U.S. Consumer Demand for Plant-Based Milk Alternative Beverages: Hedonic Metric Augmented Barten’s Synthetic Model

Consumers in the U.S. increasingly prefer plant-based milk alternative beverages (abbreviated “plant milk”) to conventional milk. This study is motivated by the need to take into consideration varied nutritional and qualitative attributes in plant milk to examine consumers’ purchasing behavior and estimate demand elasticities which are achieved by a new approach combing hedonic pricing model with Barten’s synthetic demand system. The method of estimation is enlightened from the common practice of companies differentiating their products in multidimensions in terms of attributes. A research dataset was uniquely created by associating the products’ purchase data from Nielsen Homescan dataset with exclusive first-hand nutritional data. Estimations began with creating a multidimensional hedonic attribute space based on the qualitative information of different types of plant milk and conventional milk available to consumers and then calculating the hedonic distances by Euclidean distance measurement to reparametrize Barten’s synthetic demand system. Estimation results showed that the highest own-price elasticity pertained to soy milk which was −0.25. Three plant milk types had inelastic demand. Soy milk exerted substituting effects on all types of conventional milk products and vice versa. Soy milk, rice milk and almond milk entertained complementary relationships between each other and four types of conventional milk were strong substitutes within the group.

A nutritional goods and a complete consumer demand system estimation for South Africa using actual price data

Empirical analysis of South African indirect tax policy reform and the welfare consequences of such reform has been limited by a lack of reliable consumer demand system estimations. One reason for potentially unreliable demand estimations is not using actual price data in estimation. In this paper, the results of a nutritional goods demand system estimation and a complete demand system estimation are reported. Both systems were estimated with the use of the quadratic almost ideal demand system (QUAIDS) model incorporating demographic variables and using actual price and expenditure data. Subsequent to estimations, expenditure, own and cross-price elasticities of demand were calculated for both demand systems. The coefficients estimated provided largely statistical significant results and all elasticities calculated seem plausible in sign and magnitude.

The Consumption Expenditure of Households in Turkey: Demand System Estimation with Pseudo Panel Data

In this study, micro data sets obtained by 2005 and 2009 Household Budget Surveys compiled by Turkish Statistical Institute were used to estimate the parameters of household consumption demand and calculate the income-demand elasticities of consumer goods. Total expenditures of the households in this data set delivered into the following 12 different categories of goods and services. The expenditure share of these different categories of goods and services is the dependent variable of this model. In addition, the total household expenditure, the squared total household expenditure, the household size adjusted in accordance with the OECD equivalence scale and the logarithms of squared household size are the independent variables used in the study. The Seemingly Unrelated Regression Equations (SURE) is used to estimate the Quadratic Almost Ideal Demand System (QAIDS) so as to determine the demand parameters of the main commodity groups. The principal result of the study is that the consumption elasticities of the food and nonalcoholic beverages, housing, water, electricity, fuel, clothing and footwear, furniture and house appliances, communications, alcoholic beverages, cigarette and tobacco expenditure are less than 1. Therefore, it can be said that these commodity groups are considered to be mandatory goods. On the other hand, the consumption elasticities of the health, transportation, education services, entertainment and culture, restaurants, hotels, patisseries are more than 1. Thus, these commodity groups are considered to be luxury goods. In this regard, the study concludes that Turkey is considered to be a developing country in terms of the consumption characteristics.

Constrained Utility Maximization and Demand System Estimation

This article provides an overview of the literature on consumer and demand system analysis with emphasis on complete food demand systems. It presents theoretical foundations, constrained utility maximization, properties, and general demand restrictions. It discusses dual functions, including the expenditure function, the indirect utility function, and the distance function. The first three dual approaches are standard tools of the applied demand system analyst. Then it introduces the issue of welfare effects and integrability along with separability and aggregation. The article also provides a review of functional forms and covers econometric issues that include estimation, inference and hypothesis testing, specification tests, and other empirical issues. Models of the almost ideal demand and inverse systems as well as some additional hypothesis tests and inferences regarding model performance are estimated and reported.