Estimating Demand for Lamb, Beef, Pork, and Poultry in Canada

Abstract

This paper investigates the demand for lamb, beef, pork, and poultry in Canada, both at the national level and in disaggregated provinces, to identify meat consumption patterns in different provinces. Meat consumption plays a significant role in Canada's economy and is an important source of calories for the population. However, meat demand faces several consumption challenges due to logistic constraints, as a significant portion of the supply is imported from other countries. Therefore, there is a need for a better understanding of the causal relationships underlying lamb, beef, pork, and poultry consumption in Canada. Until recently, there have been no attempts to estimate meat consumption at the provincial level in Canada. Different Almost Ideal Demand System (AIDS) models have been applied for testing specifications to circumvent several econometric and theoretical problems. In particular, generalized AIDS and its Quadratic extension QUAIDS methods have been estimated across each province using the Iterative Linear Least Squares Estimator (ILLE) estimation Method. Weekly retail meat consumption price and quantity data from 2019 to 2022 have been used for Canada and for each province namely Quebec, Maritime provinces (New Brunswick, Nova Scotia, and Prince Edward Island), Ontario, total West (Yukon, Northwest Territory and Nunavut), Alberta, Manitoba-Saskatchewan and Manitoba as well as British Columbia. Consistent coefficients and demand elasticities estimates reveal patterns of substitution and/or complementarity between the four categories of meat. Meat consumption patterns differ across each province. Results show that the demand for the four categories of meat is responsive to price changes. Overall, lamb expenditure was found to be elastic and thus considered a luxury good during the study period, while the other three categories are considered normal goods across Canada.