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The demand for home-produced and imported alcoholic beverages in Cyprus: the AIDS approach

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  • Andreas Andrikopoulos
  • John Loizides

Abstract

The purpose of this paper is to investigate the demand and its composition between home-produced and imported for alcoholic beverages in Cyprus. The methodological approach used is the Almost Ideal Demand System (AIDS), both in static and dynamic terms. Empirically, the AIDS, both in its static and dynamic version, was estimated using time-series (1970-1992) for three sets of data which include: (1) alcoholic beverages (wine-beer-other brandies) broken down between home-produced and imported (model A); (2) alcoholic beverages only without disaggregation between home-produced and imported (model B), and (3) aggregate alcoholic beverages (wine-beer-other brandies) and food (model C). Zellner's iterative estimation procedure was used for estimating the model. The empirical findings: (1) strongly support the dynamic version of the AIDS over its static alternative; and (2) provide certain guidelines concerning economic policies relating to an increase in government revenues and changing the composition between home-produced and imported consumption of alcoholic beverages. These basic findings could be considered relevant to the policy makers in the light of Cyprus' accession to the EU.

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  • Andreas Andrikopoulos & John Loizides, 2000. "The demand for home-produced and imported alcoholic beverages in Cyprus: the AIDS approach," Applied Economics, Taylor & Francis Journals, vol. 32(9), pages 1111-1119.
    • Handle: RePEc:taf:applec:v:32:y:2000:i:9:p:1111-1119
    DOI: 10.1080/000368400404254
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    Cited by:

    1. Omura, Makiko, 2014. "The Effects of Tax Policy on Alcoholic Beverage Trends and Alcohol Demand in Japan," 88th Annual Conference, April 9-11, 2014, AgroParisTech, Paris, France 170487, Agricultural Economics Society.
    2. Murali Adhikari & Laxmi Paudel & Krishna Paudel & Jack Houston & James Bukenya, 2007. "Impact of low carbohydrate information on vegetable demands in the United States," Applied Economics Letters, Taylor & Francis Journals, vol. 14(13), pages 939-944.
    3. Bartkus Algirdas, 2019. "The Impact of Excise Tax Increases on Ethyl Alcohol Sales in Lithuania," Ekonomika (Economics), Sciendo, vol. 98(2), pages 55-75, December.
    4. James Fogarty, 2010. "The Demand For Beer, Wine And Spirits: A Survey Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 24(3), pages 428-478, July.

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    More about this item

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco

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