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Bayesian Estimation of a Censored Linear Almost Ideal Demand System: Food Demand in Pakistan

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  • Panagiotis Kasteridis
  • Steven T. Yen
  • Cheng Fang

Abstract

A censored linear almost ideal demand system for food is estimated with a Bayesian Markov chain Monte Carlo procedure, using a sample of urban households from Pakistan. All own-price elasticities but one are found to be negative, and all total food expenditure elasticities are found to be positive, with a high posterior probability. There is a mix of gross complements and substitutes among the food products, while net substitution is the predominant pattern. Household characteristics play a role in food expenditures, and regional differences exist. These demand elasticities can inform policy deliberations by the national government and international organizations. Copyright 2011, Oxford University Press.

Suggested Citation

  • Panagiotis Kasteridis & Steven T. Yen & Cheng Fang, 2011. "Bayesian Estimation of a Censored Linear Almost Ideal Demand System: Food Demand in Pakistan," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(5), pages 1374-1390.
  • Handle: RePEc:oup:ajagec:v:93:y:2011:i:5:p:1374-1390
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    File URL: http://hdl.handle.net/10.1093/ajae/aar059
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    Cited by:

    1. Ariane Kehlbacher & Richard Tiffin & Adam Briggs & Mike Berners-Lee & Peter Scarborough, 2016. "The distributional and nutritional impacts and mitigation potential of emission-based food taxes in the UK," Climatic Change, Springer, vol. 137(1), pages 121-141, July.
    2. Kasteridis, Panagiotis & Yen, Steven, 2012. "U.S. demand for organic and conventional vegetables: a Bayesian censored system approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 56(3), September.
    3. Lin, Biing-Hwan & Ver Ploeg, Michele & Kasteridis, Panagiotis & Yen, Steven T., 2014. "The roles of food prices and food access in determining food purchases of low-income households," Journal of Policy Modeling, Elsevier, vol. 36(5), pages 938-952.
    4. Bilgic, Abdulbaki & Yen, Steven T., 2013. "Household food demand in Turkey: A two-step demand system approach," Food Policy, Elsevier, vol. 43(C), pages 267-277.
    5. Abdulbaki Bilgic & Steven T. Yen, 2014. "Demand for meat and dairy products by Turkish households: a Bayesian censored system approach," Agricultural Economics, International Association of Agricultural Economists, vol. 45(2), pages 117-127, March.
    6. Widenhorn, Andreas & Salhofer, Klaus, 2014. "Using a Generalized Differenced Demand Model to Estimate Price and Expenditure Elasticities for Milk and Meat in Austria," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 63(2).

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