Beef and pork values and price spreads explained

This article uses national, quarterly data to conduct an empirical analysis of pre-committed meat and fish demand by U.S. and Japanese households using the generalized almost ideal demand system (GAIDS). Pre-committed demand represents the component of demand that is insensitive to both income and price adjustments. U.S. consumers are found to hold significant positive pre-committed demand for beef and pork, while Japanese consumers appear to possess significant, positive pre-committed demand for beef and fish. This provides evidence to partially explain observed differences in Japanese and U.S. consumer reactions to nonprice and nonincome effects in beef, pork, poultry, and fish. In addition, based on in- and out-of-sample performance, the more general GAIDS is preferred to the almost ideal demand system (AIDS) for both the U.S. and Japanese demand systems. Results lend to improved demand modeling efforts and more complete understanding of true market forces at hand in meat and fish markets for these culturally diverse consumer groups.