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Micro-Demand Systems Analysis of Non-Alcoholic Beverages in the United States: An Application of Econometric Techniques Dealing With Censoring

Author

Listed:
  • Alviola, Pedro A. IV
  • Capps, Oral Jr.
  • Wu, Ximing

Abstract

A censored Almost Ideal Demand System (AIDS) and a Quadratic Almost Ideal Demand System (QUAIDS) were estimated in modeling non-alcoholic beverages. Five estimation techniques were used, including the conventional Iterated Seemingly Unrelated Regression (ITSUR), two-stage methods such as the Heien and Wessells (1990) and the Shonkwiler and Yen (1999) approaches, the generalized maximum entropy method and the Amemiya-Tobin framework of Dong, Gould and Kaiser (2004). Our results based on various specifications and estimation techniques are quantitatively similar and indicate that price elasticity estimates have a greater variability in more highly censored non-alcoholic beverage items such as tea, coffee and bottled water as opposed to less censored non-alcoholic beverage items such as carbonated softdrinks, milk and fruit juices.

Suggested Citation

  • Alviola, Pedro A. IV & Capps, Oral Jr. & Wu, Ximing, 2009. "Micro-Demand Systems Analysis of Non-Alcoholic Beverages in the United States: An Application of Econometric Techniques Dealing With Censoring," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 60462, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea10:60462
    DOI: 10.22004/ag.econ.60462
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    Cited by:

    1. Nicoletta Berardi & Patrick Sevestre & Marine Tépaut & Alexandre Vigneron, 2016. "The impact of a ‘soda tax’ on prices: evidence from French micro data," Applied Economics, Taylor & Francis Journals, vol. 48(41), pages 3976-3994, September.
    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 119885, Southern Agricultural Economics Association.

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