The demand for beef in Indonesian urban

Abstract

The low consumption of animal protein food is one of the causes of the increasing number of stunting in Indonesia. This study analyzes the effect of changes in prices and incomes on demand for five animal food groups, namely fish, chicken, beef, eggs, and milk. The demand function approach uses the Almost Ideal Demand System model with the parameter estimates using Seemingly Unrelated Regression. The research data using 124,513 households from Indonesian National Socio-economics Survey in 2016. The results showed that beef was the most elastic animal food among all animal foods with a demand elasticity of 1,031%, followed by chicken meat (0.564%), milk (0.451%), eggs (0.313%), and sea fish (0.151%). Beef is a luxury item. Beef is substituted with sea fish, eggs, or chicken meat. Beef is complementary to milk. The increase in beef prices is one of the policies that need to be considered so that the target of protein consumption is immediately reached.

Developing a framework for export competitiveness in the agrifood sector: the case of the Australian beef industry

“…The elasticities estimated in this study are comparable with the recent estimates by Arifin et al (2018) and Anindita et al (2020) who also used AIDS models, and found beef to be a price elastic commodity. The slight differences in the estimated compensated and uncompensated elasticities of this study might be due to fact that the other studies did not distinguish between domestic and imported beef, as opposed to this study.…”

“…A few earlier studies investigated beef demand in Indonesia; however, such research studies that apply the AIDS model are scarce (Arifin et al 2018;Anindita et al 2020). Further, the studies used different data sets, commodity coverage and independent variables and mainly employed estimation methods other than AIDS.…”

“…The results of a recent study by Anindita et al (2020) employed 2016 data from the Indonesian National Social-Economic Survey (SUSENAS) dataset and estimated compensated and uncompensated price elasticities by using AIDS. Their estimates of ownprice elasticities of beef in Indonesia are near unitary for both compensated (-1.030) elasticities and uncompensated (-1.050).…”

“…In almost all the recent studies (Anindita et al 2020;Waldorn & Fisher 2017), the expenditure elasticity of demand for beef in Indonesia was found to be around unity, although Arifin et al (2018) estimated the income elasticity for beef as 1.21, instead of expenditure elasticity. The estimated expenditure elasticities are positive, suggesting that Indonesian consumers will spend more on beef (domestic or imported) as their incomes increase.…”

“…Secondly, this study provided an update with a particular focus on the impact of Indonesian Government policies for Australian beef exports while considering other beef exporters into Indonesia and domestic beef. Although some recent studies provide insights into the Indonesian beef import demand using an AIDS model, including Rudatin (2016), Arifin et al (2018) and Anindita et al (2020), these studies did not evaluate the impact of government policies. The approach adopted in this study is different from earlier studies, as the impact of the Indonesian Government's trade policies while considering imported beef from different sources along with domestic meats was not evaluated in the earlier studies.…”