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The Demand For Sweet Spreads: Demographic And Economic Effects For Detailed Commodities

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  • Helen, Dale
  • Willett, Lois Schertz

Abstract

In this paper we estimate the price and income elasticities for five sweet spreads using a two-stage budgeting procedure. The first stage modeled the consumer's budget decision as a Tobit model, where total sweet spread expenditures are based on income and demographic variables. The second stage, including only those households with nonzero first stage expenditures, was treated as a standard consumer allocation problem using the AIDS model. To incorporate population demographics, the AIDS model was expanded by specifying the constant term as a linear function of demographic variables. The coefficients for the prices and expenditures are highly significant and demand is elastic for all five goods. The most significant demographic effects are due to household size, and female food shopper. The theoretical restrictions of homogeneity and symmetry were tested and rejected for the complete system.

Suggested Citation

  • Helen, Dale & Willett, Lois Schertz, 1986. "The Demand For Sweet Spreads: Demographic And Economic Effects For Detailed Commodities," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 15(2), pages 1-8, October.
    • Handle: RePEc:ags:nejare:29054
    DOI: 10.22004/ag.econ.29054
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    References listed on IDEAS

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    5. Byron, R P, 1970. "The Restricted Aitken Estimation of Sets of Demand Relations," Econometrica, Econometric Society, vol. 38(6), pages 816-830, November.
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    7. Oral Capps & John R. Tedford & Joseph Havlicek, 1985. "Household Demand for Convenience and Nonconvenience Foods," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(4), pages 862-869.
    8. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, October.
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    Cited by:

    1. Jeon, Younghyeon & Hoang, Hoa K. & Thompson, Wyatt & Abler, David & Miller, J. Isaac, 2022. "Revealing the fundamental parameters of a food demand system using estimated elasticities," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322182, Agricultural and Applied Economics Association.
    2. Yun Fong Lim & Yunzeng Wang & Yue Wu, 2015. "Consignment Contracts with Revenue Sharing for a Capacitated Retailer and Multiple Manufacturers," Manufacturing & Service Operations Management, INFORMS, vol. 17(4), pages 527-537, October.
    3. Bergtold, Jason S. & Peterson, Everett B., 2005. "Introducing Asymmetric Separability in the FAST Multistage Demand System," 2005 Annual meeting, July 24-27, Providence, RI 19497, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Gould, Brian W. & Cox, Thomas L. & Perali, Frederico, 1989. "Determinants of the Demand for Food Fats and Oils: The Role of Demographic Variables and Government Donations," Staff Papers 200486, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.

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