The Impacts of Increasing Energy Carriers Price on Meat Market in Iran

Costs of livestock production are expected to significantly increase as result of increasing energy price in Iran. This in turn causes meat prices and production to change and ultimately affect producers and consumer welfares. This study determines the economic impact of this policy on Iranian meat market applying a multimarket equilibrium displacement model (EDM) and taking into account scenarios of 38%, 50% and 300% increase in energy prices with and without change in demand for both situations of once and gradually increasing energy price. Result shows that increasing of retail sale demand for different kind of meat in any scenario are sufficient to offset lost producer welfare. According to the result of compared once and gradually implication increasing energy price, decreasing of producer and consumers’ welfare on once increasing energy prices is lower than gradually increasing energy prices.

JEL Classification: E64, D41, P28

Keywords:
Equilibrium Displacement Model, Meat Market, Producer Surplus, Consumer Surplus, Energy Price