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Estimating the Censored Demand for U.S. Cheese Varieties Using Panel Data: Impact of Economic and Demographic Factors

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  • Bouhlal, Yasser
  • Capps, Oral, Jr.
  • Ishdorj, Ariun

Abstract

The United States cheese consumption has grown considerably over the years. Using Nielsen Homescan panel data for calendar years 2005 and 2006, this paper examines the effect of economic and socio-demographic factors on the demand for disaggregated cheese varieties. In this study, we estimated the censored demand for 14 cheese varieties and identified the respective own-price and cross-price elasticities. Also, non-price factors were determined affecting the purchase of each variety as well as the impact of generic dairy advertising. Results revealed that most of the natural cheese varieties have an elastic demand while the processed cheese products exhibited inelastic demands. Strong substitution and complementarity relationships were identified as well, and a two quarter carry-over effect of advertising was observed for most of cheese demands. Results also showed that household demographics affected the demands differently, depending on the nature of the cheese varieties.

Suggested Citation

  • Bouhlal, Yasser & Capps, Oral, Jr. & Ishdorj, Ariun, 2013. "Estimating the Censored Demand for U.S. Cheese Varieties Using Panel Data: Impact of Economic and Demographic Factors," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151298, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea13:151298
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    References listed on IDEAS

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    1. Davis, Christopher G. & Blayney, Donald & Dong, Diansheng & Yen, Steven T. & Johnson, Rachel J., 2011. "Will Changing Demographics Affect U.S. Cheese Demand?," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 43(02), pages 259-273, May.
    2. Giuseppe Bruno, 2004. "Limited dependent panel data models: a comparative analysis of classical and Bayesian inference among econometric packages," Computing in Economics and Finance 2004 41, Society for Computational Economics.
    3. 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.
    4. Brian W. Gould & Jorge Cornick & Thomas Cox, 1994. "Consumer Demand for New Reduced-fat Foods: An Analysis of Cheese Expenditures," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 42(3), pages 367-380, November.
    5. Donghun Kim & Ronald W. Cotterill, 2008. "COST PASS-THROUGH IN DIFFERENTIATED PRODUCT MARKETS: THE CASE OF U.S. PROCESSED CHEESE -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 56(1), pages 32-48, March.
    6. Brian W. Gould & Huei Chin Lin, 1994. "The demand for cheese in the United States: The role of household composition," Agribusiness, John Wiley & Sons, Ltd., vol. 10(1), pages 43-59.
    7. 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.
    8. 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.
    9. Carlos Arnade & Munisamy Gopinath & Daniel Pick, 2008. "Brand Inertia in U.S. Household Cheese Consumption," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(3), pages 813-826.
    10. Min-Hsin Huang & Eugene Jones & David Hahn, 2007. "Determinants of price elasticities for private labels and national brands of cheese," Applied Economics, Taylor & Francis Journals, vol. 39(5), pages 553-563.
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    Cited by:

    1. Debnam, Jakina, 2016. "Selection Effects and Heterogeneous Demand Responses to the Berkeley Soda Tax Vote," 2017 Allied Social Science Association (ASSA) Annual Meeting, January 6-8, 2017, Chicago, Illinois 250110, Agricultural and Applied Economics Association.

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    Keywords

    Demand and Price Analysis; Food Consumption/Nutrition/Food Safety;

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