Since the government's economic development plans started in 1962, the Korea has achieved successful economic development. In this development, the agricultural sector has played an important role and, also the livestock industry was so important in Korea. Changing economic and social factors, such ...
Since the government's economic development plans started in 1962, the Korea has achieved successful economic development. In this development, the agricultural sector has played an important role and, also the livestock industry was so important in Korea. Changing economic and social factors, such as increases in per capita incomes, industrialization, urbanization, and working women have contributed that the diet and eating habits in Korea are rapidly changing. The rice consumption has decreased. However, the meat consumption are increasing and expected to increase substantially in the future. In addition, the demand for vegetables, fruits, and fishes is increasing because health concerns about nutrition and food safety and quality have highly increased. However, the demand for meat will continue to increase still, and the importance of the livestock industry will also increase in national economy and in agricultural production. In this situation, to understand the meat demand structure and to get the best estimation on meat demand have been intensified in the country. The objective of this study is trying to estimate the demand for major meat demand and to test the misspecification for the Almost Ideal Demand System (AIDS) model on meat demand. Many AIDS model have been studied for estimating the meat model and food demand model. However, these studies did not show the results of the total misspecification tests, whether the models violated the assumption of normality, linearity, homoskedasticity, parameter stability, and independence for model. The misspecification tests are important because if the assumption are violated, the Ordinary Least Square (OLS) estimators may be biased, inconsistent, and imprecise. In this study, the Linearized Almost Ideal Demand System (LA/AIDS) model was used, and Seemingly Unrelated Regression (SUR) method was estimated. The p-values of chicken model indicate no possible violations for all of the assumptions underlying the linear regression model, except the normality (kurtosis and omnibus), the functional form (reset2), and the parameter stability (mean) assumptions, in individual tests. Otherwise, the equation joint tests indicate the possible violations, expect the parameter stability and autocorrelation in overall variance test. The p-values of beef model indicate no possible violations for all of the assumptions underlying the linear regression model, except the functional form (KG2), the heteroskedasticity(white and dynamic), the autocorrelation, and the parameter stability (mean) assumptions, in individual tests. Otherwise, the equation joint tests indicate no possible violations, expect the autocorrelation in overall mean test. The p-values of pork model indicate no possible violations for all of the assumptions underlying the linear regression model, except the functional form (KG2), the heteroskedasticity(white), the autocorrelation, and the parameter stability (mean) assumptions, in individual tests. Otherwise, the equation joint tests indicate no possible violations, expect the autocorrelation in overall mean test. The LA/AIDS model for meat demand analysis was estimated in the case of the unrestriction and restriction with the Hicksian and Marshallian elasticity. The case of the unrestriction on meat demand had more good estimator than the case of the restriction. The results of demand analysis conformed the economic theory of meat demand regarding prices and income in the case of the unrestriction. The Marshallian elasticity had more good estimator than the Hicksian elasticity in the case of both the unrestriction and restriction. In the unrestricted model, the chicken own price elasticity is not significant in the case of both the Marshallian and Hicksian elasticity. In the case of the own price elasticity, the beef of them appeared the most sensitive response in the case of both the Marshallian and Hicksian elasticity. In the case of the cross price elasticity, the beef-chicken and the pork-chicken cross price elasticity are not significant in the case of the Hicksian elasticity. However, all cross price elasticities in the case of the Marshallian elasticity are significant. In the case of the Marshallian expenditure elasticity, the expenditure elasticities of chicken, beef, and pork are almost the unit elasticity. In the restricted model, the chicken own price elasticity is not significant in the case of both the Marshallian and Hicksian elasticity. In the case of the own price elasticity, the beef of them appeared the most sensitive response in the case of both the Marshallian and Hicksian elasticity. In the case of the cross price elasticity, the beef-chicken and the pork-chicken cross price elasticity are not significant in the case of the Hicksian elasticity. Moreover, the beef-chicken, the pork-chicken , pork-beef cross price elasticity are not significant in the case of the Marshallian elasticity. In the case of the Marshallian expenditure elasticity, the expenditure elasticities of chicken, beef, and pork are all significant and almost the unit elasticity. The above estimation was based on the assumption of the many kinds of economic restriction. Those assumption could be very painful limit with this research. However, the author has belief that this kind of trial to estimate and to test the meat demand by rule of thumb could have certain economic implications in pursuing livestock policies in Korea. Better results than those of the methodology used in this study could be obtained with better theoretical model in the future study.
