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Demand for nonalcoholic beverages: The case of low-income households

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Author Info

  • Steven T. Yen

    (Department of Agricultural Economics, University of Tennessee, Knoxville, TN 37996-4518. E-mail: syen@utk.edu)

  • Biing-Hwan Lin

    (Economic Research Service, U.S. Department of Agriculture, 1800 M Street NW, Washington, DC 20036. E-mail: blin@ers.usda.gov)

  • David M. Smallwood

    (Economic Research Service, U.S. Department of Agriculture, 1800 M Street NW, Washington, DC 20036. E-mail: dsmallwd@ers.usda.gov)

  • Margaret Andrews

    (Economic Research Service, U.S. Department of Agriculture, 1800 M Street NW, Washington, DC 20036. E-mail: mandrews@ers.usda.gov)

Abstract

Household beverage consumption is investigated using data from the National Food Stamp Program Survey conducted in the United States. A censored Translog demand system is estimated with the full-information maximum-likelihood procedure. All own-price effects are negative and significant, and whole milk, reduced-fat milk, juice, coffee, and tea are found to be net substitutes for soft drink. Thus, prices provide a partial answer to the declining consumption of milk and rising consumption of soft drink. Nutrition information and dietary beliefs also play important roles, highlighting the importance of an effective nutrition education program directed toward the low-income households. [JEL citation: C34 (Truncated and Censored Models), D12 (Consumer Economics: Empirical), Q18 (Agricultural Policy; Food Policy).] © 2004 Wiley Periodicals, Inc. Agribusiness 20: 309-321, 2004.

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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Agribusiness.

Volume (Year): 20 (2004)
Issue (Month): 3 ()
Pages: 309-321

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Handle: RePEc:wly:agribz:v:20:y:2004:i:3:p:309-321

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Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297

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  1. Heien, Dale & Wessells, Cathy Roheim, 1990. "Demand Systems Estimation with Microdata: A Censored Regression Approach," Journal of Business & Economic Statistics, American Statistical Association, American Statistical Association, vol. 8(3), pages 365-71, July.
  2. Huang, Chung L. & Raunikar, Robert, 1983. "Household Fluid Milk Expenditure Patterns In The South And United States," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, Southern Agricultural Economics Association, vol. 15(02), December.
  3. Federico Perali & Jean-Paul Chavas, 2000. "Estimation of Censored Demand Equations from Large Cross-Section Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 82(4), pages 1022-1037.
  4. Amemiya, Takeshi, 1974. "Multivariate Regression and Simultaneous Equation Models when the Dependent Variables Are Truncated Normal," Econometrica, Econometric Society, Econometric Society, vol. 42(6), pages 999-1012, November.
  5. Vassilis A. Hajivassiliou & Daniel L. McFadden & Paul Ruud, 1993. "Simulation of Multivariate Normal Rectangle Probabilities and their Derivatives: Theoretical and Computational Results," Working Papers, Yale University _024, Yale University.
  6. Raunikar, Robert & Huang, Chung-Liang, 1984. "Characteristics of Fluid Milk Expenditure Patterns in the Northeast Region," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, Northeastern Agricultural and Resource Economics Association, vol. 13(1:), April.
  7. Schmit, Todd M. & Dong, Diansheng & Chung, Chanjin & Kaiser, Harry M. & Gould, Brian W., 2002. "Identifying The Effects Of Generic Advertising On The Household Demand For Fluid Milk And Cheese: A Two-Step Panel Data Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, Western Agricultural Economics Association, vol. 27(01), July.
  8. Kenkel, Don, 1990. "Consumer Health Information and the Demand for Medical Care," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 587-95, November.
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Cited by:
  1. Matthew Harding & Michael Lovenheim, 2014. "The Effect of Prices on Nutrition: Comparing the Impact of Product- and Nutrient-Specific Taxes," NBER Working Papers 19781, National Bureau of Economic Research, Inc.
  2. Alamo, Carmen I. & Malaga, Jaime E., 2012. "Coffee Differentiation: Demand Analysis at Retail Level in the US Market," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama, Southern Agricultural Economics Association 119885, Southern Agricultural Economics Association.
  3. Xiaoou Liu & Rigoberto Lopez, 2012. "Evidence of rational addiction to carbonated soft drinks?," China Agricultural Economic Review, Emerald Group Publishing, Emerald Group Publishing, vol. 4(3), pages 300-317, October.
  4. Xiaoou, Liu, 2009. "Rational Addiction Evidence From Carbonated Soft Drinks," 2009 Conference, August 16-22, 2009, Beijing, China, International Association of Agricultural Economists 51620, International Association of Agricultural Economists.
  5. Dharmasena, Senarath & Capps, Oral, Jr., 2014. "Unraveling Demand for Dairy-Alternative Beverages in the United States: The Case of Soymilk," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, Northeastern Agricultural and Resource Economics Association, vol. 43(1), April.
  6. Zheng, Yuqing & Kaiser, Harry M., 2008. "Advertising and U.S. Nonalcoholic Beverage Demand," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, Northeastern Agricultural and Resource Economics Association, vol. 37(2), October.
  7. Dharmasena, Senarath & Capps, Oral, Jr., 2009. "Demand Interrelationships of At-Home Nonalcoholic Beverage Consumption in the United States," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin, Agricultural and Applied Economics Association 49443, Agricultural and Applied Economics Association.
  8. Lin, Biing-Hwan & Smith, Travis A. & Lee, Jonq-Ying, 2010. "Effects of Taxing Sugar-Sweetened Beverage and Subsidizing Milk: Beverage Consumption, Nutrition, and Obesity among US Children," 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany, European Association of Agricultural Economists;Agricultural and Applied Economics Association 116448, European Association of Agricultural Economists;Agricultural and Applied Economics Association.
  9. Huang, Lu & Liu, Yizao, 2013. "The Effect of Consumer Learning Behavior on the Rising Bottled Water Consumption," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C., Agricultural and Applied Economics Association 150217, Agricultural and Applied Economics Association.

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