IDEAS home Printed from https://ideas.repec.org/a/spr/empeco/v57y2019i4d10.1007_s00181-018-1491-y.html
   My bibliography  Save this article

Efficiency of correction for sample selection in QUAIDS models: an example for the fish demand in Germany

Author

Listed:
  • Julia Bronnmann

    (Christian-Albrechts-University Kiel, Institute of Economics)

  • Stefan Guettler

    (Christian-Albrechts-University Kiel, Institute of Agricultural Economics)

  • Jens-Peter Loy

    (Christian-Albrechts-University Kiel, Institute of Agricultural Economics)

Abstract

This paper investigates the performance of the Quadratic Almost Ideal Demand System (QUAIDS) with and without accounting for the consistent two-step estimation for censoring of the dependent variable as well as the use of quality-adjusted prices. The demand systems are estimated for a commodity that has a relatively low consumption level in the German market, fish. Thus, the zero observations are quite high and the need of a correction procedure is more urgent. The results show differences in the applied methods. It turns out that ignoring consistent two-step estimation and quality-adjusted prices leads to less elastic demand estimates.

Suggested Citation

  • Julia Bronnmann & Stefan Guettler & Jens-Peter Loy, 2019. "Efficiency of correction for sample selection in QUAIDS models: an example for the fish demand in Germany," Empirical Economics, Springer, vol. 57(4), pages 1469-1493, October.
    • Handle: RePEc:spr:empeco:v:57:y:2019:i:4:d:10.1007_s00181-018-1491-y
    DOI: 10.1007/s00181-018-1491-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00181-018-1491-y
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00181-018-1491-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rémy Lambert & Bruno Larue & Clément Yélou & George Criner, 2006. "Fish and meat demand in Canada: Regional differences and weak separability," Agribusiness, John Wiley & Sons, Ltd., vol. 22(2), pages 175-199.
    2. José Alberto Molina, 1997. "Two-stage Budgeting as an Economic Decision-making Process for Spanish Consumers," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 18(1), pages 27-31.
    3. Jinghua Xie & Henry W. Kinnucan & Oystein Myrland, 2009. "Demand elasticities for farmed salmon in world trade," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 36(3), pages 425-445, September.
    4. Henneberry, Shida Rastegari & Piewthongngam, Kullapapruk & Qiang, Han, 1999. "Consumer Food Safety Concerns And Fresh Produce Consumption," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(1), pages 1-16, July.
    5. J. Scott Shonkwiler & Steven T. Yen, 1999. "Two-Step Estimation of a Censored System of Equations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 972-982.
    6. Edgerton, David L., 1993. "On The Estimation Of Separable Demand Models," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 18(2), pages 1-6, December.
    7. Steven T. Yen & Biing-Hwan Lin & David M. Smallwood, 2003. "Quasi- and Simulated-Likelihood Approaches to Censored Demand Systems: Food Consumption by Food Stamp Recipients in the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 458-478.
    8. Barnett, William A. & Serletis, Apostolos, 2008. "Consumer preferences and demand systems," Journal of Econometrics, Elsevier, vol. 147(2), pages 210-224, December.
    9. Heien, Dale & Wessells, Cathy Roheim, 1990. "Demand Systems Estimation with Microdata: A Censored Regression Approach," Journal of Business & Economic Statistics, American Statistical Association, vol. 8(3), pages 365-371, July.
    10. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    11. James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
    12. Okrent, Abigail M. & Alston, Julian M., 2011. "Demand for Food in the United States: A Review of Literature, Evaluation of Previous Estimates, and Presentation of New Estimates of Demand," Monographs, University of California, Davis, Giannini Foundation, number 251908, December.
    13. H. S. Houthakker, 1952. "Compensated Changes in Quantities and Qualities Consumed," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 19(3), pages 155-164.
    14. H. Theil, 1952. "Qualities, Prices and Budget Enquiries," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 19(3), pages 129-147.
    15. Max Nielsen & Jos Smit & Jordi Guillen, 2009. "Market Integration of Fish in Europe," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(2), pages 367-385, June.
    16. Julia Bronnmann & Jens-Peter Loy & Karen J. Schroeder, 2016. "Characteristics of Demand Structure and Preferences for Wild and Farmed Seafood in Germany: An Application of QUAIDS Modeling with Correction for Sample Selection," Marine Resource Economics, University of Chicago Press, vol. 31(3), pages 281-300.
