IDEAS home Printed from https://ideas.repec.org/a/wly/agribz/v33y2017i2p226-241.html
   My bibliography  Save this article

Ornamental Plants in the United States: An Econometric Analysis of a Household‐Level Demand System

Author

Listed:
  • Vardges Hovhannisyan
  • Hayk Khachatryan

Abstract

ABSTRACT This study provides an empirical analysis of demand for a large group of ornamental plants using a theory‐based demand model. Specifically, consumer preferences are represented by the Almost Ideal Demand System where allowance is made for demand censoring. Given that revealed‐preference data are usually limited to certain ornamental plants and geographical locations, we exploit unique hypothetical purchase data collected via an online survey regarding 16 annual, perennial, and foliage plants from across the United States. The effect of various socio‐economic and demographic factors on demand for plants is quantified. Our findings indicate that ornamental plants are predominantly price‐elastic with foliage plants being more price‐responsive vis‐a‐vis other plant categories. Further, a majority of plants are expenditure‐elastic with the estimates of foliage plants manifesting the greatest variability. Finally, plants in the same category appear to be closer substitutes. Results benefit ornamental plant industry stakeholders as they determine the best pricing strategies in their specific markets.

Suggested Citation

  • Vardges Hovhannisyan & Hayk Khachatryan, 2017. "Ornamental Plants in the United States: An Econometric Analysis of a Household‐Level Demand System," Agribusiness, John Wiley & Sons, Ltd., vol. 33(2), pages 226-241, April.
    • Handle: RePEc:wly:agribz:v:33:y:2017:i:2:p:226-241
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1002/agr.21488
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Steven T. Yen & Biing-Hwan Lin, 2006. "A Sample Selection Approach to Censored Demand Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(3), pages 742-749.
    2. Vardges Hovhannisyan & Brian W. Gould, 2014. "Structural change in urban Chinese food preferences," Agricultural Economics, International Association of Agricultural Economists, vol. 45(2), pages 159-166, March.
    3. Vardges Hovhannisyan & Brian W. Gould, 2011. "Quantifying the structure of food demand in China: An econometric approach," Agricultural Economics, International Association of Agricultural Economists, vol. 42, pages 1-18, November.
    4. Wales, T. J. & Woodland, A. D., 1983. "Estimation of consumer demand systems with binding non-negativity constraints," Journal of Econometrics, Elsevier, vol. 21(3), pages 263-285, April.
    5. J. Scott Shonkwiler & Steven T. Yen, 1999. "Two-Step Estimation of a Censored System of Equations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 972-982.
    6. 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 365-371, July.
    7. 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.
    8. Maynard, Leigh J. & Hartell, Jason G. & Meyer, A. Lee & Hao, Jianqiang, 2004. "An experimental approach to valuing new differentiated products," Agricultural Economics, Blackwell, vol. 31(2-3), pages 317-325, December.
    9. Abdoul G. Sam & Yi Zheng, 2010. "Semiparametric Estimation of Consumer Demand Systems with Micro Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(1), pages 246-257.
    10. W. Michael Hanemann, 1984. "Welfare Evaluations in Contingent Valuation Experiments with Discrete Responses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(3), pages 332-341.
    11. Pollak, Robert A & Wales, Terence J, 1981. "Demographic Variables in Demand Analysis," Econometrica, Econometric Society, vol. 49(6), pages 1533-1551, November.
    12. repec:ken:wpaper:0901 is not listed on IDEAS
    13. Jayson L. Lusk & Ted C. Schroeder, 2004. "Are Choice Experiments Incentive Compatible? A Test with Quality Differentiated Beef Steaks," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 467-482.
    14. W. Michael Hanemann, 1994. "Valuing the Environment through Contingent Valuation," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 19-43, Fall.
