Analysis of broiler meat demand in Central Java Province

Abstract

The purpose of this research was to know factors affecting broiler meat demand, and to estimate price, income and cross elasticity of broiler meat demand in Central Java Province. This study using pooled data of time series from 1999 to 2008 and cross section data at 35 districts, in Central Java Province, so there were 350 observations. Data analized using double log multiple regression. The results showed that the price of broiler meat, egg, rice, native chicken meat, beef and
income, the population of people, lag demand of broiler meat and dummy variable of Avian Influenza
2
epidemic together has significant influences on demand of broiler meat (R = 0.989). Partially, income significantly (P≤ 0.10) influence the demand of broiler meat, while the price of broiler meat, rice, beef and population of people, lag demand of broiler meat and dummy variable of Avian Influenza epidemic has highly significant effects on broiler meat demand (P ≤ 0.01). Price elasticity coefficient of broiler meat was 0.241 (in elastic), indicating that broiler meat was essential goods. Cross elasticity coefficient of rice to demand of broiler meat was less than zero (negative), indicating that broiler meat was a complementary goods for rice. However, cross elasticity coefficient of beef was more than zero (positive), indicating that broiler meat was a substitution goods for beef. The coefficient of income elasticity was more than zero (positive) but less than one, indicating that broiler meat was a superior and an essential goods. Dummy variable of Avian Influenza epidemic was highly influenced demand of broiler meat, so if there was no Avian Influenza outbreak in Central Java Province, the demand of broiler meat would be higher than those of Avian Influenza outbreak.