Consumption and Beef Price Changes on Demand in East Nusa Tenggara, Indonesia

Doppy Roy NendissaRatya AninditaNikmatul KhoiriyahAna Arifatus Sa’diyah

DOI 10.7160/aol.2021.130208
No 2/2021, June
pp. 97-105

Nendissa, D. R., Anindita, R., Khoiriyah, N. and Sa’diyah A. A. (2021) "Consumption and Beef Price Changes on Demand in East Nusa Tenggara, Indonesia", AGRIS on-line Papers in Economics and Informatics, Vol. 13, No. 2, pp. 97-107. ISSN 1804-1930. DOI 10.7160/aol.2021.130208.

Abstract

Households consume animal protein after carbohydrate food is fulfilled, moreover animal protein prices are increasing. This study aims to analyze the effect of rising beef prices on demand. The demand system approach uses the Quadratic Almost Ideal Demand System (QUAIDS) model. Estimation of parameters using Iterated non-linear Seemingly Unrelated Regression. The research data use the 2016 National Socio-Economic Survey (Susenas, 2016), amounting to 10,751 households. The results of the study concluded that beef is the third most elastic animal food after fresh fish and chicken meat. Fresh fish in the most elastic among all animal foods with a demand elasticity of 3.31%, followed by chicken, beef, milk powder, and eggs with demand elasticities of 1.55%, 1.62%, 1.29%, and 0.80%, respectively. Beef is a luxury item with an income elasticity of 1.59%, as well as fresh fish, chicken meat, and milk powder. While eggs are normal goods. Although fresh fish is more elastic than beef, beef marginal expenditure share (MES) is higher than fresh fish MES, so that in the long run, the increase in household income tends to increase beef consumption more than fresh fish.

Keywords

Beef prices, animal food demand, elasticity, luxurious good, marginal expenditure share.

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