Modeling South Africa’s Meat Import Demand System

A modified Central Bureau of Statistics (CBS) differential model was used to provide the first estimate of South Africa’s meat import demand system. In addition to price and scale the model also included a trend and trend-squared term to measure changes in technology and/or consumer demands for meat outputs. Cross-prices elasticity (cij) indicates that poultry is a statistically significant substitute for pork, sheep/goat, and offal. Scale coefficients were highly significant, positive for beef and negative for other meat. The trend and squared trend terms were also highly significant, implying changes in import demand not driven by price or scale changes. During 1997-2010 periods, changes in import demand caused poultry and pork to rise and import demand for beef, sheep/goat, and offal meats to decline. A simulation model was developed that converted an expected CBS endogenous into “predicted” quantities. The in-sample quantity predictions are remarkably accurate, indicating the model performs very well in forecasting South Africa’s meat imports given prices and scale. Results of model simulations conclusively demonstrate meat changes similar to the CBS model.

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Conference Paper/ Presentation
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JEL Codes:
F17; C22; C51; C53

 Record created 2017-04-01, last modified 2018-01-22

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