Hostname: page-component-586b7cd67f-g8jcs Total loading time: 0 Render date: 2024-11-29T05:37:48.709Z Has data issue: false hasContentIssue false
  • English
  • Français

Factors Influencing Changes in Potato and Potato Substitute Demand

Published online by Cambridge University Press:  15 September 2016

T.J. Richards ,
A. Kagan  and
X.M. Gao
T.J. Richards
Affiliation:
School of Agribusiness and Resource Management, Arizona State University
A. Kagan
Affiliation:
School of Agribusiness and Resource Management, Arizona State University
X.M. Gao
Affiliation:
School of Agribusiness and Resource Management, Arizona State University
Get access

Abstract

Despite the rapid rise in complex carbohydrate consumption over the last twenty-five years, fresh potato consumption has fallen by over 50%. Fresh potato growers and retailers alike need to know whether these changes reflect consumer responses to changing relative prices or incomes, or whether they are due to changes in consumer tastes. This paper uses a linear approximation almost ideal demand system (LA/AIDS) to investigate the effect of relative prices, expenditures, and a set of socioeconomic variables on complex carbohydrate demand. Estimation results show that the socioeconomic variables explain some of the changes in demand, but a significant amount remains as evidence of a change in consumer tastes.

Type
Articles
Information
Agricultural and Resource Economics Review , Volume 26 , Issue 1 , April 1997 , pp. 52 - 66
Copyright
Copyright © 1997 Northeastern Agricultural and Resource Economics Association 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Anderson, G., and Blundell, R. 1983. “Testing Restrictions in a Flexible Dynamic Demand System: An Application to Consumers’ Expenditure in Canada.” Review of Economic Studies 50: 397–410.Google Scholar
Alston, J., and Chalfant, J. 1991. “Can We Take the Con Out of Meat Demand Studies?” Western Journal of Agricultural Economics 16: 36–48.Google Scholar
Alston, J., and Chalfant, J. 1993. “The Silence of the Lambdas: A Test of the Almost Ideal and Rotterdam Models.” American Journal of Agricultural Economics 75: 304–13.Google Scholar
Atkins, F.J., Kerr, W., and McGivern, D.B. 1989. “A Note on Structural Change in Canadian Beef Demand.” Canadian Journal of Agricultural Economics 37: 513–24.CrossRefGoogle Scholar
Barten, A.P. 1969. “Maximum Likelihood Estimation of a Complete System of Demand Equations.” European Economic Review 1: 7–73.Google Scholar
Bjorndal, T., Salvanes, K.G., and Andreassen, J.H. 1992. “The Demand for Salmon in France: The Effects of Marketing and Structural Change.” Applied Economics 24: 1027–34.Google Scholar
Blanciforti, L., and Green, R. 1983. “An Almost Ideal Demand System Incorporating Habits: An Analysis of Expenditures on Food and Aggregate Commodity Groups.” Review of Economics and Statistics 65: 511–15.Google Scholar
Braschler, C. 1983. “The Changing Demand Structure for Pork and Beef in the 1970s: Implications for the 1980s.” Southern Journal of Agricultural Economics 15: 105–10.Google Scholar
Brown, M.G., and Lee, J.-Y. 1992. “Theoretical Overview of Demand Systems Incorporating Advertising Effects.” In Commodity Advertising and Promotion, ed. Kinnucan, H.W., Thompson, S.R., and Chang, H.-S. Ames: Iowa State University Press.Google Scholar
Capps, O. Jr., Tedford, J.R., and Havlicek, J. Jr. 1985. “Household Demand for Convenience and Nonconvenience Foods.” American Journal of Agricultural Economics 67: 862–69.Google Scholar
Chalfant, J. 1987. “A Globally Flexible Almost Ideal Demand System.” Journal of Business and Economic Statistics 5: 233–42.Google Scholar
Chalfant, J., and Alston, J. 1988. “Accounting for Changes in Tastes.” Journal of Political Economy 96: 391–410.Google Scholar
Chang, H.-S., and Green, R. 1992. “Measuring the Effects of Advertising on Demand Elasticities Using Time Series/Cross-Sectional Data.” In Commodity Advertising and Promotion, ed. Kinnucan, H.W., Thompson, S.R., and Chang, H.-S. Ames: Iowa State University Press.Google Scholar
Chavas, J.P. 1983. “Structural Change in the Demand for Meat.” American Journal of Agricultural Economics 65: 148–53.Google Scholar
Chen, P.Y., and Veeman, M. 1991. “An Almost Ideal Demand System Analysis for Meats with Habit Formation and Structural Change.” Canadian Journal of Agricultural Economics 39: 223–35.Google Scholar
Choi, S., and Sosin, K. 1990. “Testing for Structural Changes: The Demand for Meat.” American Journal of Agricultural Economics 72: 228–36.Google Scholar
