Analysis of Fresh Meat Demand in the Philippines Using Quadratic Almost Ideal Demand System, 2018-2021

Date

6-2024

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Nora DM. Carambas

Committee Member

Geny F. Lapiña, Maria Angeles O. Catelo

Abstract

Filipinos are known for their high meat consumption, with meat being a crucial source of protein and essential nutrients. Building on the analysis of Malabayabas (2008), which provided foundational insights into meat demand patterns, this research aimed to revisit and update the understanding of Filipino meat consumption, particularly noting the recent shift from pork to chicken. Using the Family and Income Expenditure Survey (FIES) datasets, the study described historical trends, identified socio-economic and demographic influences, estimated the partial effects of various factors on meat demand, and forecasted future consumption for 2025-2029 using the Quadratic Almost Ideal Demand System (QUAIDS) model. QUAIDS, an extension of the Almost Ideal Demand System (AIDS), allows for a more flexible representation of consumer preferences, addressing the limitations of linear models. This model is essential for effectively analyzing the interdependence and substitution effects among pork, chicken, and beef, capturing dynamic price movements and consumption patterns, and providing critical insights for economists, meat producers, sellers, and government agencies. Key findings indicated that while pork has historically been the most consumed meat, chicken consumption has risen significantly due to its affordability, with beef remaining the least consumed. Consumption patterns vary by region, influenced by income levels, family size, urban-rural classification, and meat prices. Notable regional variations exist, with chicken surpassing pork in Luzon, pork remaining dominant in the Visayas, and chicken being more popular than pork in Mindanao due to cultural preferences. The study highlights the significant impact of price increases, particularly the spike in pork prices due to ASF outbreaks, on consumption behaviors. Using secondary data from the Philippine Statistics Authority (PSA) through FIES and OpenSTAT for 2018 and 2021, the study confirms that fresh meat demand is generally elastic, with variations between major islands. Moreover, Luzon considers chicken and beef as substitute to pork, meanwhile, Visayas and Mindanao consider it as complements. With expenditure elasticities, it shows that pork, chicken, and beef are all normal goods, however, its determination if a luxury or necessity shows that it is overall close to being a luxury as values are either greater than one or closer to one such as 0.8 or 0.9, which signifies high prices of meat. The QUAIDS model effectively captures the substitution effects between pork, chicken, and beef, providing a detailed understanding of consumer behavior over the years. Projected demand suggests that chicken will experience the highest growth, particularly in Luzon, while pork will continue to lead in the Visayas and Mindanao. Recommendations include targeted regional pricing strategies for meat producers, government interventions to reduce production and marketing costs, and further research into regional meat consumption patterns to inform policy and industry strategies. These actions aim to enhance market efficiency, stabilize prices, and ensure a steady supply of affordable meat, supporting both economic growth and consumer well-being.

Language

English

LC Subject

Meat industry and trade

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2024 A14 P68

Notes

Viewing access to electronic resources is restricted solely to UP Gmail accounts. Any access and share requests from external organizations and personal email accounts will be promptly declined.

Document Type

Thesis

Link to Full Text

Share

COinS