DEMAND FOR MEAT AND FISH PRODUCTS IN KOREA

respectively, indicating that beef consumption is sensitive to prices. Chicken is the most price
inelastic, implying that chicken consumption is not sensitive to its price. The price elasticities of
fish products range between -0.6952 and -0.8620. Expenditure elasticities for all meats are
positive and statistically significant at the 5 percent significance level, implying that they are
normal goods. The expenditure elasticity for imported beef is the most elastic, indicating that
Korea would increase imports of beef as the country increases its expenditure for meat and fish
products.

The compensated elasticities, which compensate for the income effect, are shown in
Table 6. The compensated price elasticities are very similar to the uncompensated elasticities in
terms of magnitude and statistical significance. Own-price elasticities of individual meat and fish
products carry a negative sign. Cross-price elasticities show competitive or complementary
relations among products. Positive cross-price elasticity indicates that products are substitute,
while negative cross-price elasticity means that products are complements. Hanwoo beef has the
competitive relationship with pork, as indicated by the positive sign and significance at the 95
percent confidence level. Hanwoo beef also has a competitive relationship with all other meat
and fish products.

Cross-price elasticity of imported beef with respect to Hanwoo beef (ε_IH = 0.8098) is
greater than that of Hanwoo beef with respect to imported beef (ε_HI = 0.2180). This implies that
the price of imported beef does not have an influence on the consumption of Hanwoo beef, while
the price of Hanwoo beef affects the consumption of imported beef. This is because consumers
in Korea prefer Hanwoo beef to imported beef.

There are substitute or competitive relationships between fish products, but they are not
elastic, implying that the consumption of a fish product is not sensitive to prices of other fish

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