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An inverse demand analysis with introduction of quality effects: an application to Spanish consumption of fruit and vegetables

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  • Emilio Galdeano

Abstract

This article analyzes consumer preference for fruit and vegetables when, by using time series with socioeconomic characteristics of households, there can be seemingly unobserved quality effects, which are increased by aggregation. The changes in Spanish demand for fresh and processed fruit and vegetables over the period 1987–2000 are discussed. Following previous tests and analyses, quantities are taken as predetermined and prices as matching the offer conditions. Thus, quality effects (based on the nutritional and/or health value of the product) are estimated from the error terms associated with the functions of the unit values. Quality variables are introduced as taste shifters in the inverse demand system (Laitinen–Theil model). The results show the positive effects of quality differences on the normalized price for the group of products through own‐quality flexibilities, and the negative effects between fresh and processed products through cross‐quality flexibilities.

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  • Emilio Galdeano, 2005. "An inverse demand analysis with introduction of quality effects: an application to Spanish consumption of fruit and vegetables," Agricultural Economics, International Association of Agricultural Economists, vol. 33(2), pages 163-177, September.
    • Handle: RePEc:bla:agecon:v:33:y:2005:i:2:p:163-177
    DOI: 10.1111/j.1574-0862.2005.00190.x
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    1. Banerjee, Anindya & Dolado, Juan J. & Galbraith, John W. & Hendry, David, 1993. "Co-integration, Error Correction, and the Econometric Analysis of Non-Stationary Data," OUP Catalogue, Oxford University Press, number 9780198288107, Decembrie.
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    Cited by:

    1. Xin Su & Haolong Liu & Shunqi Hou, 2018. "The Trilateral Evolutionary Game of Agri-Food Quality in Farmer-Supermarket Direct Purchase: A Simulation Approach," Complexity, Hindawi, vol. 2018, pages 1-11, February.
    2. Pérez-Mesa, Juan Carlos & Sanchez-Fernández, Raquel & Serrano-Arcos, Mar, 2019. "Measuring the impact of crises in the horticultural sector: The case of Spain," MPRA Paper 119854, University Library of Munich, Germany.
    3. Ariel Soto‐Caro & Feng Wu & Tian Xia & Zhengfei Guan, 2023. "Demand analysis with structural changes: Model and application to the US blueberry market," Agribusiness, John Wiley & Sons, Ltd., vol. 39(4), pages 1100-1116, October.
    4. Mireille N. Honoré & Luis J. Belmonte-Ureña & Asensio Navarro-Velasco & Francisco Camacho-Ferre, 2019. "Profit Analysis of Papaya Crops under Greenhouses as an Alternative to Traditional Intensive Horticulture in Southeast Spain," IJERPH, MDPI, vol. 16(16), pages 1-22, August.
    5. repec:uta:papers:2014_01 is not listed on IDEAS

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