    15. Palma, Marco A. & Hall, Charles R. & Collart, Alba J., 2011. "Repeat Buying Behavior for Ornamental Plants: A Consumer Profile," Journal of Food Distribution Research, Food Distribution Research Society, vol. 42(2), pages 1-11, July.
    16. 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.
    17. Buzby, Jean C. & Fox, John A. & Ready, Richard C. & Crutchfleld, Stephen R., 1998. "Measuring Consumer Benefits of Food Safety Risk Reductions," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 30(1), pages 69-82, July.
    18. Maynard, Leigh J. & Burdine, Kenneth H. & Meyer, A. Lee, 2003. "Market Potential for Locally Produced Meat Products," Journal of Food Distribution Research, Food Distribution Research Society, vol. 34(2), pages 1-12, July.
    19. Jerry Hausman, 2012. "Contingent Valuation: From Dubious to Hopeless," Journal of Economic Perspectives, American Economic Association, vol. 26(4), pages 43-56, Fall.
    20. Steen, Marie, 2006. "Flower Power at the Dutch Flower Auctions? Application of an Inverse Almost Ideal Demand System," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25441, International Association of Agricultural Economists.
    21. Richard Green & Julian M. Alston, 1990. "Elasticities in AIDS Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(2), pages 442-445.
    22. Abdelmagid, Banaga D. & Wohlgenant, Michael K. & Safley, Charles D., 1996. "Demand for Plants Sold in North Carolina Garden Centers," Agricultural and Resource Economics Review, Cambridge University Press, vol. 25(1), pages 28-37, April.
    23. Jordan J. Louviere & Towhidul Islam & Nada Wasi & Deborah Street & Leonie Burgess, 2008. "Designing Discrete Choice Experiments: Do Optimal Designs Come at a Price?," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 35(2), pages 360-375, March.
    24. Lee, Lung-Fei & Pitt, Mark M, 1986. "Microeconometric Demand Systems with Binding Nonnegativity Constraints: The Dual Approach," Econometrica, Econometric Society, vol. 54(5), pages 1237-1242, September.
    25. Bollino, Carlo Andrea, 1987. "Gaids: a generalised version of the almost ideal demand system," Economics Letters, Elsevier, vol. 23(2), pages 199-202.
    26. Arentze, Theo & Borgers, Aloys & Timmermans, Harry & DelMistro, Romano, 2003. "Transport stated choice responses: effects of task complexity, presentation format and literacy," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 39(3), pages 229-244, May.
    27. Diansheng Dong & Brian W. Gould & Harry M. Kaiser, 2004. "Food Demand in Mexico: An Application of the Amemiya-Tobin Approach to the Estimation of a Censored Food System," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(4), pages 1094-1107.
    28. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    29. Abdelmagid, Banaga D. & Wohlgenant, Michael K. & Safley, Charles D., 1996. "Demand For Plants Sold In North Carolina Garden Centers," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 25(1), pages 1-10, April.
    30. Girapunthong, Napaporn & Ward, Ronald W., 2003. "Demand Drivers For Fresh-Cut Flowers And Their Substitutes: An Application Of Household Expenditure Allocation Models," 2003 Annual meeting, July 27-30, Montreal, Canada 22178, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Diksha Sinha & Roopali Sharma, 2024. "Future Research Prospects of Floriculture Industry from Management Perspective: A Bibliometric Analysis Using the SPAR-4-SLR Approach," South Asian Journal of Business and Management Cases, , vol. 13(1), pages 36-53, April.
    2. Hayk Khachatryan & Alicia Rihn & Ben Campbell & Bridget Behe & Charles Hall, 2018. "How do consumer perceptions of “local†production benefits influence their visual attention to state marketing programs?," Agribusiness, John Wiley & Sons, Ltd., vol. 34(2), pages 390-406, March.
    3. Mohammed, Rezgar & Murova, Olga & Chidmi, Benaissa, 2018. "Examining Demand Elasticities for Differentiated Yogurt," 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida 266417, Southern Agricultural Economics Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Meyerhoefer, Chad D. & Ranney, Christine K. & Sahn, David E., 2003. "Consistent Estimation Of Longitudinal Censored Demand Systems: An Application To Transition Country Data," Working Papers 127252, Cornell University, Department of Applied Economics and Management.
