232 International Journal of Consumer Studies, 29, 3, May 2005, pp232–238 © 2005 Blackwell Publishing Ltd Blackwell Science, LtdOxford, UKIJCInternational Journal of Consumer Studies1470-6423Blackwell Publishing Ltd, 200429 3232238Original ArticleEstimation of meat demand system in JordanA.S. Jabarin Correspondence Amer S. Jabarin, PO Box 13021, Amman, 11942, Jordan. Tel.: +962-6- 523-1503, E-mail: ajabarin@nets.com.jo Estimation of meat demand system in Jordan: an almost ideal demand system Amer S. Jabarin Department of Agricultural Economics and Agribusiness, Faculty of Agriculture, University of Jordan, Amman, Jordan Abstract This paper reports the results of the estimation of a linear approximate almost ideal demand system for Jordan meat demand using cross-sectional data collected by the Depart- ment of Statistics in Jordan as part of the household expen- diture survey. A censored regression method for the system of equation is used to analyse the meat consumption pat- terns. This method allows for inclusion of a large number of zero consumption for some foods. Two-step demand system was estimated. In the first stage, Inverse Mill Ratio is esti- mated by using probit regression model. In the second stage, the estimated variable is included in the AIDS model to estimate food demand elasticities. The objective of this work is to provide econometric estimates of the different types of demand elasticities for meats in Jordan. To be con- sistent with the demand theory, the homogeneity, symmetry and adding up restrictions were satisfied in the estimated models. The estimated model was used to obtain estimates of Hicksian, Marshallian and expenditure demand elastici- ties for meats in Jordan. The results revealed that the demand for mutton and poultry is elastic while the demand for beef and fish is inelastic. The cross-price elasticities indicate that poultry and beef are substitutes to mutton. The expenditure elasticities confirm that beef and mutton are luxury goods while poultry and fish are necessity goods. Keywords LA/ AIDS, Marshallian elasticities, Hicksian elastic- ities, demand system, censored regression, Jordan meats demand system. Introduction In 1987, the government of Jordan, with the support of the World Bank (WB) and the International Mone- tary Fund (IMF), started an ambitious structural adjustment programme (SAP) to rectify the macro- economic imbalances, reduce sector distortions and restore economic growth. In responding to the SAP, the Jordanian government started in 1988 to adopt a number of policy measures to meet the objectives of the programme that included a series of fiscal adjust- ments to reduce the budget deficit including curtail- ment of consumer subsidies and tariff and tax reforms to enlarge the revenue base and enhance revenue per- formance. The programme suffered a serious setback because of the 1991 Gulf crises and the influx of hun- dreds of thousands of Jordanian expatriates who were living in Kuwait and Iraq. The structural adjustment process was reinitiated in 1994. In addition to the pre- vious objectives of the first SAP, in 1994, another objective was added to the programme that is to meet the requirements of joining the World Trade Organiza- tion (WTO). The agricultural sector received special attention through a special loan from the WB for restructuring the sector and to improve its competi- tiveness. The livestock subsector was the most heavily subsidized through direct and indirect subsidies. These subsidies were mainly in terms of low prices of animal feed and trade restrictions on imported and exported red and white meats. After 2 years of joining the WTO in 2002 and 8 years of continuous adjustment, the impact of the reform process was not quantified. Policy makers now need estimates of social welfare to see how the restructuring process impacted both the demand and supply sides of the agricultural sector. Demand studies in general, and estimated parameters such as demand elasticities in particular are crucial for policy analysis and the deci- sion making process. The most popular well-known methods that have been used were computable general equilibrium and partial equilibrium models. But, both models require estimates of elasticities of supply and demand. Little basic economic research was conducted