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Issues of Demand Specification and Industry Structure in Turkeys and Broiler Chickens

Abstract Factors unique to the turkey industry suggest that conclusions concerning market structure and demand specification drawn from aggregate poultry data cannot necessarily be extrapolated to the turkey industry. The Wu-Hausman endogeneity test is used to examine demand specifications and industry structure specifically for turkey meat. In contrast to general poultry, quantity—not price—is found to be predetermined in demand models that use annual turkey data. Quarterly demand analysis suggests this result stems from biological cycles that limit a producer's ability to react to price change and the use of a weighted average for determining price and quantity.