Modelling the meat consumption patterns in Australia

Abstract

Meat plays an important role in Australia's food intake as Australians currently allocate 40% of their food expenditure on meat. This paper attempts to model the demand for the various types of meat in Australia using data from 1962 to 2011 and the system-wide approach to modelling. The paper considers a number of alternate models, verifies the validity of the demand model hypotheses and selects a preferred model using the information inaccuracy criterion. The paper then uses the preferred model to forecast meat demand in Australia under various economic policy scenarios. The results show that between 1962 and 2011, meat budget share has more than halved and that consumer taste plays a significant role in shifting the meat consumption in Australia to chicken and pork at the expense of beef and lamb. Beef is a luxury, while mutton, lamb, chicken and pork are necessities. Demand for mutton is price elastic and, beef, lamb, chicken and pork is price inelastic.