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Demand For Breakfast Cereals: Whole Grains Guidance And Food Choice

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  • Ishdorj, Ariun
  • Jensen, Helen H.

Abstract

When using household-level data to examine consumer demand it is common to find that consumers purchase only a subset of the available goods, setting the demand for the remaining goods to zero. Ignoring such censoring of the dependent variables can lead to estimators with poor statistical properties and estimates that lead to poor policy decisions. In this paper we investigate household demand for four types of breakfast cereals, such as whole grain ready-to-eat, non-whole grain ready-to-eat, whole grain hot and non-whole grain hot cereals, using a censored Al- most Ideal Demand System (AIDS) and estimate the parameters of the model via Bayesian methods. Using household level scanner data (ACNielsen Homescan) we find that demand for all types of breakfast cereals is inelastic to changes in prices. The expenditure elasticity is slightly above unity for the whole grain ready-to-eat cereals suggesting that as the expenditure on cereals increases households will allocate proportionally more on whole-grain ready-to-eat cereals and less on other cereals.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists & Agricultural and Applied Economics Association in its series 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany with number 116445.

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Date of creation: 2010
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Handle: RePEc:ags:eaa115:116445

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Related research

Keywords: AIDS model; Bayesian econometrics; censored; cereals; whole grains; Agricultural and Food Policy; Consumer/Household Economics; Demand and Price Analysis; Food Consumption/Nutrition/Food Safety; Food Security and Poverty; Health Economics and Policy; C11; C34; D12;

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  1. Huang, Cliff J & Sloan, Frank A & Adamache, Killard W, 1987. "Estimation of Seemingly Unrelated Tobit Regressions via the EM Algorithm," Journal of Business & Economic Statistics, American Statistical Association, vol. 5(3), pages 425-30, July.
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  6. Buzby, Jean C. & Farah, Hodan A. & Vocke, Gary, 2005. "Will 2005 Be the Year of the Whole Grains?," Brazilian Journal of Rural Economy and Sociology (RESR), Sociedade Brasileira de Economia e Sociologia Rural, June.
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  8. 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, vol. 82(4), pages 1022-1037.
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  10. Diansheng Dong & Brian W. Gould & Harry M. Kaiser, 2004. "Food Demand in Mexico: An Application of the Amemiya-Tobin Approach to the Estimation of a Censored Food System," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(4), pages 1094-1107.
  11. Lee, Lung-Fei & Pitt, Mark M, 1986. "Microeconometric Demand Systems with Binding Nonnegativity Constraints: The Dual Approach," Econometrica, Econometric Society, vol. 54(5), pages 1237-42, September.
  12. 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.
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