Agricultural Economics and Development

Agricultural Economics and Development

Determining the Net Suppliers and Demanders of Meat in Iran: Applying the Relation of Modified Slutsky Equation with Concept of Endowment Income Effect

Document Type : Original Article

Authors
Gh. Layani 1
M. Bakhshoodeh 2
1 Shiraz universityPhD in Agricultural Economics, Instructor of Sari University of Agricultural Sciences and Natural Resources, Sari, Iran
2 Professor of Agricultural Economics, Shiraz University, Shiraz, Iran.
10.30490/aead.2021.324281.1136
Abstract
This study aimed at analyzing the demand for meat to achieve a measure of Iranian net seller households. For this purpose, using an almost ideal demand system (AIDS), considering the endowment income effect in the Slutsky equation, the compensatory own-price elasticities were calculated. A comparison of the compensatory elasticity calculated with and without endowment income effect showed a low endowment income effect for these households because of the low difference between compensatory elasticities. But for the rural households, the compensatory elasticity calculated through Slutsky's new equation indicated that the endowment income effect in the rural households was higher than that of the urban households. The compensatory elasticities calculated with Slutsky's new equation for poultry meat showed that 58 percent of the urban households and 18 percent of the rural households were the net buyers and also, 42 percent and 82 percent of these households were the net sellers, respectively. According to the results, all the urban households were net buyers for fish and the number of rural households known as the net sellers of this type of meat was more than that of its net demanders. Also, 84 percent of the urban households and 10 percent of the rural households were the net buyers of red meat. On the other hand, the number of households in higher-income groups that were the net buyers of red and fish meat and the net sellers of poultry was added. Finally, it was recommended the net sales evaluation for other food groups to achieve more accurate results in policy analysis.
Keywords
Net Buyer
Net Seller
Slutsky Equation
Endowment Income Effect
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