Testing for Structural Change in Australian Meat Demand

The Almost Ideal Demand System (AIDS) and Rotterdam models were used to test for the existence of structural change in Australian per capita consumption data on meats (beef, lamb, pigmeat and chicken) for the period 1965:1 to 1992:4. The models were estimated in single equation as well as in nonlinear system of equation versions. Both models showed the presence of structural change with the AIDS model producing more consistent results. The changes occurred in the early 1970s for beef, lamb and pigmeat and in the early 1980s for chicken. However, the effects of the changes were very small with only a 2.44 percent drop in expenditure share of beef, a 2.96 percent drop in lamb, a 0.71 percent increase in pigmeat and a 2.45 percent increase in chicken over the period of time assuming prices and expenditure held constant. These facts support the results of previous studies where the main determinant in quantity of meat demanded are changes in prices and total expenditure. Because of high collinearity of the data, the LA/AIDS model generated similar estimated elasticities to the 'true' AIDS model and due to the similarity of their right hand sides the first-differenced LA/AIDS model estimated similar elasticities to the Rotterdam model. This study also reveals that based on a test developed by Alston and Chalfant (1993) Australian per capita consumption data on meat rejects the Rotterdam model in favour of the AIDS model

The Demand for Beef in Indonesia: Implications for Australian Agribusiness

Meat consumption and socio-demographic data from the 1990, 1993 and 1996 SUSENAS Household Food Expenditure and Consumption Surveys were employed to estimate the demand for meats in Indonesia. The focus was on the Provinces of DKI Jakarta and West Java where about one-fourth of the Indonesian population reside. Statistical and econometric procedures were used to aggregate the 16 meat types recorded in the SUSENAS into four Meat Groups. They were then used to estimate the Linear Approximation of the Almost Ideal Demand System (LA/AIDS) model, taking into account zero observations and the restrictions on budget shares. The demand for Meat Group 1 (with the dominant meat, beef) is income-inelastic, whereas for Meat Group 2 (with the dominant meat, commercial and native chicken) it is income-elastic. These two groups comprise nearly 95 per cent of all meat purchases. The estimated own-price elasticity of the beef group is -0.92, while that for the chicken group is -1.09. The cross-price elasticities indicate that all the meat groups are substitute goods, as expected. The results suggest that the current focus of the Indonesian government on strengthening the domestic poultry industry is well placed, as the demand for chicken is likely to respond more quickly to income growth than the demand for beef. Further, consumers seem more likely to adapt their chicken consumption patterns to price changes than they do for beef. However, these differences are relatively minor and there is still a major opportunity for Australian agribusiness firms in the cattle and beef sectors to take advantage of the projected rapid growth in Indonesian beef demand.beef demand, almost ideal demand system, commodity aggregation, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Livestock Production/Industries,

The Demand for Beef in Indonesia: Implications for Australian Agribusiness

Meat consumption, expenditure and socio-demographic data from the 1990, 1993 and 1996 SUSENAS Household Food Expenditure and Consumption Surveys were employed to estimate the demand for meats in Indonesia. The focus was on the Provinces of DKI Jakarta and West Java where about one-fourth of the Indonesian population reside. Statistical and econometric procedures were used to aggregate the 16 meat types recorded in the SUSENAS into four meat groups. They were then used to estimate the Linear Approximation of the Almost Ideal Demand System (LA/AIDS) model, taking into account zero observations and the restriction that budget shares must lie between zero and unity. The demand for Meat Group 1 (dominated by beef) is income-inelastic, whereas that for Meat Group 2 (dominated by commercial and native chicken) is income-elastic. These two groups comprise nearly 95 per cent of all meat purchases. The estimated own-price elasticity of the beef group is -0.92, while that for the chicken group is -1.09. The cross-price elasticities indicate that all the meat groups are substitute goods, as expected. The results suggest that the current focus of the Indonesian government on strengthening the domestic poultry industry is well placed, as the demand for chicken is likely to respond more quickly to income growth than the demand for beef. Further, consumers seem more likely to adapt their consumption patterns to chicken price changes than they will for beef price changes. However, these differences are relatively minor and there is still a major opportunity for Australian agribusiness firms in the cattle and beef sectors to take advantage of the projected rapid growth in Indonesian beef demand

The Demand for Beef in Indonesia: Implications for Australian Agribusiness

Meat consumption, expenditure and socio-demographic data from the 1990, 1993 and 1996 SUSENAS Household Food Expenditure and Consumption Surveys were employed to estimate the demand for meats in Indonesia. The focus was on the Provinces of DKI Jakarta and West Java where about one-fourth of the Indonesian population reside. Statistical and econometric procedures were used to aggregate the 16 meat types recorded in the SUSENAS into four meat groups. They were then used to estimate the Linear Approximation of the Almost Ideal Demand System (LA/AIDS) model, taking into account zero observations and the restriction that budget shares must lie between zero and unity. The demand for Meat Group 1 (dominated by beef) is income-inelastic, whereas that for Meat Group 2 (dominated by commercial and native chicken) is income-elastic. These two groups comprise nearly 95 per cent of all meat purchases. The estimated own-price elasticity of the beef group is -0.92, while that for the chicken group is -1.09. The cross-price elasticities indicate that all the meat groups are substitute goods, as expected. The results suggest that the current focus of the Indonesian government on strengthening the domestic poultry industry is well placed, as the demand for chicken is likely to respond more quickly to income growth than the demand for beef. Further, consumers seem more likely to adapt their consumption patterns to chicken price changes than they will for beef price changes. However, these differences are relatively minor and there is still a major opportunity for Australian agribusiness firms in the cattle and beef sectors to take advantage of the projected rapid growth in Indonesian beef deman

