ANNUAL AND QUARTERLY ANALYSES AND PROGNOSES OF THE GERMAN MARKET CONSUMPTION OF LETTUCE
The demand estimations of the past are finally used for making future demand predictions. The target years for the projections are 1975/76 and 1980/81. Future values required for real income and population figures are arrived at by extrapolation of constant annual growth percentages. With regard to the real prices and price relations, it is assumed that they will remain constant. This supposition imposes a restriction, but it seems to be justified by the long-term price development of vegetables in the past.
The main findings of the study can be summarized as follows:
- The per caput consumption of lettuce is mainly determined by the per caput income and direct price influence, as expected from economic theory.
- All attempts at additional introduction of further explanatory variables into the demand equations, especially introduction of prices of products supposed to be competitive, proved to be a failure and brought about either only very small or no rises in the multiple determination of consumption. Consequently, it does not appear worthwhile to enter into a discussion here on the regression results obtained in such alternative test analyses.
- Income and price elasticities-in each case derived from a two-fold regression calculation-differ considerably both vertically as to time and horizontally as to season.
- The signs of both elasticities correspond rather well with the framework provided by the consumption theory, positive income elasticities being for once combined with negative price elasticities.
- The quantitative demand for lettuce is more greatly determined by per caput income than by the price, not only throughout the year, but also in each seasonal section (with the exception of the 1st quarter).
- In order to prepare demand projections within the framework of economic planning it is, therefore, of special and essential interest to know what is likely to be the influence of rising incomes on lettuce consumption.