Estimation of meat demand system in Jordan: an almost ideal demand system

Abstract

This paper reports the results of the estimation of a linear approximate almost ideal demand system for Jordan meat demand using cross-sectional data collected by the Department of Statistics in Jordan as part of the household expenditure survey. A censored regression method for the system of equation is used to analyse the meat consumption patterns. This method allows for inclusion of a large number of zero consumption for some foods. Two-step demand system was estimated. In the first stage, Inverse Mill Ratio is estimated by using probit regression model. In the second stage, the estimated variable is included in the AIDS model to estimate food demand elasticities. The objective of this work is to provide econometric estimates of the different types of demand elasticities for meats in Jordan. To be consistent with the demand theory, the homogeneity, symmetry and adding up restrictions were satisfied in the estimated models. The estimated model was used to obtain estimates of Hicksian, Marshallian and expenditure demand elasticities for meats in Jordan. The results revealed that the demand for mutton and poultry is elastic while the demand for beef and fish is inelastic. The cross-price elasticities indicate that poultry and beef are substitutes to mutton. The expenditure elasticities confirm that beef and mutton are luxury goods while poultry and fish are necessity goods.

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

“…Because all meat expenditure shares add to one, a demand system composed of five individual expenditure share equations would be singular. Thus, one of the equations must be excluded to estimate the equation as a system (Hayes et al 1990;Heien and Wessells 1990;Jabarin 2005). In the present study, the 'pork-share equation' was chosen to be excluded in the estimation.…”

“…Therefore, the AIDS model has been chosen in the present study because of its theoretical and practical considerations, and popularity in demand analysis (Blanciforti and Green 1983;Fujii et al 1985;Fulponi 1989;Heien and Wessells 1990;Fan et al 1995;Huang 1999;Wu 1999;Ma et al 2004;Jabarin 2005;Gould and Villarreal 2006). In addition, the estimated coefficients in a linear approximate almost ideal demand system (LA-AIDS) are easy to interpret (Fulponi 1989;Jabarin 2005).…”

“…Although using Stone's price index has been found to affect the approximation properties of the model with changes in the units of measurement (Moschini 1995), in the present study, the usage of it has been found appropriate because of careful choice of unchanging units of measurement for prices and quantities. In addition, Zellner's (1962Zellner's ( , 1963 iterative seemingly unrelated regression (ITSUR) is used in this paper because it is usually regarded as a better tool to improve the efficiency of the estimates (Chalfant 1987;Heien and Wessells 1990;Shonkwiler and Yen 1999;Jabarin 2005). As in many other household consumption surveys, the collected data contain zero expenditures for some meat items.…”

“…In addition, most previous studies using micro-level survey data did not consider zero expenditure on some items (Fan et al 1995;Cai et al 1998;Ma et al 2004;Wang et al 2004Wang et al , 2005, which has been found to lead to bias in estimation (Haines et al 1988;Heien and Wessells 1990;Perali Figure 1 Meat consumption per capita in rural and urban China (1980 and2005). Note: meat consumption refers to the consumption of pork, poultry, beef and mutton.…”

Migration and Remittances Effects on Consumption of the Poorest: The Mexican Case

“…We develop the censored system of demands proposed by Shonkwiler and Yen (1999) (see also Heien and Wessells, 1990;Perali and Chavas, 2000;Lazaridis, 2003 andJabarin, 2005). The intrinsic assumption is that a selection mechanism takes place when a household is deciding whether to participate in a given market or purchase a given good.…”