6.1.2. Demand Factors
While supply can be estimated by looking at production statistics and current inventories, demand is much more difficult to quantify. One can compile statistics on the number of acres of a certain crop that have already been planted, but statistics are not available as to consumers’ expectations. Even if they were, consumers can change their expectations at no cost to themselves if conditions change, whereas producers cannot plough up their crop and plant another.
Nevertheless, demand estimates may be derived from historical consumption and price data. The impact on demand of the various factors that influence it may also be estimated statistically. Some of the more important of these factors are described below.
Population size. Population growth will increase consumer demand for many products, particularly products such as food items that are a staple in people’s lives.
Consumer tastes. Consumer tastes change with the introduction of new information or of new products. Concerns about cholesterol and saturated fats in people’s diets have caused demand for beef to fall in recent years, while the use of corn as a biofuel ha