Estimation of the Demand Elasticities of Meat in South Korea: A System-wide Approach

The aim of this study is to estimate the price and expenditure elasticities for meat in Korea. We construct a meat demand system which is consisted of four equations related with beef, pork, chicken and other raw meat. SUR method is used for the estimation over the micro-data covering 311,779 quarterly observations from 2003 to 2012. The estimated expenditure elasticities were all positive and statistically significant. Expenditure elasticities for beef was greater than one, indicating that beef can be considered luxury goods. Although the expenditure elasticity for other meat, pork, and chicken are less than one, these are close enough to one, which is the cut-off point between luxury and necessity goods. The compensated and uncompensated own price elasticities and cross-price elasticities were statistically significant and theoretically acceptable.