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Consumption dynamics in inverse demand systems: an application to meat and fish demand in Korea

In this study, meat and fish consumption is depicted in the form of inverse demand systems taking into consideration the intertemporal consumption behavior presented in the data. The concept of intertemporal two‐stage budgeting process is applied to this system which explicitly incorporates intertemporal consumption behavior as summarized by the Euler equation. Results based on Korean meat and fish products indicate that the proposed method is promising. Furthermore, the prices of meat and fish are quantity inflexible while the prices of beef and pork are sensitive to changes in consumption scale.