Three essays on demand for meat and dairy products evidence from household level data
Authors:   , Dobrowolska Perry Agnieszka 
Published: May 2022

Dairy and meat demand is not only influenced by prices and income but also by generational cohort (Millennial, Gen X, Baby Boomers, and Traditionalists), race, and other demographic factors. This study examines the demand for meat and dairy product using Consumer Expenditure Survey (CEX) household-level data and the Almost Ideal Demand System (AIDS). In the first essay, a system for milk, butter, cheese, ice cream, other dairy and meat is estimated using an AIDS model for years 2013-2019. The system is estimated separately for each generation and incorporates demographic variables such as the number of children, employment status, race, or area of residence. The results indicate some material differences in dairy demand between the four generational groups. It also reveals the significant impact of income, race, and employment status on dairy demand. Different generations have much different own-price elasticities for milk, cheese, and ice cream. Among all generations, milk demand is relatively inelastic, while butter and ice cream demand is very elastic. The results of this research indicate that the incorporation of demographic variables and generational cohorts into demand systems has a considerable impact on demand elasticities. Therefore, any future dairy demand forecasts must begin to incorporate demographic information to provide more accurate estimates of future demand. In the second essay, a Linear Approximate Almost Ideal Demand System (LAAIDS) for U.S. meat demand is estimated using annual average expenditures on beef, pork, poultry, seafood and food at home, for years 2001-2019. The results are estimated for all consumers, as well as, separately for four generational cohorts. The results suggest that younger cohorts spend more on poultry than older cohorts (Millennials and Gen X vs Baby Boomers and Traditionalists). Contrary to other studies, his study found beef own-price elastictity to be the least elastic among the meat products. The results of this study suggest that the higher consumption of poultry among younger generations compared to beef and pork is a result of change in preference structure. The third essay determines how own- and cross-price elasticties change depending on the period of data collection. The research uses AIDS model with household level data that includes explanatory variables such as: generational cohort, race, and other demographic factors. This study examines the demand for dairy and meat products in the United States using CEX data from two distinct periods, years 2002-2006 and 2015-2019. The system is estimated separately for each commodity group and incorporates demographic variables such as the number of children, employment status, or race. The results indicate differences in meat and dairy demand between the two periods. It also reveals the significant impact of income, race, and employment status on dairy and meat demand. Demand for beef steak, pork, chicken, and fish was noticeably different between the two periods. Similarly, demand elasticities of all dairy commodities were different between the two periods. Lastly, the results of this research are used to forecast U.S. beef, pork, and poultry consumption by 2030. The consumption projections, based on each period separately, strongly suggest that the period of fit has a noticeable and potentially consequential impact on predicted future outcomes.