Red meat demand forecasting: An application on the Erzurum province

Demand forecast is important because consumers are aware of what amount of goods and services they will demand in the future and also as one of the fields of applied economy. The aim of this study is to estimate the red meat demands of households in Erzurum province and to investigate the factors affecting this demand. For this purpose, the data obtained from 724 household surveys were analyzed with Approximate Ideal Demand System (AIDS). In the study, the price, expenditure and cross elasticities of the demand for related products were estimated. The Seemingly Unrelated Regression model (SURE) was used to estimate the income and price elasticities of red meat, white meat and fish. Marshallian and Hicksian elasticities of each product were calculated. In addition, the model was estimated by adding socio-demographic variables (gender, age, marital status, educational status, occupational groups, number of family members and income groups etc.). Marshallian price elasticity values for red, white and fish meat were found as -0,663, -0,678, -0,472 respectively. Hicksian price elasticity values were -0,077 for red meat, -0,404 for white meat and -0,333 for fish meat. According to the analysis, the expenditure elasticity parameter results of the three meat groups revealed that these products were normal goods. When there was an increase of 1% in household income, red meat expenditure increased by 0.85%, white meat expenditure was 1.21% and fish meat spending ratio was 1.69%.