Analysis of Consumer Income Elasticity to Beef Demand in the City of Medan

Oct 13, 2025 by thesweetdesigns.com 9 views

Analysis of Consumer Income Elasticity to Beef Demand in the City of Medan

Case Study of Tanjung Mulia Village, Medan Deli District, Medan City

Introduction

The demand for beef in the city of Medan is a complex phenomenon that is influenced by various factors, including the price of beef, the price of substitute goods, and the level of consumer income. In this study, we aim to understand how these factors affect the demand for beef in the region of Tanjung Mulia Village, Medan Deli District, Medan City. The research was conducted in 2016 and used a purposive approach to analyze the elasticity of consumer income to beef demand based on household income strata in the study area.

Understanding of Demand Elasticity

Income elasticity is an indicator that illustrates how much changes in demand for an item in line with changes in consumer income. When income elasticity is greater than 1, it shows that the demand for goods is very responsive to changes in income. In the context of beef in Medan, high elasticity indicates that beef is seen as a normal item, where demand will increase with the increase in income. This means that consumers in Medan are likely to increase their demand for beef as their income increases.

The Effect of Prices and Substitution Goods

In this study, the price of beef and the price of substitute goods, such as chicken meat, has proven to affect consumer decisions in choosing meat. When the price of beef increases, consumers may turn to chicken meat as a more affordable alternative. This leads to a decrease in beef demand, especially among households with low income. Conversely, if consumer income increases, they tend to choose beef rather than chicken meat, because it is considered more quality and has better nutritional value.

Methodology

The analysis method used in this study includes multiple linear regression and measurement of demand elasticity to income. The results showed that the price of beef, the price of substitute goods, and the level of consumer income had a significant effect on the demand for beef. Furthermore, separate analysis based on income strata shows that household groups with revenues of less than Rp 2,500,000, income between Rp 2,500,000 to Rp 5,000,000, and revenues above Rp. 5,000,000 have elasticity of beef demand for ≥ 1, which means classified as elastic.

Results

The results of this study show that there is a significant relationship between prices, substitute goods, and consumer income to beef demand. The elasticity of beef demand for household groups with revenues of less than Rp 2,500,000, income between Rp 2,500,000 to Rp 5,000,000, and revenues above Rp. 5,000,000 is ≥ 1, which means classified as elastic. This indicates that beef is seen as a normal item, where demand will increase with the increase in income.

Conclusion

The conclusion of this study shows that there is a significant relationship between prices, substitute goods, and consumer income to beef demand. This research also highlights the importance of understanding consumer behavior in a dynamic social and economic context. For stakeholders in the meat industry, this information can be used to formulate a more effective marketing strategy and consider price variations to attract various levels of society. Thus, a better understanding of income elasticity can help producers and beef distributors in making more appropriate decisions and respond to the needs of consumers in the city of Medan.

Implications

The findings of this study have several implications for the meat industry in Medan. Firstly, the study highlights the importance of understanding consumer behavior in a dynamic social and economic context. This means that producers and beef distributors need to be aware of the changes in consumer income and preferences in order to make informed decisions about their marketing strategies. Secondly, the study shows that the price of beef and the price of substitute goods have a significant effect on consumer decisions in choosing meat. This means that producers and beef distributors need to consider the price variations of beef and substitute goods in order to attract various levels of society.

Recommendations

Based on the findings of this study, several recommendations can be made for the meat industry in Medan. Firstly, producers and beef distributors need to conduct further research on consumer behavior and preferences in order to make informed decisions about their marketing strategies. Secondly, the study suggests that producers and beef distributors need to consider the price variations of beef and substitute goods in order to attract various levels of society. Finally, the study recommends that producers and beef distributors need to develop a more effective marketing strategy that takes into account the changes in consumer income and preferences.

Limitations

This study has several limitations that need to be addressed in future research. Firstly, the study was conducted in a specific region of Medan, which may not be representative of the entire city. Secondly, the study only analyzed the elasticity of consumer income to beef demand and did not consider other factors that may affect consumer behavior. Finally, the study only used a purposive approach and did not use a random sampling method, which may affect the generalizability of the findings.

Future Research Directions

Future research directions for this study include conducting further research on consumer behavior and preferences in order to make informed decisions about marketing strategies. Additionally, future research should consider other factors that may affect consumer behavior, such as demographic characteristics, lifestyle, and cultural background. Finally, future research should use a random sampling method to increase the generalizability of the findings.

Conclusion

In conclusion, this study provides a comprehensive analysis of the demand for beef in the city of Medan. The study highlights the importance of understanding consumer behavior in a dynamic social and economic context and shows that the price of beef and the price of substitute goods have a significant effect on consumer decisions in choosing meat. The study also recommends that producers and beef distributors need to develop a more effective marketing strategy that takes into account the changes in consumer income and preferences.
Frequently Asked Questions (FAQs) about the Analysis of Consumer Income Elasticity to Beef Demand in the City of Medan

Q: What is the main objective of this study? A: The main objective of this study is to analyze the elasticity of consumer income to beef demand in the city of Medan, specifically in Tanjung Mulia Village, Medan Deli District, Medan City.

Q: What is income elasticity? A: Income elasticity is an indicator that illustrates how much changes in demand for an item in line with changes in consumer income. When income elasticity is greater than 1, it shows that the demand for goods is very responsive to changes in income.

Q: What are the factors that affect beef demand in the city of Medan? A: The factors that affect beef demand in the city of Medan include the price of beef, the price of substitute goods, and the level of consumer income.

Q: What is the relationship between prices and beef demand? A: The study shows that the price of beef and the price of substitute goods have a significant effect on consumer decisions in choosing meat. When the price of beef increases, consumers may turn to chicken meat as a more affordable alternative.

Q: What is the elasticity of beef demand for different income strata? A: The study shows that household groups with revenues of less than Rp 2,500,000, income between Rp 2,500,000 to Rp 5,000,000, and revenues above Rp. 5,000,000 have elasticity of beef demand for ≥ 1, which means classified as elastic.

Q: What are the implications of this study for the meat industry in Medan? A: The study highlights the importance of understanding consumer behavior in a dynamic social and economic context. This means that producers and beef distributors need to be aware of the changes in consumer income and preferences in order to make informed decisions about their marketing strategies.

Q: What are the recommendations of this study for the meat industry in Medan? A: The study recommends that producers and beef distributors need to conduct further research on consumer behavior and preferences in order to make informed decisions about their marketing strategies. Additionally, the study suggests that producers and beef distributors need to consider the price variations of beef and substitute goods in order to attract various levels of society.

Q: What are the limitations of this study? A: The study has several limitations, including the fact that it was conducted in a specific region of Medan, which may not be representative of the entire city. Additionally, the study only analyzed the elasticity of consumer income to beef demand and did not consider other factors that may affect consumer behavior.

Q: What are the future research directions for this study? A: Future research directions for this study include conducting further research on consumer behavior and preferences in order to make informed decisions about marketing strategies. Additionally, future research should consider other factors that may affect consumer behavior, such as demographic characteristics, lifestyle, and cultural background.

Q: What are the benefits of understanding income elasticity in the context of beef demand? A: Understanding income elasticity can help producers and beef distributors in making more appropriate decisions and respond to the needs of consumers in the city of Medan. Additionally, it can help stakeholders in the meat industry to formulate a more effective marketing strategy and consider price variations to attract various levels of society.

Q: How can this study be applied in real-world scenarios? A: This study can be applied in real-world scenarios by providing insights into the behavior of consumers in the city of Medan. Additionally, it can help stakeholders in the meat industry to make informed decisions about their marketing strategies and consider price variations to attract various levels of society.