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An Almost Ideal Demand System for Alcoholic Beverages in British Columbia

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  • Alley, Andrew G
  • Ferguson, Donald G
  • Stewart, Kenneth G

Abstract

An almost ideal demand system for alcoholic beverages in British Columbia is estimated based on five beverage categories. Estimates of the model unrestricted and restricted to satisfy homogeneity and symmetry are presented. The restrictions are tested: as is common in applied demand analysis a number of rejections are encountered, although within equation tests tend to support homogeneity. The rejections which are encountered are not mitigated by the inclusion of dynamic elements. The Slutsky matrix is used to examine the concavity of the expenditure function, which is found to be mildly violated. Marshallian and Hicksian own-, cross-price, and income elasticities are calculated and are found to be largely consistent with previous findings, although some noteworthy results are obtained.

Suggested Citation

  • Alley, Andrew G & Ferguson, Donald G & Stewart, Kenneth G, 1992. "An Almost Ideal Demand System for Alcoholic Beverages in British Columbia," Empirical Economics, Springer, vol. 17(3), pages 401-418.
  • Handle: RePEc:spr:empeco:v:17:y:1992:i:3:p:401-18
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    References listed on IDEAS

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    1. Seale, James & Regmi, Anita & Bernstein, Jason, 2003. "International Evidence on Food Consumption Patterns," Technical Bulletins 184321, United States Department of Agriculture, Economic Research Service.
    2. Brown, Mark G. & Lee, Jonq-Ying, 2000. "A Uniform Substitute Demand Model With Varying Coefficients," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(01), April.
    3. Barten, Anton P, 1993. "Consumer Allocation Models: Choice of Functional Form," Empirical Economics, Springer, pages 129-158.
    4. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, December.
    5. Brown, Mark G. & Lee, Jonq-Ying, 2002. "Restrictions on the Effects of Preference Variables in the Rotterdam Model," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 34(01), pages 17-26, April.
    6. Brown, Mark G. & Lee, Jonq-Ying, 2002. "Restrictions On The Effects Of Preference Variables In The Rotterdam Model," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(01), April.
    7. Brown, Mark G. & Lee, Jong-Yinq, 2000. "A Uniform Substitute Demand Model with Varying Coefficients," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 32(01), pages 1-9, April.
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    Cited by:

    1. Lariviere, Eric & Larue, Bruno & Chalfant, Jim, 2000. "Modeling the demand for alcoholic beverages and advertising specifications," Agricultural Economics, Blackwell, vol. 22(2), pages 147-162, March.
    2. Bruno Larue & Alan Ker & Lorrie Mackinnon, 1991. "The demand for wine in ontario and the phasing-out of discriminatory mark-ups," Agribusiness, John Wiley & Sons, Ltd., vol. 7(5), pages 475-488.
    3. Tomson Ogwang & Danny Cho, 2009. "Economic determinants of the consumption of alcoholic beverages in Canada: a panel data analysis," Empirical Economics, Springer, pages 599-613.
    4. Lariviere, Eric & Larue, Bruno & Chalfant, Jim, 2000. "Modeling the demand for alcoholic beverages and advertising specifications," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 22(2), March.
    5. Diotallevi, Francesco, 2010. "L’analisi della domanda degli oli extravergine d’oliva in Italia Un’applicazione del modello A.I.D.S
      [The analysis of the demand for extra virgin olive oil in Italy An application of the AIDSmodel]
      ," MPRA Paper 41469, University Library of Munich, Germany.

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