Since the government's economic development plans started in 1962, the Korea has achieved successful economic development. In this development, the agricultural sector has played an important role and, also the livestock industry was so important in Korea. Changing economic and social factors, such as increases in per capita incomes, industrialization, urbanization, and working women have contributed that the diet and eating habits in Korea are rapidly changing. The rice consumption has decreased. However, the meat consumption are increasing and expected to increase substantially in the future. In addition, the demand for vegetables, fruits, and fishes is increasing because health concerns about nutrition and food safety and quality have highly increased. However, the demand for meat will continue to increase still, and the importance of the livestock industry will also increase in national economy and in agricultural production. In this situation, to understand the meat demand structure and to get the best estimation on meat demand have been intensified in the country. The objective of this study is trying to estimate the demand for major meat demand and to test the misspecification for the Almost Ideal Demand System (AIDS) model on meat demand. Many AIDS model have been studied for estimating the meat model and food demand model. However, these studies did not show the results of the total misspecification tests, whether the models violated the assumption of normality, linearity, homoskedasticity, parameter stability, and independence for model. The misspecification tests are important because if the assumption are violated, the Ordinary Least Square (OLS) estimators may be biased, inconsistent, and imprecise. In this study, the Linearized Almost Ideal Demand System (LA/AIDS) model was used, and Seemingly Unrelated Regression (SUR) method was estimated. The p-values of chicken model indicate no possible violations for all of the assumptions underlying the linear regression model, except the normality (kurtosis and omnibus), the functional form (reset2), and the parameter stability (mean) assumptions, in individual tests. Otherwise, the equation joint tests indicate the possible violations, expect the parameter stability and autocorrelation in overall variance test. The p-values of beef model indicate no possible violations for all of the assumptions underlying the linear regression model, except the functional form (KG2), the heteroskedasticity(white and dynamic), the autocorrelation, and the parameter stability (mean) assumptions, in individual tests. Otherwise, the equation joint tests indicate no possible violations, expect the autocorrelation in overall mean test. The p-values of pork model indicate no possible violations for all of the assumptions underlying the linear regression model, except the functional form (KG2), the heteroskedasticity(white), the autocorrelation, and the parameter stability (mean) assumptions, in individual tests. Otherwise, the equation joint tests indicate no possible violations, expect the autocorrelation in overall mean test. The LA/AIDS model for meat demand analysis was estimated in the case of the unrestriction and restriction with the Hicksian and Marshallian elasticity. The case of the unrestriction on meat demand had more good estimator than the case of the restriction. The results of demand analysis conformed the economic theory of meat demand regarding prices and income in the case of the unrestriction. The Marshallian elasticity had more good estimator than the Hicksian elasticity in the case of both the unrestriction and restriction. In the unrestricted model, the chicken own price elasticity is not significant in the case of both the Marshallian and Hicksian elasticity. In the case of the own price elasticity, the beef of them appeared the most sensitive response in the case of both the Marshallian and Hicksian elasticity. In the case of the cross price elasticity, the beef-chicken and the pork-chicken cross price elasticity are not significant in the case of the Hicksian elasticity. However, all cross price elasticities in the case of the Marshallian elasticity are significant. In the case of the Marshallian expenditure elasticity, the expenditure elasticities of chicken, beef, and pork are almost the unit elasticity. In the restricted model, the chicken own price elasticity is not significant in the case of both the Marshallian and Hicksian elasticity. In the case of the own price elasticity, the beef of them appeared the most sensitive response in the case of both the Marshallian and Hicksian elasticity. In the case of the cross price elasticity, the beef-chicken and the pork-chicken cross price elasticity are not significant in the case of the Hicksian elasticity. Moreover, the beef-chicken, the pork-chicken , pork-beef cross price elasticity are not significant in the case of the Marshallian elasticity. In the case of the Marshallian expenditure elasticity, the expenditure elasticities of chicken, beef, and pork are all significant and almost the unit elasticity. The above estimation was based on the assumption of the many kinds of economic restriction. Those assumption could be very painful limit with this research. However, the author has belief that this kind of trial to estimate and to test the meat demand by rule of thumb could have certain economic implications in pursuing livestock policies in Korea. Better results than those of the methodology used in this study could be obtained with better theoretical model in the future study.
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