Cox, T.L. 1992. “A Rotterdam Model Incorporating Advertising Effects: The Case of Canadian Fats and Oils.” In Commodity Adversiting and Promotion, ed. Kinnucan, H.W., Thompson, S.R., and Chang, H.-S. Ames: Iowa State University Press.Google Scholar
Dahlgran, R.A. 1987. “Complete Flexibility Systems and the Stationarity of U.S. Meat Demands.” Western Journal of Agricultural Economics 12: 152–63.Google Scholar
Davis, B., and Cardwell, H.T. III. 1980. “Production and Price Relationships for West Texas and U.S. Spring and Summer Potatoes.” Department of Agricultural Economics, College of Agricultural Sciences Publication No. T-1-191. Lubbock, Texas: Texas Tech University.Google Scholar
Deaton, A., and Muellbauer, J. 1980. “An Almost Ideal Demand System.” American Economic Review 70: 312–26.Google Scholar
Destorel, J.J. 1984. “Potato Forecasting Model.” Marketing and Economics Branch working paper. Ottawa: Agriculture Canada. August.Google Scholar
Dunham, Denis. 1993. Food Cost Review. Washington, D.C.: USDA, Economic Research Service.Google Scholar
Eales, J.S., and Unnevehr, L.J. 1988. “Demand for Beef and Chicken: Separability and Structural Change.” American Journal of Agricultural Economics 70: 521–32.Google Scholar
Eales, J.S., and Unnevehr, L.J. 1993. “Simultaneity and Structural Change in Meat Demand.” American Journal of Agricultural Economics 75: 259–68.Google Scholar
Edgerton, D.L. 1993. “Separable Demand Models.” Journal of Agricultural and Resource Economics 18: 141–46.Google Scholar
Fulponi, L. 1992. “The Almost Ideal Demand System: An Application to Food and Meat Groups for France.” Journal of Agricultural Economics 40: 82–92.Google Scholar
Gao, X.M., and Shonkwiler, J.S. 1991. “Taste Change in Meat Demand—An Application of the MIMIC Model.” Southern Journal of Agricultural Economics 23: 260.Google Scholar
Gao, X.M., Wailes, E.J., and Cramer, G.L. 1994. “A Synthetic Demand System: An Application to U.S. Consumer Demand for Rice and Selected Rice Substitutes.” Review of Agricultural Economics 16: 27–38.Google Scholar
Gao, Y., and Guenthner, J.F. 1992. “Forecasting the Demand for Frozen Potatoes.” University of Idaho, College of Agriculture, Agricultural Experiment Station Report no. 755.Google Scholar
Green, R.D. 1985. “Dynamic Utility Functions for Measuring Advertising Responses.” In Proceedings of Research on Effectiveness of Agricultural Commodity Promotion, Seminar. Arlington, Va.: Farm Foundation and USDA.Google Scholar
Green, R.D., and Alston, J. 1990. “Elasticities in AIDS Models.” American Journal of Agricultural Economics 72: 442–45.Google Scholar
Green, R.D., Carman, H.F., and McManus, K. 1991. “Some Empirical Methods of Estimating Advertising Effects in Demand Systems: An Application to Dried Fruits.” Western Journal of Agricultural Economics 16: 63–71.Google Scholar
Guenthner, J., Lin, B.H., and Levi, A.E. 1991. “The Influence of Microwave Ovens on the Demand for Fresh and Frozen Potatoes.” Journal of Food Distribution Research September: 45–52.Google Scholar
Hausman, J. 1978. “Specification Tests in Econometrics.” Econometrica 46: 1251–71.Google Scholar
Hayes, D. 1992. “Discussion: Incorporating Advertising into Demand Systems.” In Commodity Advertising and Promotion, ed. Kinnucan, H.W., Thompson, S.R., and Chang, H.-S. Ames: Iowa State University Press.Google Scholar
Jones, E., and Choi, Y. 1992. “Advertising of Fresh and Processed Potato Products.” In Commodity Advertising and Promotion, ed. Kinnucan, H.W., Thompson, S.R., and Chang, H.-S. Ames: Iowa State University Press.Google Scholar
Jones, E., and Ward, R.W. 1989. “Effectiveness of Generic and Brand Advertising on Fresh and Processed Potato Products.” Agribusiness 5: 528–36.Google Scholar
LaFrance, J.T. 1991. “When Is Expenditure ‘Exogenous’ in Separable Demand Models?” Western Journal of Agricultural Economics 16: 49–62.Google Scholar
Maddala, G.S. 1977. Econometrics. New York: McGraw-Hill.Google Scholar
McCracken, V.A. 1988. Consumer Demand for Potatoes: At Home and Away From Home. Research Bulletin XB1000. Pullman: College of Agriculture and Home Economics Research Center, Washington State University.Google Scholar
McGuirk, A., Driscoll, P., Alwang, J., and Huang, H. 1995. “System Misspecification Testing and Structural Change in the Demand for Meats.” Journal of Agricultural and Resource Economics 20: 1–21.Google Scholar
Miranda, M.J., and Glauber, J.W. 1993. “Intraseasonal Demand for Fall Potatoes under Rational Expectations.” American Journal of Agricultural Economics 75: 104–12.Google Scholar
