A Demand Analysis of the Korean Wine Market Using an Unrestricted Source Differentiated LA/AIDS Model

Abstract

An unrestricted source differentiated LA/AIDS model was used to estimate Korean wine demand. In doing so, this study tested the null hypotheses of product aggregation, block separability and substitutability. The test results show that the unrestricted source differentiated model is significantly different from the aggregated model, separated model, and restricted source differentiated model at the conventional level. By using this system-wide model, this study estimated price and expenditure elasticities to identify the price effect on Korean wine consumption. (JEL Classification: F10, F11, F13)

Chinese import demand for wine: evidence from econometric estimations

“…Carew et al (2004) and Lee et al (2008) applied it to the wine market; the former estimated the demand for domestic and imported table wine in British Columbia (Canada), while the latter analysed the South Korean import demand for wine.…”

“…In previous studies, Lee et al (2008) investigated the import market of South Korea, dividing wine by colour, but at the expense of the distinction between bulk and bottled wine; Carew et al (2004) analysed the imports of British Colombia (Canada) by the retail scanner data supplied by the monopoly divided by colour. Recently, Muhammad et al (2014) estimated the Chinese demand for imported bottled wine using the absolute price version of the Rotterdam demand system.…”

“…In considering the characteristics of the market, this research proposes a different wine categorisation to the previous studies of Carew et al (2004) and Lee et al (2008), and the inclusion of seasonal and socio-economic variables.…”

An Empirical Investigation of Interproduct Relationships Between Domestic and Imported Seafood in the U.S.

“…The obtained quantity and price data represent an actual quantity amount (i.e., kilograms) and actual price (i.e., $/kg). Before using these actual data in both cointegration and structural analysis, we normalize price and quantity data by following the method as suggested by Lee and Kennedy (2009). The descriptive statistics for both the normalized budget share and quantity are summarized in Table 1.…”

“…Because such elasticities can be obtained through a system of inverse demand equations rather than a single equation model, structural analyses would be required. Previous studies have developed the various specifications of inverse demand systems (Lee and Kennedy, 2008). These inverse demand systems have often been used to estimate quantity elasticities so as to assist in the identification of substitutability among seafood (Eales, Durham, and Wessells, 1997;Park, Thurman, and Easley, 2004).…”