Elasticities of Demand for Food: An Analysis Using Non-Additive Utility Functions Allowing for Habit Formation

Manser, Marilyn E.

doi:10.2307/1056349

Cited by 58 publications

(20 citation statements)

References 14 publications

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“…'For durables the state variable can be interpreted as the beginning stock of the good, and in that case /l is expected to have a negative sign. 40ther approaches exist to incorporate habit formation in consumption (Pollak and Wales, 1969;Christensen, 1975;Manser, 1976). In these approaches certain parameters are specified as a function of the consumption of goods in a previous period.…”

Section: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Decmentioning

confidence: 99%

The demand for salmon in France: the effects of marketing and structural change

Bjørndal¹,

Salvanes

Andreassen³

1992

Applied Economics

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Section: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Decmentioning

confidence: 99%

The demand for salmon in France: the effects of marketing and structural change

Bjørndal¹,

Salvanes

Andreassen³

1992

Applied Economics

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“…The impact of habit formation is incorporated into an indirect translog utility function (Manser 1976) by specifying that certain of the parameters depend upon past consumption. The ai in the current specification can be assumed to depend linearly on consumption in the immediately preceding period:…”

Section: Ij Ji'mentioning

confidence: 99%

Assessing the Effectiveness of Fluid Milk Advertising in Ontario

Goddard¹,

Tielu²

1988

Canadian J Agri Economics

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Advertising is a marketing tool used to a significant degree by the Ontario Milk Marketing Board. In this research, the effectiveness of the advertising campaign is evaluated using a time-series demand system model of the cold, nonalcoholic beverage market in Ontario.The results of the analysis suggest that increasing advertising expenditure on fluid milk would increase fluid milk revenue net of advertising costs to the dairy industry. Fluid milk demand is little affected by advertising of other goods in the market but does affect the demand for other beverages.La publicit6 est un outil de commercialisation amplement utilist par ]'Office de la Commercialisation du Lait de ]'Ontario. Cette ttude utilise un systkme de demande bast sur des donntes chronologiques des breuvages non alcoolists en Ontario, afin d'tvaluer I'efficacitt de la campagne publicitaire sur le lait de consommation.Les r6sultats de I'analyse montrent que I'augmentation des dtpenses publicitaires sur le lait de consommation augmenteraient le revenu net de I'industrie laitihre. La demande de lait nature est peu affectte par la publicitt sur les autres biens sur le marcht, mais elle affecte la demande des autres breuvages.Advertising fluid milk for the purpose of increasing sales of fluid milk in Ontario has been one of the main tools in the Ontario Milk Marketing Board's (OMMB) market expansion program.Sales of fluid milk in Ontario increased slowly in the early 1970s; this was often attributed to advertising, as price was virtually constant in real terms. In the late 1970s and early 198Os, fluid milk sales fell in Ontario; at the same time, annual advertising expenditures on fluid milk soared to more than $4 million from about $250,000 in the early 1970s.Most of the advertising was aimed at capturing an increased share of the market for cold, nonalcoholic beverages. It was hoped that young adults and teenagers, supposedly consuming beverages other than fluid milk, would be influenced by advertising into consuming fluid milk. This assumption was based on the fact that, while sales for fluid milk were declining, total sales for the market were

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“…Thus where m i is the depreciation rate for 'memory' for the corresponding meat type. Other simpler specifications and corresponding estimation procedures are discussed by Pollak and Wales (1969) and Manser (1976). These are designed to facilitate their estimation by standard methods.…”

Section: A Dynamic Linear Expenditure Systemmentioning

confidence: 99%

Demand for Meat in South Africa: A Non‐additive Dynamic Linear Expenditure Model

Uys

1986

South African J Economics

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IN THIS PAPER a non-additive dynamically varying version of the Stone-Geary utility function is proposed. Dynamic demand functions are derived by maximizing this utility function subject to an expenditure constraint. Habit formation by the consumer is taken into account. The demand functions obtained are ,estimated for each of the four meat types consumed in South Africa, viz. beef, mutton, pork and chicken. Analysis of the results indicates that in order to estimate the demand for meat in South Africa, it is necessary to utilize consumption data broken down according to population group. The standard double-log demand model for meat consumption in South Africa is of the form where i = 1, ..., 4 corresponds to beef, mutton, pork and chicken respectively; ci is the annual per capita consumption of meat type i (kg); k i is a constant; p i is the deflated annual weighted average retail price of all cuts of meat type i (rands per kg); e ij is the elasticity of demand for meat of type i with respect to the price of meat of type j; l is the deflated annual per capita income (rands); b i is the income elasticity for meat of type i.To avoid multicollinearity and autocorrelation in such a model, sophisticated econometric techniques are required. Unfortunately, results achieved to date by various researchers (Broom, 1964;Hancock, 1983), who have attempted this estimation, have not been entirely satisfactory. In particular, certain of the elasticities obtained have incorrect signs. More important, neither Broom nor Hancock was able to obtain reliable estimates for the demand function for mutton. The assumption that the various elasticities are constant over an extended period of time probably accounts for this failure. There have been substantial changes, however, in the consumption patterns of meat over the past three decades. The per capita consumption of beef has declined from 35,5 kg in 1948/50 to 22,3 kg in 1980/81, a drop of 37 per cent on the 1948/49 consumption. SAJE v54(2) p208Pork and mutton have shown similar trends, with consumption falling by 22 per cent and 35 per cent respectively. The consumption of chicken, on the other hand, has increased by a dramatic 458 per cent (Abstract of Agricultural Statistics, 1983). Such large shifts in consumption must surely be accompanied by significant changes in the demand functions. Consumers have become accustomed to higher levels of consumption of chicken, and have grown to accept lower levels of consumption of beef and mutton. The market for meat at the beginning of this period differed from that for the end of the period. Just as the markets for meat in the USA and Australia display different characteristics, as measured by elasticities, it can be expected that the respective elasticities for the demand for meat in South Africa today should be different from what they were three decades ago. Hancock (1983) detected that a change in the demand functions had indeed taken place.A dynamic model appears to be called for. The alternative to using some modification of an ad ho...

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Elasticities of Demand for Food: An Analysis Using Non-Additive Utility Functions Allowing for Habit Formation

Cited by 58 publications

References 14 publications

The demand for salmon in France: the effects of marketing and structural change

The demand for salmon in France: the effects of marketing and structural change

Assessing the Effectiveness of Fluid Milk Advertising in Ontario

Demand for Meat in South Africa: A Non‐additive Dynamic Linear Expenditure Model

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