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Modeling U.S. Butter Consumption with Zero Observations

Published online by Cambridge University Press:  15 September 2016

Steven T. Yen  and
Shew-Jiuan Su
Steven T. Yen
Affiliation:
Center for Agricultural and Rural Development, Iowa State University
Shew-Jiuan Su
Affiliation:
Department of Geography and Anthropology, Louisiana State University
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Abstract

A heteroscedastic double-hurdle model is used to investigate household butter consumption in the United States. Results suggest that failure to incorporate heteroscedastic errors may lead to unreliable elasticity estimates. Decomposition of the effects of variables leads to insightful information and makes the double-hurdle model a more useful tool in micro demand analysis. Larger and higher-income households are more likely to consume butter than others and also consume more, but income elasticity is very small. Age, region, and seasonality are among the other significant determinants of household butter consumption.

Type
Articles
Information
Agricultural and Resource Economics Review , Volume 24 , Issue 1 , April 1995 , pp. 47 - 55
Copyright
Copyright © 1995 Northeastern Agricultural and Resource Economics Association 

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