The structure of meat, poultry and dairy product demand in the former Soviet Union
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There is no doubt that the Russian economy is in turmoil as witnessed by the recent freefall of the value of the ruble versus the US dollar. In the 1990's, Russian consumers experienced significant economy-wide inflation, falling consuming incomes, and the removal of consumption subsidies. In 1990, 36% of family expenditures were for food, compared to 11% by US households (1993). With food costs increasing at a much greater rate than non-food costs, this percentage increased to over 50% by 1995 (McCurdy et al. 1998). Adjustments to these higher prices have varied across households. Table 1 shows estimates of annual per capita consumption of a variety of foods for the Russian population as a whole, as well as for the most and least affluent households. Although limited to two time periods, we see that there have been different responses to increased food prices, e.g., low income households reducing their consumption of more expensive foods like meat and dairy products (Mitchell, 1996). At the same time as food prices have been increasing, there has been a conscious program of trade liberalization, which has encouraged greater imports of processed foods into the former Soviet Union (FSU). Concurrently, between 1990 and 1995 the quantity of food processed by domestic manufacturers decreased by nearly 50% (Mitchell, p.23). Thus, with reduced domestic production and increased ability to export into the FSU, the question remains as to the structure of food demand. Knowledge of such structure is important to any assessment of the potential for establishing export markets as trade barriers are lowered (McCurdy, et al., 1998). This paper attempts to provide basic information as to the structure of the demand for meat, poultry and dairy products using household level survey data. In the remainder of this report we present an overview of the data used, some general meat and dairy purchase characteristics for a sample of Russian households, a description of the econometric models used to quantify the important determinants of such purchases, and a review of the econometric results.
JOUR
Kim, Jongsoog
Gould, Brian W.
1998
Babcock Institute Discussion Paper No. 98-3
1352