Mischen, P. 1994. “NFAPP Potato Model Baseline Projections.” National Food and Agricultural Policy Project. Tempe: Arizona State University.Google Scholar
Moschini, G., and Meilke, K.D. 1984. “Parameter Stability and the U.S. Demand for Beef.” Western Journal of Agricultural Economics 9: 271–82.Google Scholar
Moschini, G., and Meilke, K.D. 1989. “Modeling the Pattern of Structural Change in U.S. Meat Demand.” American Journal of Agricultural Economics 71: 253–61.Google Scholar
Moschini, G., and Vissa, A. 1992. “A Linear Inverse Demand System.” Journal of Agricultural and Resource Economics 17: 294–302.Google Scholar
Moschini, G., Moro, D., and Green, R.D. 1994. “Maintaining and Testing Separability in Demand Systems.” American Journal of Agricultural Economics 76: 61–73.Google Scholar
Nayga, R.M. Jr., and Capps, O. Jr. 1994. “Tests of Weak Separability in Disaggregated Meat Products.” American Journal of Agricultural Economics 76: 800–808.Google Scholar
Nelson, J. 1991. “Quality Variation and Quantity Aggregation in Consumer Demand for Food.” American Journal of Agricultural Economics 73: 1204–12.Google Scholar
Nyankori, J.C.O., and Miller, G.H. 1982. “Some Evidence and Implications of Structural Change in Retail Demand for Meats.” Southern Journal of Agricultural Economics 14: 65–70.Google Scholar
Pollak, R.A. 1970. “Habit Formation and Dynamic Demand Functions.” Journal of Political Economy 78: 745–63.Google Scholar
Pollak, R.A., and Wales, T.J. 1969. “Estimation of the Linear Expenditure System.” Econometrica 37: 629–750.Google Scholar
Pollak, R.A., and Wales, T.J. 1981. “Demographic Variables in Demand Analysis.” Econometrica 49: 533–51.Google Scholar
Reynolds, A., and Goddard, E. 1991. “Structural Change in Canadian Meat Demand.” Canadian Journal of Agricultural Economics 39: 211–22.Google Scholar
Richards, T.J., Gao, X.M., and Kagan, A. 1996. “The Demand for Quality and Convenience: A Household Production Approach.” Discussion paper, National Food and Agricultural Policy Project. Arizona State University. June.Google Scholar
Senauer, B., Asp, E., and Kinsey, J. 1991. Food Trends and the Changing Consumer. St. Paul, Minn.: Eagan Press.Google Scholar
Tegne, A. 1990. “The Kalman Filter Approach for Testing Structural Change in the Demand for Alcoholic Beverages in the U.S.” Applied Economics 22: 1407–16.Google Scholar
Thurman, W.N. 1987. “The Poultry Market: Demand Stability and Industry Structure.” American Journal of Agricultural Economics 69: 30–37.Google Scholar
Traub, L.G., and Odland, D. 1979. “Convenience Foods versus Home Prepared Foods: Comparative Costs, Yield, and Quality.” Agricultural Economics Report no. 429. Washington, D.C.: USDA, ESCS.Google Scholar
U.S. Department of Agriculture. 1994. Agricultural Statistics, 1993. Washington, D.C.Google Scholar
U.S. Department of Agriculture, Economic Research Service (ERS), Commodity Economics Division (CED). 1993. Food Consumption, Prices, and Expenditures: 1970-92. Washington, D.C.Google Scholar
U.S. Department of Agriculture, Economic Research Service (ERS), Commodity Economics Division (CED). 1994. Food Marketing Review: 1992-93. Agricultural Economics Report no. 678. Washington, D.C.Google Scholar
U.S. Department of Agriculture, Economic Research Service (ERS), National Agricultural Statistics Service (NASS). 1994. Potato Statistics. Washington, D.C.Google Scholar
U.S. Department of Commerce. 1994. Statistical Abstract of the United States, 1993. Washington, D.C.: Government Printing Office.Google Scholar
U.S. Department of Commerce. Bureau of Labour Statistics. 1970-92. Consumer Price Index: Monthly Summary. Washington, D.C.Google Scholar
Wahl, T.I., and Hayes, DJ. 1990. “Demand System Estimation with Upward Sloping Supply.” Canadian Journal of Agricultural Economics 38: 107–22.Google Scholar
WEFA Group. 1995. U.S. Macroeconomic Services. New York.Google Scholar
Wohlgenant, M.K. 1985. “Estimating Cross-Elasticities of Demand for Beef.” Western Journal of Agricultural Economics 10: 322–29.Google Scholar
Xu, X., and Veeman, M. 1995. “Model Choice and Structural Specification for Canadian Meat Consumption: 1967-1992.” Paper presented at American Agricultural Economics Association annual meetings, Indianapolis, In., August.Google Scholar
Yang, S.-R., and Koo, W.W. 1994. “Japanese Meat Import Demand Estimation with the Source Differentiated AIDS Model.” Journal of Agricultural and Resource Economics 19: 396–408.Google Scholar
Young, L.J. 1987. “Canadian Meat Demand.” Policy Branch Working Paper 10/87. Ottawa: Agriculture Canada. June.Google Scholar