand shifters in consumers’ daily meat purchase decision. The results suggest that households who obtain venison from hunting show the highest confidence in venison safety. Exotic meat preferences negatively affect traditional meat consumption in the daily diets of households who purchase traditional meats from stores and obtain venison from hunting. In response to the media coverage of BSE and CWD, exotic meat eaters are less sensitive to animal disease media information than the general population.     

Coupon Redemption and Its Effect on Household Cheese Purchases

By endogenizing unit value and coupon redemption, we estimate U.S. household cheese purchase, quality choice, and coupon redemption equations simultaneously. Zero purchases and missing values on coupons and unit values are taken into account in the model to correct for selectivity bias. Correlations among the three equations are found to be significant. Empirical findings show that high-quality choice significantly decreases cheese purchases, while cheese coupon usage significantly increases purchases. We find that higher income households select higher quality cheese, while larger households choose lower quality cheese. For coupon redemption, we find that African-American and Hispanic households redeem less, while Asian households have no significant difference compared to Caucasian households.     

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.     

Animal Welfare and Eggs – Cheap Talk or Money on the Counter?

Our estimate revealed willingness to pay for animal welfare using a panel mixed logit model. We utilise a unique household level panel, combining real purchases with survey data on perceived public and private good attributes of different types of eggs. We estimate willingness to pay for organic eggs controlling for trust in a positive connection between the public good animal welfare and the organic label and the private good food safety also connected to the label. Our results suggest that in the real world, animal welfare plays a minor role in the demand for agricultural products.     

Quasi‐maximum likelihood estimation of a censored equation system with a copula approach: meat consumption by U.S. individuals

A copula approach to censored system estimation is proposed. The quasi‐maximum likelihood estimator departs from the multivariate normal error distribution predominantly used in existing estimators and resolves the computational difficulty with multiple probability integrals in high‐dimensional censored systems. An application to individual meat consumption demonstrates that the procedure produces very different empirical estimates from existing Gaussian full‐information and quasi‐maximum likelihood estimates.