Estimating per capita consumption function for Local Sheep Meat in Riyadh City

the main objective of this study is to analyze the local sheep meet consumption pattern in Riyadh City, Saudi Arabia to obtain economic indicators that will help policy makers in production and imports policy decisions. The study relied on cross section data, which was collected using questionnaire form. The sample size was 117 local sheep meat consumers in Riyadh city. Engel curve model was estimated for households and per capita consumption function. The marginal propensity to consume and expenditure elasticity were estimated. The results showed the significant effects household monthly income on the level of monthly expenditure on local sheep meat. The moderate level of estimated R2 implied that there are other factors affecting expenditure pattern. These factors are mainly social customs, such as parties and luxury banquets. Estimated income expenditure elasticity and marginal propensity to expenditure vary with consumer monthly income. Therefore Local sheep meat behaves as luxury good in low-income groups (less than SR 835), semi-luxury good when income less than SR2000 and necessary good for consumers within the income category more than SR2000 where it necessity increase with income increasing. Decreasing of marginal propensity to expenditure with income increase indicates that the low-income groups will increase their expenditure on sheep meat at a higher rate than medium and higher income group