Analysis of Saudi demand for imported honey using an Almost Ideal Demand System (AIDS)
2020
Mohamad Alnafissa | Mahmoud Alderiny
This study aims to analyze Saudi demand for natural honey imported from Yemen, Pakistan, Australia, Argentina, Mexico, and Germany, which contribute around 73.7% of the value of natural honey imports during the period of study (1991–2017). Marshallian elasticities estimation using AIDS model shows all own-price elasticities were negative and significant except for own-price elasticity associated with demand for natural honey imported from Pakistan. Natural honey imported from Yemen has own-price inelastic demand. In addition, the results of cross-price elasticities show a relationship between different products of imported natural honey and the estimated values of expenditure elasticities. According to these study results, it is important to encourage the domestic production of honey to meet the increase in the demand of the natural honey. The future studies could examine whether the domestic natural honey might be close substitute of any of these imported natural honey. In addition, we recommend increasing sources of import natural honey, especially if a country might be closer substitute for others.
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