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

  • 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)

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.

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File URL: http://hdl.handle.net/10.1002/agr.20015
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Article provided by John Wiley & Sons, Ltd. in its journal Agribusiness.

Volume (Year): 20 (2004)
Issue (Month): 3 ()
Pages: 309-321

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Handle: RePEc:wly:agribz:v:20:y:2004:i:3:p:309-321
Contact details of provider: Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297

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  1. Schmit, Todd M. & Dong, Diansheng & Chung, Chanjin & Kaiser, Harry M. & Gould, Brian W., 2002. "Identifying The Effects Of Generic Advertising On The Household Demand For Fluid Milk And Cheese: A Two-Step Panel Data Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(01), July.
  2. Kenkel, Don, 1990. "Consumer Health Information and the Demand for Medical Care," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 587-95, November.
  3. Raunikar, Robert & Huang, Chung-Liang, 1984. "Characteristics of Fluid Milk Expenditure Patterns in the Northeast Region," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 13(1:), April.
  4. Huang, Chung L. & Raunikar, Robert, 1983. "Household Fluid Milk Expenditure Patterns In The South And United States," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 15(02), December.
  5. Federico Perali & Jean-Paul Chavas, 2000. "Estimation of Censored Demand Equations from Large Cross-Section Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 1022-1037.
  6. Vassilis A. Hajivassiliou & Daniel L. McFadden & Paul Ruud, 1993. "Simulation of Multivariate Normal Rectangle Probabilities and their Derivatives: Theoretical and Computational Results," Working Papers _024, Yale University.
  7. Heien, Dale & Wessells, Cathy Roheim, 1990. "Demand Systems Estimation with Microdata: A Censored Regression Approach," Journal of Business & Economic Statistics, American Statistical Association, vol. 8(3), pages 365-71, July.
  8. Amemiya, Takeshi, 1974. "Multivariate Regression and Simultaneous Equation Models when the Dependent Variables Are Truncated Normal," Econometrica, Econometric Society, vol. 42(6), pages 999-1012, November.
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