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The Demand for Sweet Spreads: Demographic and Economic Effects for Detailed Commodities

Published online by Cambridge University Press:  10 May 2017

Dale Heien  and
Lois Schertz Willett
Dale Heien
Affiliation:
University of California, Davis
Lois Schertz Willett
Affiliation:
University of California, Davis
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Abstract

In this paper we estimate the price and income elasticities for five sweet spreads using a two-stage budgeting procedure. The first stage modeled the consumer's budget decision as a Tobit model, where total sweet spread expenditures are based on income and demographic variables. The second stage, including only those households with nonzero first stage expenditures, was treated as a standard consumer allocation problem using the AIDS model. To incorporate population demographics, the AIDS model was expanded by specifying the constant term as a linear function of demographic variables. The coefficients for the prices and expenditures are highly significant and demand is elastic for all five goods. The most significant demographic effects are due to household size, and female food shopper. The theoretical restrictions of homogeneity and symmetry were tested and rejected for the complete system.

Type
Articles
Information
Northeastern Journal of Agricultural and Resource Economics , Volume 15 , Issue 2 , October 1986 , pp. 160 - 167
Copyright
Copyright © 1986 Northeastern Agricultural and Resource Economics Association 

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Footnotes

Authorship is shared equally. This is a Giannini Foundation Research Paper No. 808.

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