A Global Demand Analysis of Vegetable Oils for Food and Industrial Use: A Cross Country Panel Data Analysis with Spatial Econometrics
This article analyzes global demand for major edible and non edible vegetable oils using cross country panel data from 1991 to 2011. A fixed effects model, accounting for spatial dependence of the residuals, is specified. Compared to food use, income elasticities are significantly higher for industrial use, suggesting that demand for non edible vegetable oils is expected to increase with the rise of global wealth in the future. Income elasticities will be useful for simulation research of estimating how much agricultural land needs to be developed in the future in order to meet an expected increase in demand for biofuel feedstocks.