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Using Almost Ideal Demand System To Analyze Demand For Shrimp In Us Food Market

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  • Zhou, Xia “Vivian”

Abstract

This paper analyzes the demand for shrimp along with beef, pork, and chicken in the US food market, which contributes much to predicting supply strategies, consumer preferences and policy making. It focuses on the own and cross elasticity relationship between the expenditure share, price, and expenditure changes. An Almost Ideal Demand System (AIDs) model and two alternative specifications (both nonlinear AIDs and LA-AIDs) are used to estimate a system of expenditure share equations for ocean shrimp, penaeid shrimp, beef, pork, and chicken. Empirical results from nonlinear AIDs model is compared with those from LA-AIDs model. There are quite a few inconsistency between nonlinear and LA results. Results from nonlinear are more expected and more complied with microeconomic theory than those from LA. Also, results indicated that some insignificant slope coefficients and inappropriate signs of them did not comply with microeconomic theory. This could be caused by heteroscedasticity, autocorrelation, a limitation in the data used, or shrimp is a quite different commodity.

Suggested Citation

  • Zhou, Xia “Vivian”, 2015. "Using Almost Ideal Demand System To Analyze Demand For Shrimp In Us Food Market," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 3(3), pages 1-16, July.
    • Handle: RePEc:ags:ijfaec:208848
    DOI: 10.22004/ag.econ.208848
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    References listed on IDEAS

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