Socioeconomic Determinant of Livestock Products Consumption in Urban and Rural Java, Indonesia

Abstract

Livestock products are important animal protein source in Indonesian diet and the consumption of these products increase. This paper tried to to examine the socioeconomic determinant of the consumption of livestock product in Indonesia, particularly in urban and rural Java. Analysis of livestock product consumption with some socioeconomic characteristics of household can be estimate by using household expenditure data. Demand parameters or elasticity were estimated by using Linear Approximation of Almost Ideal Demand System (LA/AIDS) model. The LA/AIDS model estimate the price, expenditure elasticity of livestock products consumption and the socioeconomic variables of the household sample. Estimation of socioeconomic variables shown that household size, age of household head, education of wives and household head occupation has impact to the consumption of meat, egg and milk for urban household while only occupation of household head had significant impact for rural household. All own-price elasticities are negative and statistically significant, except egg. Negative cross-price elasticities indicate complementary relation while positive sign indicate substitution relation. Expenditure elasticity for meat and milk product is positive, greater than one and statistically significant at the one percent significance level, implying that they are luxury food. Negative sign in the expenditure elasticity showed that egg classified as necessity good. The price sensitivity of household consumption on livestock product such as ownan d cross-price elasticity can more precisely inform policy maker and producer how consumer will respond if there is change in the price of any or some livestock product and in household income from the estimation of expenditure elasticity.