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The demand behavior of consumers in Peru: a demographic analysis using the QUAIDS

Author

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  • JosÈ Alberto Molina
  • Ana Isabel Gil

    (University of Zaragoza, Spain
    University of Zaragoza, Spain)

Abstract

This paper models the demand behaviour of consumers in Peru. To that end, we estimate a demographic version of the Quadratic Almost Ideal Demand System (QUAIDS) using one Peruvian cross-section from 1997. Our results indicate first that the rank two AIDS model is rejected in favour of the rank three demographic QUAIDS model. Secondly, the income elasticities reveal that Transport and Leisure are luxury goods, whilst Tobacco, Health and Miscellaneous Goods are found to be necessities. Our policy recommendations indicate that policy makers should not focus exclusively on economic variables. Rather, it is similarly important to define social policies (education, health, Ö) that harmoniously redistributes income, as well as to improve their efficiency in such a way that the individual becomes more productive.

Suggested Citation

  • JosÈ Alberto Molina & Ana Isabel Gil, 2005. "The demand behavior of consumers in Peru: a demographic analysis using the QUAIDS," Journal of Developing Areas, Tennessee State University, College of Business, vol. 39(1), pages 191-206, September.
    • Handle: RePEc:jda:journl:vol.39:year:2005:issue1:pp:109-206
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    Citations

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    Cited by:

    1. Echeverría, Lucía & Molina, José Alberto, 2021. "Poor vs Non-Poor Households in Uruguay: Welfare Differences from Food Price Changes," GLO Discussion Paper Series 890, Global Labor Organization (GLO).
    2. Gutierrez-Lythgoe, Antonio, 2023. "Demanda energética residencial en España: Una aplicación del modelo QUAIDS [Residential energy demand in Spain: An application of the QUAIDS model]," MPRA Paper 120229, University Library of Munich, Germany.
    3. Claver Sanz, Raúl, 2022. "La transmisión intergeneracional de educación: evidencia en América Latina (1870 – 2010) [The Intergenerational Transmission of Education: Evidence from Latin America (1870 - 2010)]," MPRA Paper 111434, University Library of Munich, Germany.
    4. Boldova Marzo, Daniel Miguel, 2022. "Análisis de la acumulación y distribución de la riqueza [Analysis of capital accumulation and weatlh distribution]," MPRA Paper 113582, University Library of Munich, Germany.
    5. Andres Silva & Senarath Dharmasena, 2016. "Considering seasonal unit root in a demand system: an empirical approach," Empirical Economics, Springer, vol. 51(4), pages 1443-1463, December.
    6. Bayu Kharisma & Armida S. Alisjahbana & Sutyastie Soemitro Remi & Putri Praditya, 2020. "Application of the Quadratic Almost Ideal Demand System (QUAIDS) Model in the Demand of the Household Animal Sourced Food in West Java," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(1), March.
    7. Tite Ehuitché Beke, 2017. "Analysis of Substitute Products in the Demand for Food Products in Côte d'Ivoire," Working Papers 330, African Economic Research Consortium, Research Department.
    8. Braha, Kushtrim & Cupak, Andrej & Qineti, Artan & Pokrivcak, Jan, 2018. "Food Demand System in Transition Economies: Evidence from Kosovo," 162nd Seminar, April 26-27, 2018, Budapest, Hungary 272050, European Association of Agricultural Economists.
    9. Surabhi Mittal, 2010. "Application of the Quaids Model to the Food Sector in India," Journal of Quantitative Economics, The Indian Econometric Society, vol. 8(1), pages 42-54, January.
    10. Abiodun Elijah Obayelu & V.O. Okoruwa & O.I.Y. Ajani, 2009. "Cross‐sectional analysis of food demand in the North Central, Nigeria," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 1(2), pages 173-193, January.
    11. Olorunfemi Sola, 2013. "Demand for food in Ondo state, Nigeria: Using quadratic almost ideal demand system," E3 Journal of Business Management and Economics., E3 Journals, vol. 4(1), pages 001-019.
    12. garcia, juan manuel & alvarado enciso, alfredo, 2018. "Estimación de elasticidades de demanda de bienes y servicios en Perú mediante los métodos AIDS y QUAIDS [Estimating demand elasticities of goods and services in Peru using the AIDS and QUAIDS metho," MPRA Paper 89282, University Library of Munich, Germany.

    More about this item

    Keywords

    Demand Behavior; Consumers; Peru; QUAIDS;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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