Introduction: Over recent years, food price inflation (particularly, within the protein commodity group) has caused significant shifts in the dietary structure of Iranian households. Meat, as a key component of the national food basket and the primary source of animal protein, accounts for a substantial share of total food expenditure. So, fluctuations in its price have profound implications for both household welfare and food security. This study aimed at analyzing the impact of meat price increases on household consumption patterns in Iran and examining the consumer responses through price, income, and demographic elasticities. Thus, it contributed to a deeper understanding of substitution effects among different types of meat and provided evidence-based insights for food policy formulation in the context of rising prices.
Materials and Methods: The study analysis was based on microdata extracted from the Household Income and Expenditure Survey (HIES) conducted by the Statistical Center of Iran (SCI) in 2024. The dataset included detailed food consumption and socioeconomic information for more than 37,000 rural and urban households across the country. Given that the HIES identifies nearly forty distinct meat items, it was not feasible to estimate demand functions for each product individually. Therefore, these items were aggregated— according to standard national coding and classification— into four major meat-related groups: (1) red meat, (2) poultry, (3) processed meat products, and (4) fish and seafood. The study employed the Almost Ideal Demand System (AIDS) model to estimate the demand structure and derive uncompensated (Marshallian) price elasticities and income elasticities for each group. In addition, the model incorporated demographic variables such as household size, educational attainment of the household head, and geographical region to capture variations in consumption behavior across different socioeconomic strata. To evaluate potential policy outcomes, two price-increase scenarios (25 percent and 50 percent) were simulated for red meat and poultry— both individually and jointly— allowing for an assessment of consumer substitution patterns and expenditure reallocation under price shocks.
Results and Discussion: The empirical findings revealed substantial heterogeneity across meat groups in both price and income elasticities. Red meat exhibited the highest absolute price elasticity and a relatively high-income elasticity, indicating that it is perceived as a luxury or semi-luxury good in household consumption. As prices rise, red meat consumption declines sharply, and a portion of this decline is offset by increased consumption of poultry and processed meat products, which act as substitutes. In contrast, poultry was found to be a necessity good, displaying lower price and income elasticities and thus, more resilient to price changes. Demographic variables were also statistically significant in explaining consumption behavior. Larger households and those with lower income or education levels tended to allocate a higher share of their food budget to cheaper protein sources (particularly, poultry and processed meat), while smaller and higher-income households showed greater preference for red meat and fish. Moreover, regional differences highlighted that households in coastal provinces consumed more fish and seafood compared to inland regions, reflecting accessibility and cultural consumption patterns. Under the 25 percent and 50 percent price-increase scenarios, the simulations demonstrated that a higher shock would lead to a marked reduction in total animal protein intake, especially among urban households. The substitution effects became more pronounced in the 50 percent scenario, where the share of red meat expenditure declined considerably, and poultry and processed meat partially filled the gap. However, these substitutions were insufficient to fully maintain the previous protein intake levels, indicating potential nutritional vulnerability among low-income groups.
Conclusion and Suggestions: The study results suggest that uncontrolled increases in meat prices, in the absence of compensatory mechanisms, can exacerbate food insecurity by reducing animal protein consumption and widening nutritional inequality across income groups. Policymakers are therefore encouraged to adopt gradual price adjustment strategies combined with targeted social protection policies. Potential instruments include electronic food coupons for protein products, targeted cash transfers, and the promotion of affordable alternative protein sources such as aquacultural products or plant-based proteins. In summary, this study highlights that the integration of demand elasticity analysis with scenario-based policy simulation provides a powerful tool for assessing the welfare implications of food price policies. Ensuring a balance between economic efficiency and nutritional equity requires evidence-based interventions that account for both market dynamics and household-level heterogeneity in consumption behavior.