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Demand for nonalcoholic beverages: The case of low-income households

Author

Listed:
  • Steven T. Yen

    (Department of Agricultural Economics, University of Tennessee, Knoxville, TN 37996-4518. E-mail: syen@utk.edu)

  • Biing-Hwan Lin

    (Economic Research Service, U.S. Department of Agriculture, 1800 M Street NW, Washington, DC 20036. E-mail: blin@ers.usda.gov)

  • David M. Smallwood

    (Economic Research Service, U.S. Department of Agriculture, 1800 M Street NW, Washington, DC 20036. E-mail: dsmallwd@ers.usda.gov)

  • Margaret Andrews

    (Economic Research Service, U.S. Department of Agriculture, 1800 M Street NW, Washington, DC 20036. E-mail: mandrews@ers.usda.gov)

Abstract

Household beverage consumption is investigated using data from the National Food Stamp Program Survey conducted in the United States. A censored Translog demand system is estimated with the full-information maximum-likelihood procedure. All own-price effects are negative and significant, and whole milk, reduced-fat milk, juice, coffee, and tea are found to be net substitutes for soft drink. Thus, prices provide a partial answer to the declining consumption of milk and rising consumption of soft drink. Nutrition information and dietary beliefs also play important roles, highlighting the importance of an effective nutrition education program directed toward the low-income households. [JEL citation: C34 (Truncated and Censored Models), D12 (Consumer Economics: Empirical), Q18 (Agricultural Policy; Food Policy).] © 2004 Wiley Periodicals, Inc. Agribusiness 20: 309-321, 2004.

Suggested Citation

  • Steven T. Yen & Biing-Hwan Lin & David M. Smallwood & Margaret Andrews, 2004. "Demand for nonalcoholic beverages: The case of low-income households," Agribusiness, John Wiley & Sons, Ltd., vol. 20(3), pages 309-321.
    • Handle: RePEc:wly:agribz:v:20:y:2004:i:3:p:309-321
    DOI: 10.1002/agr.20015
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    References listed on IDEAS

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    1. Harding, Matthew & Lovenheim, Michael, 2017. "The effect of prices on nutrition: Comparing the impact of product- and nutrient-specific taxes," Journal of Health Economics, Elsevier, vol. 53(C), pages 53-71.
    2. Anurag Sharma & Katharina Hauck & Bruce Hollingsworth & Luigi Siciliani, 2014. "The Effects Of Taxing Sugar‐Sweetened Beverages Across Different Income Groups," Health Economics, John Wiley & Sons, Ltd., vol. 23(9), pages 1159-1184, September.
    3. Senarath Dharmasena & Oral Capps, 2012. "Intended and unintended consequences of a proposed national tax on sugar‐sweetened beverages to combat the U.S. obesity problem," Health Economics, John Wiley & Sons, Ltd., vol. 21(6), pages 669-694, June.
    4. Jing Li & Edward C. Jaenicke & Tobenna D. Anekwe & Alessandro Bonanno, 2018. "Demand for ready‐to‐eat cereals with household‐level censored purchase data and nutrition label information: A distance metric approach," Agribusiness, John Wiley & Sons, Ltd., vol. 34(4), pages 687-713, October.
    5. Xiaoou, Liu, 2009. "Rational Addiction Evidence From Carbonated Soft Drinks," 2009 Conference, August 16-22, 2009, Beijing, China 51620, International Association of Agricultural Economists.
    6. Huang, Lu & Liu, Yizao, 2013. "The Effect of Consumer Learning Behavior on the Rising Bottled Water Consumption," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150217, Agricultural and Applied Economics Association.
    7. Zheng, Yuqing & Kaiser, Harry M., 2008. "Advertising and U.S. Nonalcoholic Beverage Demand," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 37(2), pages 1-13.
    8. Xiaoou Liu & Rigoberto Lopez, 2012. "Evidence of rational addiction to carbonated soft drinks?," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 4(3), pages 300-317, August.
    9. Alamo, Carmen I. & Malaga, Jaime E., 2012. "Coffee Differentiation: Demand Analysis at Retail Level in the US Market," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119885, Southern Agricultural Economics Association.
    10. Michael Fesseha Yohannes & Toshinobu Matsuda, 2016. "Weather Effects on Household Demand for Coffee and Tea in Japan," Agribusiness, John Wiley & Sons, Ltd., vol. 32(1), pages 33-44, January.
    11. Dharmasena, Senarath & Capps, Oral, 2014. "Unraveling Demand for Dairy-Alternative Beverages in the United States: The Case of Soymilk," Agricultural and Resource Economics Review, Cambridge University Press, vol. 43(1), pages 140-157, April.
    12. Lin, Biing-Hwan & Smith, Travis A. & Lee, Jonq-Ying, 2010. "Effects of Taxing Sugar-Sweetened Beverage and Subsidizing Milk: Beverage Consumption, Nutrition, and Obesity among US Children," 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany 116448, European Association of Agricultural Economists.
    13. Kim, GwanSeon & Zheng, Yuqing, 2017. "U.S. Non-alcoholic Beverage Demand: Evidence from AIDS Model with Dynamic Effect," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 35(1), April.
    14. Dharmasena, Senarath & Capps, Oral, Jr., 2009. "Demand Interrelationships of At-Home Nonalcoholic Beverage Consumption in the United States," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49443, Agricultural and Applied Economics Association.
    15. Heng, Yan & House, Lisa, 2016. "A Composite Demand Analysis for the Beverage Market," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235704, Agricultural and Applied Economics Association.
    16. Gabe, Todd, 2008. "Fiscal and Economic Impacts of Beverage Excise Taxes Imposed by Maine Public Law 629," MPRA Paper 66888, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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