    17. Blundell, Richard & Pashardes, Panos & Weber, Guglielmo, 1993. "What Do We Learn About Consumer Demand Patterns from Micro Data?," American Economic Review, American Economic Association, vol. 83(3), pages 570-597, June.
    18. Ecker, Olivier & Qaim, Matin, 2011. "Analyzing Nutritional Impacts of Policies: An Empirical Study for Malawi," World Development, Elsevier, vol. 39(3), pages 412-428, March.
    19. Brian P. Poi, 2008. "Demand-system estimation: Update," Stata Journal, StataCorp LP, vol. 8(4), pages 554-556, December.
    20. Dey, Madan Mohan & Garcia, Yolanda T. & Kumar, Praduman & Piumsombun, Somying & Haque, Muhammad Sirajul & Li, Luping & Radam, Alias & Senaratne, Athula & Khiem, Nguyen Tri & Koeshendrajana, Sonny, 2008. "Demand for fish in Asia: a cross-country analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(3), pages 1-18.
    21. Thiele, Silke, 2008. "Elastizitäten der Nachfrage privater Haushalte nach Nahrungsmitteln – Schätzung eines AIDS auf Basis der Einkommens- und Verbrauchsstichprobe 2003," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 57(05), pages 1-11.
    22. Zheng, Zhihao & Henneberry, Shida Rastegari, 2010. "An Analysis of Food Grain Consumption in Urban Jiangsu Province of China," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 42(2), May.
    23. Awudu Abdulai, 2002. "Household Demand for Food in Switzerland. A Quadratic Almost Ideal Demand System," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 138(I), pages 1-18, March.
    24. Thiele, Silke, 2001. "Ausgaben- und Preiselastizitäten der Nahrungsmittelnachfrage auf Basis von Querschnittsdaten: Eine Systemschätzung für die Bundesrepublik Deutschland," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 50(02), pages 1-8.
    25. Lewbel, Arthur, 1991. "The Rank of Demand Systems: Theory and Nonparametric Estimation," Econometrica, Econometric Society, vol. 59(3), pages 711-730, May.
    26. Shabbar Jaffry & Sean Pascoe & Catherine Robinson, 1999. "Long run price flexibilities for high valued UK fish species: a cointegration systems approach," Applied Economics, Taylor & Francis Journals, vol. 31(4), pages 473-481.
    27. John L. Park & Oral Capps, 1997. "Demand for Prepared Meals by U.S. Households," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 814-824.
    28. David L. Edgerton, 1997. "Weak Separability and the Estimation of Elasticities in Multistage Demand Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(1), pages 62-79.
    29. Julia Bronnmann & Isaac Ankamah-Yeboah & Max Nielsen, 2016. "Market Integration between Farmed and Wild Fish: Evidence from the Whitefish Market in Germany," Marine Resource Economics, University of Chicago Press, vol. 31(4), pages 421-432.
    30. X.M. Gao & Eric J. Wailes & Gail L. Cramer, 1996. "A Two-Stage Rural Household Demand Analysis: Microdata Evidence from Jiangsu Province, China," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 604-613.
    31. Wildner, S. & Cramon-Taubadel, S.v., 2000. "Die Bedeutung von Veränderungen der Nachfrage für die Wettbewerbsfähigkeit des Agrarsektors: erste Ergebnisse einer neuen Nachfrageschätzung," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 36.
    32. Lau, Lawrence J., 1986. "Functional forms in econometric model building," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 3, chapter 26, pages 1515-1566, Elsevier.
    33. Thomas L. Cox & Michael K. Wohlgenant, 1986. "Prices and Quality Effects in Cross-Sectional Demand Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(4), pages 908-919.
    34. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    35. Steven Yen & Kamhon Kan & Shew-Jiuan Su, 2002. "Household demand for fats and oils: two-step estimation of a censored demand system," Applied Economics, Taylor & Francis Journals, vol. 34(14), pages 1799-1806.
    36. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762.
    37. Diansheng Dong & J.S. Shonkwiler & Oral Capps, 1998. "Estimation of Demand Functions Using Cross-Sectional Household Data: The Problem Revisited," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 466-473.
    38. Cuma Akbay & Ismet Boz & Wen S. Chern, 2007. "Household food consumption in Turkey," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 34(2), pages 209-231, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Joselin Segovia & Mercy Orellana & Juan Pablo Sarmiento & Darwin Carchi, 2020. "The effects of taxing sugar-sweetened beverages in Ecuador: An analysis across different income and consumption groups," PLOS ONE, Public Library of Science, vol. 15(10), pages 1-18, October.
    2. Kira Lancker & Julia Bronnmann, 2022. "Substitution Preferences for Fish in Senegal," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(4), pages 1015-1045, August.
    3. Zhai, Tianchang & Li, Lei & Wang, Jingjing & Si, Wei, 2022. "Will the consumption tax on sugar-sweetened beverages help promote healthy beverage consumption? Evidence from urban China," China Economic Review, Elsevier, vol. 73(C).