    2. Femenia, Fabienne, 2019. "A Meta-Analysis of the Price and Income Elasticities of Food Demand," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 68(2), June.
    3. Golan, Amos & LaFrance, Jeffrey T & Perloff, Jeffrey M. & Seabold, Skipper, 2017. "Estimating a Demand System with Choke Prices," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt4qt9q8vr, Department of Agricultural & Resource Economics, UC Berkeley.
    4. Davis, Christopher G. & Dong, Diansheng & Blayney, Donald P. & Owens, Ashley, 2010. "An Analysis of U.S. Household Dairy Demand," Technical Bulletins 184308, United States Department of Agriculture, Economic Research Service.
    5. Tselepidakis, Elina, 2015. "Food Safety and the Demand for Leafy Greens," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205583, Agricultural and Applied Economics Association.
    6. Davis, Christopher G. & Dong, Diansheng & Blayney, Donald P. & Yen, Steven T. & Stillman, Richard, 2012. "U.S. Fluid Milk Demand: A Disaggregated Approach," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 15(1), pages 1-26, February.
    7. Fadhuile, Adelaide & Lemarie, Stephane & Pirotte, Alain, 2011. "Pesticides Uses in Crop Production: What Can We Learn from French Farmers Practices?," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103654, Agricultural and Applied Economics Association.
    8. Davis, Christopher G. & Blayney, Donald P. & Dong, Diansheng & Yen, Steven T. & Johnson, Rachel J., 2011. "Will Changing Demographics Affect U.S. Cheese Demand?," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 43(2), pages 1-15, May.
    9. Hongbo Liu & Kevin A. Parton & Zhang-Yue Zhou & Rod Cox, 2009. "At-home meat consumption in China: an empirical study ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(4), pages 485-501, October.
    10. Luigi Cembalo & Francesco Caracciolo & Eugenio Pomarici, 2014. "Drinking cheaply: the demand for basic wine in Italy," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(3), pages 374-391, July.
    11. Liu, Hongbo & Parton, Kevin A. & Zhou, Zhang-Yue & Cox, Rod, 2009. "At-home meat consumption in China: an empirical study," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(4), pages 1-17.
    12. Ishdorj, Ariun & Jensen, Helen H., 2010. "Demand For Breakfast Cereals: Whole Grains Guidance And Food Choice," 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany 116445, European Association of Agricultural Economists.
    13. Astrid Jonas & Jutta Roosen, 2008. "Demand for milk labels in Germany: organic milk, conventional brands, and retail labels," Agribusiness, John Wiley & Sons, Ltd., vol. 24(2), pages 192-206.
    14. 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.
    15. Zhuo Chen & Steven Yen, 2005. "On bias correction in the multivariate sample-selection model," Applied Economics, Taylor & Francis Journals, vol. 37(21), pages 2459-2468.
    16. Pablo Gálvez & Petr Mariel & David Hoyos, 2016. "Análisis de la demanda residencial de los servicios básicos en España usando un modelo QUAIDS censurado," Estudios de Economia, University of Chile, Department of Economics, vol. 43(1 Year 20), pages 5-28, June.
    17. Fabrizio balli & Silvia Tiezzi, 2008. "Households Consumption Patterns and Equivalence Scales in Italy: 1997-2004," Department of Economics University of Siena 535, Department of Economics, University of Siena.
    18. Ole Boysen, 2016. "Food Demand Characteristics in Uganda: Estimation and Policy Relevance," South African Journal of Economics, Economic Society of South Africa, vol. 84(2), pages 260-293, June.
    19. Bai, Junfei & Seale Jr, James L. & Wahl, Thomas I., 2020. "Meat demand in China: to include or not to include meat away from home?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(1), January.
    20. Arthur Lewbel & Lars Nesheim, 2019. "Sparse demand systems: corners and complements," Boston College Working Papers in Economics 1005, Boston College Department of Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:agribz:v:33:y:2017:i:2:p:226-241. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.