Philippine E-Journals

Household Demand Analysis For Fresh Meat In The Philippines

Maria Luz M. Malabayabas | Jose M. Yorobe Jr. | Nenita L. De Castro

Discipline: Agriculture, Agribusiness

 

Abstract:

This study was conducted to estimate the demand elasticities for fresh pork, chicken and beef in the Philippines. Specifically, it analyzed the relationship between and among these three commodities based on the computed elasticities with price and income as the primary considerations. The Nonlinear Quadratic Almost Ideal Demand System (NQAIDS) approach was used in estimating the demand systems for fresh meat in the Philippines using seemingly unrelated regression (SUR). The computed elasticities were used to project the demand for fresh meat using varying income levels. Results showed that there is a clear difference in the patterns of fresh meat consumption among households belonging to different income groups based on the price and income elasticities. Among the different income groups, the low-income group had the highest elasticity in terms of magnitude and the lowest budget shares in all fresh meat, suggesting that the low-income group would bear more of the burden in the increase in prices of fresh meat. These findings suggest that policies such as price-reduction or income-augmentation which intend to increase fresh meat consumption should be formulated in a way that income diversity would be recognized. However, these should not only focus on one specific fresh meat but also consider the other kinds of fresh meat since it has a strong simultaneous effect based on the cross-price elasticities.