Analysis Long Run and Short Run Consumption Behavior of Chicken Meat in Iran

The main objective of this study was to evaluate the response of consumers to changes in income and prices of chicken meat in the short run and long run. In order to achieve this goal, Vector Auto Regression (VAR) and Vector Error Correction Model (VECM) have been applied to data since 1974 to 2007. Impulse response function (IRF) calculation indicated that past and present consumption of chicken have the grates impact on this variable in future periods. Also, on price momentum in the first period clearly reduce the consumption of these products; however, effect of this shock is decreasing in the second and third period and finally it tends to zero. Plus, long run results indicate that red meat is not suitable substitute for chicken; hence, meat price adjustment cannot be a useful tool to be considered for regulation of poultry price in market. Moreover, price elasticity of chicken showed that poultry is an essential commodity and increase in its price doesn’t have a significant impact on its consumption.