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Household Demand for Food in Switzerland. A Quadratic Almost Ideal Demand System

  • Awudu Abdulai

In this paper we estimate a complete demand system for Switzerland, with emphasis on food demand, using a recent household expenditure survey. The Quadratic Almost Ideal Demand System (QUAIDS) is employed in the analysis of six food commodity and a non-food groups. The quadratic terms in the QUAIDS were found to be empirically important in describing household budget behaviour in Switzerland. For most food commodity groups, demand is inelastic, with elasticities ranging between -0.64 and -1.02. Cross-price elasticities are very low, suggesting limited possibilities of substitution between food groups. All food groups are found to be necessities, while the non-food group is a luxury. The estimated own-price and expenditure elasticities from the specification on groups segmented by income show that for most food commodities, own-price (absolutely) and expenditure elasticities are consistently higher for the lower income group.

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Article provided by Swiss Society of Economics and Statistics (SSES) in its journal Swiss Journal of Economics and Statistics.

Volume (Year): 138 (2002)
Issue (Month): I (March)
Pages: 1-18

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Handle: RePEc:ses:arsjes:2002-i-1
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  1. Lewbel, Arthur, 1991. "The Rank of Demand Systems: Theory and Nonparametric Estimation," Econometrica, Econometric Society, vol. 59(3), pages 711-30, May.
  2. Banks, James & Blundell, Richard & Lewbel, Arthur, 1996. "Tax Reform and Welfare Measurement: Do We Need Demand System Estimation?," Economic Journal, Royal Economic Society, vol. 106(438), pages 1227-41, September.
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  4. Awudu Abdulai & Devendra K. Jain & Ashok K. Sharma, 1999. "Household Food Demand Analysis in India," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(2), pages 316-327.
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  7. Filippini, Massimo, 1995. "Swiss residential demand for electricity by time-of-use," Resource and Energy Economics, Elsevier, vol. 17(3), pages 281-290, November.
  8. Blundell, Richard & Pashardes, Panos & Weber, Guglielmo, 1993. "What Do We Learn About Consumer Demand Patterns from Micro Data?," American Economic Review, American Economic Association, vol. 83(3), pages 570-97, June.
  9. Browning, Martin & Meghir, Costas, 1991. "The Effects of Male and Female Labor Supply on Commodity Demands," Econometrica, Econometric Society, vol. 59(4), pages 925-51, July.
  10. James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
  11. D Moro & P Sckokai, 2000. "Heterogeneous preferences in household food consumption in Italy," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 27(3), pages 305-323, September.
  12. Pollak, Robert A & Wales, Terence J, 1978. "Estimation of Complete Demand Systems from Household Budget Data: The Linear and Quadratic Expenditure Systems," American Economic Review, American Economic Association, vol. 68(3), pages 348-59, June.
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