A Linearized Almost Ideal Demand System (LA/AIDS) Estimation of the Demand for Meat in South Africa

Abstract

A linear approximated Almost Ideal Demand System (LA/AIDS), estimated in first differences, were used to estimate the demand relations for meat (beef, chicken, pork and mutton) in South Africa from 1970 2000. Two tests for weak separability, including an F and Likelihood ratio version, failed to reject the null hypothesis of weak seperability, confirming that the four meat products are separable, and should be modelled together. According to the Hausman exogeneity test, the expenditure term in the South African meat demand model is exogenous. As a result, a Restricted Seemingly Unrelated Regression (RSUR) was used to estimate the model, whereafter the estimated parameters were used to estimate compensated, uncompensated and expenditure elasticities.Consumer/Household Economics,