Document Type : Research Paper
Authors
1 Msc, Agricultural Economicd Department, Tarbiat Modares University, Tehran, Iran.
2 Associate Professor of Agricultural Economic Department, Tarbiat Modares University, Tehran, Iran.
Abstract
Objective: Protein-rich foods are primary dietary sources, and chicken meat constitutes a major protein component in Iranian household consumption. This study aims to identify and quantify the determinants of chicken meat supply and demand across Iran’s provinces, emphasizing both economic and spatial interactions, to inform regionally sensitive policy design. The analysis covers the period 2002–2024 in the Iranian calendar.
Methods: Using provincial panel data, the study estimates supply and demand functions through conventional panel econometric models and spatial panel models. After performing necessary specification and diagnostic tests, fixed-effects panel estimation was selected. Key explanatory variables include live-chicken prices (supply-side), consumer chicken prices (demand-side), input costs, exchange rates, household income, and red meat prices as a substitute. The analysis also computes historical price elasticities to assess changes in consumer responsiveness over time.
Results: After conducting the necessary statistical tests, the results indicated that a fixed effects panel model is more suitable for analyzing the supply and demand data of chicken meat. The analysis revealed that the price of live poultry has a significant positive impact on chicken meat supply. Additionally, the price of chicken meat negatively affects demand, while the price of red meat positively influences the demand for chicken meat. Furthermore, spatial analysis demonstrated that spatial factors significantly affect the supply and demand of chicken meat at the provincial level. The presence of positive spatial autocorrelation in supply and negative spatial autocorrelation in demand indicates different spatial distribution patterns for these two variables.
Conclusions: This study employed spatial econometric analyses to explore how regional factors interact to shape Iran’s chicken meat market. The findings reveal that both the supply and demand of chicken meat are influenced not only by internal provincial economic factors but also by the conditions of neighboring provinces, indicating significant spatial interdependence. The estimated supply equation demonstrates that the price of live chickens has a positive effect on supply, whereas higher input costs and exchange rate fluctuations negatively influence production. On the demand side, household income and the price of red meat considered a substitute good positively affect chicken consumption, while the price of chicken meat itself exerts a negative influence. Compared with earlier studies that estimated chicken meat’s price elasticity at approximately −0.93, this study finds a lower elasticity of about −0.25. This suggests that chicken meat has become a necessity in the Iranian household food basket, with consumers showing reduced responsiveness to price changes. Consequently, any price adjustment in this market may face inflexibility from consumers. The observed substitution effect between chicken and red meat implies that as red meat prices rise, households tend to shift their consumption toward chicken. Spatial analysis further indicates the presence of spatial convergence in supply, meaning that production levels in one province tend to influence those in neighboring provinces. The spatial models confirm that economic variables such as input prices, exchange rates, and household income significantly shape both supply and demand patterns. Overall, the study highlights the need for regionally tailored policies that consider spatial dependencies rather than uniform national interventions. Despite data and modeling limitations, the research underscores the critical role of spatial factors in developing more effective and balanced policies for the chicken meat market.
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