Abstract
Recent empirical research on meat demand has debated whether or not
the effects of changing meat prices can explain all the observed changes
in meat consumption patterns. This thesis provides a framework for
modelling and testing for structural change using three commonly used
demand system -- a linear demand system, an inverse demand system, and
the Almost Ideal Demand System (AIDS). Emphasis is placed on the
statistical adequacy of the models. Two specific issues are carefully
addressed: consumer concern for cholesterol and its effect on meat
demand, and the dynamics of adjustment in meat consumption.
When modelling the demand for beef, pork, chicken and turkey, none
of the three demand systems are found to be statistically adequate, and
consequently, cannot be used to address structural change issues for
these particular data and commodities. The AIDS models are re-estimated
in an attempt to model the demand for beef, pork, chicken and fish
instead of turkey. The dynamic versions of the AIDS models using either
a gradual shift spline path, a Farley-Hinich path, a variable measuring
cholesterol awareness, or the log of the cholesterol awareness variable
are all statistically adequate. Likelihood ratio tests on these models
indicate that structural change has occurred. The significance of the
cholesterol variable in the demand models indicates that health concern
is an important factor in meat purchasing decisions.
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