The demand for processed meat in Canada: an application of the almost ideal demand system

Loading...
Thumbnail Image
Date
2018
Authors
Irié, Irié Irma
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
The objective of this research is to conduct an econometric analysis of Canada’s demand for processed meat based on panel data. The four meat categories included in the system of equations used in the estimation are fresh and frozen beef, pork, and poultry as well as processed meat. The random effect panel method was estimated by generalized least squares (GLS) and the complete demand system with a linear approximation of an almost ideal demand system (LA/AIDS). The expenditure elasticity of processed meat was estimated to be positive but not with much confidence which suggests processed meat (as defined by Statistics Canada’s Survey of Household Spending) may a normal good. The Marshallian own-price elasticities estimated using two methods were at -.568 and -.976 with some confidence suggesting a tax to lower processed meat consumption may need to be relatively high to reduce consumption. Some evidence was identified that the consumption of processed meat causes health costs. Processed meat, beef and pork are estimated to be mild substitutes as measured by their substitution elasticities. This study shows that the Canadian consumption of processed meat is comparable to other meats but the demand needs to be further investigated before recommendations regarding a processed meat tax are made.
Description
Keywords
processed meat, Canada, AIDS model, normal good
Citation