An almost ideal demand system analysis of meat demand in UAE

A. Basarir

Abstract: The main objective of this research is to analyze demand for different kinds of meats (Beef, Lamb, Goat, Chicken, Camel, and Fish) and the factors affecting the consumers’ preferences for each in UAE. A face-to-face survey technique was conducted on five hundred randomly selected respondents from UAE. A Linear Approximate Almost Ideal Demand System was utilized via seemingly unrelated regression model. According to the results, educated respondents demand more lamb and UAE nationals demand more beef. As household size increases and the respondent is employed by public or private sectors his/her demand for camel meat increases. On the other hand, as the income of respondents increases their demand for beef decreases but for goat increases. Marshallian and Hicksian elasticity calculated from the model were between 1 and -1 making the products less responsive to price changes. Cross price, elasticity indicates goat and beef, goat and chicken, camel and beef, and camel and fish as complements; but chicken and camel as substitutes. Having all significant expenditure elasticity for lamb, goat, and camel greater than one makes them luxury and the others necessity items in UAE household diet. As for income effect analysis, any increase in income of UAE households in the future would make them proportionally allocate more of their income to the purchase of fish, camel, goat, and lamb.

Keywords: Expenditure Elasticity; Hicksian Elasticity; Income Effect; Linear Approximate Almost Ideal Demand System (LA-AIDS); Marshallian Elasticity; Meat Demand

Date published: 2019-03-29