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Conditional and unconditional food demand elasticities in a dynamic multistage demand system

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  • Stathis Klonaris
  • David Hallam

Abstract

This paper estimates conditional and unconditional demand elasticities in a three stage analysis of consumer demand for food and non-food items in Greece. A dynamic version of the AIDS model is specified and estimated, and full system misspecification tests applied. Correction formulas for price and expenditure elasticities are used to calculate unconditional elasticities from conditional demand sub-systems. All food items rank as price inelastic. Deviations between the calculated conditional and unconditional price and expenditure elasticities are found to be significant, demonstrating the importance of correcting conditional elasticities before they can be used for policy purposes or welfare analyses.

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  • Stathis Klonaris & David Hallam, 2003. "Conditional and unconditional food demand elasticities in a dynamic multistage demand system," Applied Economics, Taylor & Francis Journals, vol. 35(5), pages 503-514.
    • Handle: RePEc:taf:applec:v:35:y:2003:i:5:p:503-514
    DOI: 10.1080/00036840210148058
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    1. Blanciforti, Laura Ann & Green, Richard D. & King, Gordon A., 1986. "U.S. Consumer Behavior over the Postwar Period: An Almost Ideal Demand System Analysis," Monographs, University of California, Davis, Giannini Foundation, number 11939.
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    17. Shashika D. Rathnayaka & Saroja Selvanathan & E. A. Selvanathan, 2021. "Demand for animal‐derived food in selected Asian countries: A system‐wide analysis," Agricultural Economics, International Association of Agricultural Economists, vol. 52(1), pages 97-122, January.
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