The Demand for Beef in Indonesia: Implications for Australian Agribusiness

Meat consumption and socio-demographic data from the 1990, 1993 and 1996 SUSENAS Household Food Expenditure and Consumption Surveys were employed to estimate the demand for meats in Indonesia. The focus was on the Provinces of DKI Jakarta and West Java where about one-fourth of the Indonesian population reside. Statistical and econometric procedures were used to aggregate the 16 meat types recorded in the SUSENAS into four Meat Groups. They were then used to estimate the Linear Approximation of the Almost Ideal Demand System (LA/AIDS) model, taking into account zero observations and the restrictions on budget shares. The demand for Meat Group 1 (with the dominant meat, beef) is income-inelastic, whereas for Meat Group 2 (with the dominant meat, commercial and native chicken) it is income elastic. These two groups comprise nearly 95 per cent of all meat purchases. The estimated own-price elasticity of the beef group is -0.92, while that for the chicken group is -1.09. The cross-price elasticities indicate that all the meat groups are substitute goods, as expected. The results suggest that the current focus of the Indonesian government on strengthening the domestic poultry industry is well placed, as the demand for chicken is likely to respond more quickly to income growth than the demand for beef. Further, consumers seem more likely to adapt their chicken consumption patterns to price changes than they do for beef. However, these differences are relatively minor and there is still a major opportunity for Australian agribusiness firms in the cattle and beef sectors to take advantage of the projected rapid growth in Indonesian beef demand

The Demand for Meats in Indonesia: A Censored Regression Approach

In this study, meat consumption and socio-demographic data from the 1990, 1993 and 1996 SUSENAS Household Food Expenditure and Consumption Surveys were employed to estimate the demand for meats in Indonesia. The provinces of DKI Jakarta and West Java were chosen as the areas of study because of the population, level of meat consumption and the availability and quality of information in these two provinces. Several statistical and econometric procedures were performed. Firstly, a cluster analysis (Nicol, 1991) was used to aggregate the 16 meat types recorded in the SUSENAS into four Meat Groups (MG-1, 2, 3 and 4). Secondly, a double truncation procedure was used to estimate the linear approximation of the Almost Ideal Demand System (LA/AIDS) because of the large number of zero observations in the data as well as the fact that budget shares lie between zero and one. It is expected that the results of the study are more robust than previous censored regression approaches which only considered one-sided truncation at zero. The estimated expenditure elasticities show that MG-1 (with the dominant meat, beef) and MG-3 (with the dominant meat, untrimmed bones) are income-inelastic, whereas MG-2 (with the dominant meat, commercial and native chicken) and MG-4 (with the dominant meat, beef liver) are income-elastic. The estimated uncompensated own-price elasticities are negative, as suggested by economic theory. The estimated own-price elasticity of MG- 1 is -0.92, therefore, it is inelastic whereas MG-2, 3, and 4 have elastic estimated own price elasticities, -1.09, -1.16 and -1.03 respectively. The estimated uncompensated crossprice elasticities suggest that all the meat groups tend to be substitute goods as expected

The Demand for Beef in Indonesia: Implications for Australian Agribusiness

Meat consumption and socio-demographic data from the 1990, 1993 and 1996 SUSENAS Household Food Expenditure and Consumption Surveys were employed to estimate the demand for meats in Indonesia. The focus was on the Provinces of DKI Jakarta and West Java where about one-fourth of the Indonesian population reside. Statistical and econometric procedures were used to aggregate the 16 meat types recorded in the SUSENAS into four Meat Groups. They were then used to estimate the Linear Approximation of the Almost Ideal Demand System (LA/AIDS) model, taking into account zero observations and the restrictions on budget shares. The demand for Meat Group 1 (with the dominant meat, beef) is income-inelastic, whereas for Meat Group 2 (with the dominant meat, commercial and native chicken) it is income-elastic. These two groups comprise nearly 95 per cent of all meat purchases. The estimated own-price elasticity of the beef group is -0.92, while that for the chicken group is -1.09. The cross-price elasticities indicate that all the meat groups are substitute goods, as expected. The results suggest that the current focus of the Indonesian government on strengthening the domestic poultry industry is well placed, as the demand for chicken is likely to respond more quickly to income growth than the demand for beef. Further, consumers seem more likely to adapt their chicken consumption patterns to price changes than they do for beef. However, these differences are relatively minor and there is still a major opportunity for Australian agribusiness firms in the cattle and beef sectors to take advantage of the projected rapid growth in Indonesian beef demand