The Demand for Wine and Beer
AbstractIn this paper annual data series covering 1955-56 to 1978-79 are used to estimate the elasticity of demand for both wine and beer. These are first estimated using a flexible functional form. The habit formation hypothesis and the role of social and demographic factors are also examined. The demand for wine in aggregate is estimated to be relatively price inelastic in the short run, while in the long run it is relatively price elastic. With respect to income, the demand for wine is shown to be relatively highly elastic. For beer, demand with respect to price and income is found to be relatively inelastic in the short run as well as in the long run. These results can be used to evaluate the impact of changes in patterns of consumption and of government taxation policies on the industry.
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Bibliographic InfoArticle provided by Australian Agricultural and Resource Economics Society in its journal Review of Marketing and Agricultural Economics.
Volume (Year): 51 (1983)
Issue (Month): 02 (August)
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- Savin, N. E. & White, Kenneth J., 1978. "Estimation and testing for functional form and autocorrelation : A simultaneous approach," Journal of Econometrics, Elsevier, vol. 8(1), pages 1-12, August.
- Labys, Walter C., 1976. "An International Comparison Of Price And Income Elasticities For Wine Consumption," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 20(01), April.
- Hogarty, Thomas F & Elzinga, Kenneth G, 1972. "The Demand for Beer," The Review of Economics and Statistics, MIT Press, vol. 54(2), pages 195-98, May.
- Lariviere, Eric & Larue, Bruno & Chalfant, Jim, 2000. "Modeling the demand for alcoholic beverages and advertising specifications," Agricultural Economics, Blackwell, vol. 22(2), pages 147-162, March.
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