    4. Lancker, Kira & Bronmann, Julia, 2020. "Quantifying consumers’ love for marine biodiversity," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304214, Agricultural and Applied Economics Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kira Lancker & Julia Bronnmann, 2022. "Substitution Preferences for Fish in Senegal," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(4), pages 1015-1045, August.
    2. Lancker, Kira & Bronmann, Julia, 2020. "Quantifying consumers’ love for marine biodiversity," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304214, Agricultural and Applied Economics Association.
    3. Gould, Brian W. & Dong, Diansheng, 2004. "Product Quality And The Demand For Food: The Case Of Urban China," 2004 Annual meeting, August 1-4, Denver, CO 20010, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Andrej Cupák & Peter Tóth, 2017. "Measuring the Efficiency of VAT reforms: Evidence from Slovakia," Working and Discussion Papers WP 6/2017, Research Department, National Bank of Slovakia.
    5. Ole Boysen, 2016. "Food Demand Characteristics in Uganda: Estimation and Policy Relevance," South African Journal of Economics, Economic Society of South Africa, vol. 84(2), pages 260-293, June.
    6. Thiele Silke, 2010. "Erhöhung der Mehrwertsteuer für Lebensmittel: Budget- und Wohlfahrtseffekte für Konsumenten / Increase of the Value Added Tax (VAT): Budget- and Welfare- Effects for Consumers," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(1), pages 115-130, February.
    7. Thiele, Silke, 2008. "Elastizitäten der Nachfrage privater Haushalte nach Nahrungsmitteln – Schätzung eines AIDS auf Basis der Einkommens- und Verbrauchsstichprobe 2003," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 57(05), pages 1-11.
    8. Javier García-Enríquez & Cruz A. Echevarría, 2016. "Consistent Estimation of a Censored Demand System and Welfare Analysis: The 2012 VAT Reform in Spain," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(2), pages 324-347, June.
    9. Peter Tóth & Andrej Cupák & Marian Rizov, 2021. "Measuring the efficiency of VAT reforms: a demand system simulation approach," Oxford Economic Papers, Oxford University Press, vol. 73(3), pages 1218-1243.
    10. Javier García-Enríquez & Cruz A. Echevarría, 2018. "Demand for culture in Spain and the 2012 VAT rise," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 42(3), pages 469-506, August.
    11. Renner, Sebastian & Lay, Jann & Schleicher, Michael, 2017. "The Effects of Energy Price Changes: Heterogeneous Welfare Impacts, Energy Poverty, and CO2 Emissions in Indonesia," GIGA Working Papers 302, GIGA German Institute of Global and Area Studies.
    12. Marian Rizov & Andrej Cupak & Jan Pokrivcak, 2015. "Food security and household consumption patterns in Slovakia," LICOS Discussion Papers 36015, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    13. A. Montini, 1999. "I consumi alimentari delle famiglie italiane: un modello per le decisioni di consumo extradomestico utilizzando i microdati di spesa familiare," Working Papers 364, Dipartimento Scienze Economiche, Universita' di Bologna.
    14. Asfaw, Solomon & Cattaneo, Andrea & Pallante, Giacomo & Palma, Alessandro, 2017. "Improving the efficiency targeting of Malawi's farm input subsidy programme: Big pain, small gain?," Food Policy, Elsevier, vol. 73(C), pages 104-118.
    15. Pokrivcak, Jan & Cupak, Andrej & Rizov, Marian, 2015. "Household food security and consumption patterns in Central and Eastern Europe: the Case of Slovakia," 2015 Fourth Congress, June 11-12, 2015, Ancona, Italy 207287, Italian Association of Agricultural and Applied Economics (AIEAA).
    16. Vu, Linh Hoang, 2012. "Estimation Of Food Demand In Vietnam," MPRA Paper 94801, University Library of Munich, Germany.
    17. Jing Cao, Mun S. Ho, and Huifang Liang, 2016. "Household energy demand in Urban China: Accounting for regional prices and rapid income change," The Energy Journal, International Association for Energy Economics, vol. 0(China Spe).
    18. Richard Ochmann, 2014. "Differential income taxation and household asset allocation," Applied Economics, Taylor & Francis Journals, vol. 46(8), pages 880-894, March.
    19. Luigi Cembalo & Francesco Caracciolo & Eugenio Pomarici, 2014. "Drinking cheaply: the demand for basic wine in Italy," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(3), pages 374-391, July.
    20. Femenia, Fabienne, 2019. "A Meta-Analysis of the Price and Income Elasticities of Food Demand," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 68(2), June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:empeco:v:57:y:2019:i:4:d:10.1007_s00181-018-1491-y. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.