The Determinants of Libyan Red Meat Import Demand Equation For the Period (1970-2010)

Abstract

In 2010, Libya's red meat supply stood at about 77 thousand tonnes, about 25 percent was imported. Given the insufficient levels of domestic red meat production, the government mainly relies on imported red meat to fill the gap. The objective of this study is to examine factors affecting import demand for red meat in Libya, also investigates whether there is exists a long run relationship between red meat import quantity and its major determinants by using annual data for the period 1962-2010. Based on abounds test known as Auto-Regressive Distributed Lag model (ARDL). The results of the bounds test reveal that the quantity of red meat imports and its determinants namely red meat import price, Gross Domestic Product and domestic meat production are cointegrated. The results also indicate that the demand for red meat imports is elastic with respect to import price level in the short run. However, in the long run, the price elasticity becomes greater while the income elasticity level remains less than one. Thus, this indicates that red meat imports are generally considered as necessary good.