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Abstract
In this study, meat consumption and socio-demographic data from the 1990, 1993 and
1996 SUSENAS Household Food Expenditure and Consumption Surveys were employed
to estimate the demand for meats in Indonesia. The provinces of DKI Jakarta and West
Java were chosen as the areas of study because of the population, level of meat
consumption and the availability and quality of information in these two provinces.
Several statistical and econometric procedures were performed. Firstly, a cluster analysis
(Nicol, 1991) was used to aggregate the 16 meat types recorded in the SUSENAS into four
Meat Groups (MG-1, 2, 3 and 4). Secondly, a double truncation procedure was used to
estimate the linear approximation of the Almost Ideal Demand System (LA/AIDS) because
of the large number of zero observations in the data as well as the fact that budget shares
lie between zero and one. It is expected that the results of the study are more robust than
previous censored regression approaches which only considered one-sided truncation at
zero.
The estimated expenditure elasticities show that MG-1 (with the dominant meat, beef) and
MG-3 (with the dominant meat, untrimmed bones) are income-inelastic, whereas MG-2
(with the dominant meat, commercial and native chicken) and MG-4 (with the dominant
meat, beef liver) are income-elastic. The estimated uncompensated own-price elasticities
are negative, as suggested by economic theory. The estimated own-price elasticity of MG-
1 is -0.92, therefore, it is inelastic whereas MG-2, 3, and 4 have elastic estimated own
price elasticities, -1.09, -1.16 and -1.03 respectively. The estimated uncompensated crossprice
elasticities suggest that all the meat groups tend to be substitute goods as expected.