Short-Run Demand Relationships in the U.S. Fats and Oils Complex
AbstractFats and oils play a prominent role in U.S. dietary patterns. Recent concerns over the negative health consequences associated with fats and oils have led many to suspect structural change in demand conditions. Our analysis considers short run (monthly) demand relationships for edible fats and oils. In that monthly quantities of fats and oils are likely to be relatively fixed, an inverse almost ideal demand system specification is used. A smooth transition function is used to model a switching inverse almost ideal demand system that assesses short-run demand conditions for edible fats and oils in the United States. The results suggest that short-run demand conditions for fats and oils experienced a gradual structural shift that began in the late 1980s or early 1990s and persisted into the mid-1990s. Although this shift generally made price flexibilities more elastic, differences in scale flexibilities across regimes were modest in most cases. The results suggest that decreases in marginal valuations for most fats and oils in response to consumption increases are rather small. Scale flexibilities are relatively close to -1, suggesting near homothetic preferences for fats and oils.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Southern Agricultural Economics Association in its journal Journal of Agricultural and Applied Economics.
Volume (Year): 35 (2003)
Issue (Month): 01 (April)
fats and oils; inverse demand system; structural change; Q0; D1;
Other versions of this item:
- Goodwin, Barry K. & Harper, Daniel C. & Schnepf, Randall D., 2000. "Short-Run Demand Relationships In The U.S. Fats And Oils Complex," 2000 Conference, April 17-18 2000, Chicago, Illinois 18942, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
- Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
- D1 - Microeconomics - - Household Behavior
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- E. W. Goddard & S. Glance, 1989. "Demand for Fats and Oils in Canada, United States and Japan," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 37(3), pages 421-443, November.
- Hicks, J. R., 1986. "A Revision of Demand Theory," OUP Catalogue, Oxford University Press, number 9780198285502, October.
- Ray, Ranjan, 1984. "A dynamic generalisation of the almost ideal demand system," Economics Letters, Elsevier, vol. 14(2-3), pages 235-239.
- Holt, Matthew T & Goodwin, Barry K, 1997. "Generalized Habit Formation in an Inverse Almost Ideal Demand System: An Application to Meat Expenditures in the U.S," Empirical Economics, Springer, vol. 22(2), pages 293-320.
- Moschini, GianCarlo & Meilke, Karl D., 1989. "Modeling the Pattern of Structural Change in U.S. Meat Demand," Staff General Research Papers 11266, Iowa State University, Department of Economics.
- Tsurumi, Hiroki & Wago, Hajime & Ilmakunnas, Pekka, 1986. "Gradual switching multivariate regression models with stochastic cross-equational constraints and an application to the Klem translog production model," Journal of Econometrics, Elsevier, vol. 31(3), pages 235-253, April.
- Hoanjae Park & Walter N. Thurman, 1999. "On Interpreting Inverse Demand Systems: A Primal Comparison of Scale Flexibilities and Income Elasticities," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 950-958.
- Eales, James S. & Unnevehr, Laurian J., 1994. "The inverse almost ideal demand system," European Economic Review, Elsevier, vol. 38(1), pages 101-115, January.
- Matthew T. Holt & Joseph V. Balagtas, 2009.
"Estimating Structural Change with Smooth Transition Regressions: An Application to Meat Demand,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 91(5), pages 1424-1431.
- Holt, Matthew T. & Balagtas, Joseph V., 2009. "Estimating Structural Change with Smooth Transition Regressions: an Application to Meat Demand," MPRA Paper 15331, University Library of Munich, Germany.
- Asche, Frank & Zhang, Dengjun, 2013. "Testing Structural Changes in the U.S. Whitefish Import Market: An Inverse Demand System Approach," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 42(3), December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.