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This paper analytically examines the demand for surgical masks following the recent health precautions due to coronavirus. Using a simple linear demand curve and alternatively examining the impacts of requirements that mandate (a) the wearing of masks by frontline workers; (b) suggested but not required masking by the whole public; and (c) compulsory masking by the whole public. The impacts of the different scenarios on the price elasticity of demand are determined along with the slope (or the rate of change) of elasticity. Some of these results differ when a non‐linear demand curve is considered instead. The equilibrium mask prices increase when masks are universally mandated, whereas the consumer surplus is higher when masks are recommended but not mandated. However, the ranking of consumer surplus is shown to be sensitive to the supply elasticity of masks. These considerations enable a structured means to view the demand implications of masking requirements and provide some food for policy thought.

Rice consumption in Benin is increasing simultaneously with a structural change in consumer demand toward higher quality rice. In this context of changing demands, experimental estimation methods provide an effective way to estimate consumer preferences. We conducted a hypothetical choice experiment in 15 open markets across Benin to analyze the demand for rice and the other staple crops. Our findings indicate that consumer preferences differ across different income groups and between urban and rural households, and that consumers in general are sensitive to changes in rice prices. Lastly, substitution between imported and domestic rice is limited. These findings are relevant for development strategies to foster the growth of the domestic rice industry in Benin.

Clinicians regularly use both indirect and direct assessments to identify preferred stimuli to include in control conditions and positive reinforcement test conditions in a functional analysis (FA). However, clinicians often rely on indirect assessment alone (e.g., caregiver report) to identify aversive stimuli to include in negative reinforcement test conditions. In this study, we evaluate a paired-stimulus demand analysis and validate assessment results via FA. Results indicate that, for all 4 participants, the demands selected least often evoked higher rates of destructive behavior than more frequently selected demands. We identified an escape function for all 4 participants in the escape-least selected (LS) condition (true positive finding) and for only 1 participant in the escape-most selected (MS) condition (false negative finding for 3 of 4 participants). These results support the utility of empirically deriving stimuli for inclusion in the negative reinforcement test condition of an FA to decrease the likelihood of false negative findings.

Taxes on sugar-sweetened beverages (SSBs) are in place in many countries to combat obesity with emerging evidence that these are effective in reducing purchases of SSBs. In this study, we tested whether signalling and framing the price increase from an SSB tax explicitly as a health-related, earmarked measure reduces the demand for SSBs more than an equivalent price increase. We measured the demand for non-alcoholic beverages with a discrete choice experiment (DCE) administered online to a randomly selected group of n = 603 households with children in Great Britain (GB) who regularly purchase SSBs. We find a suggestive evidence that a price increase leads to a larger reduction in the probability of choosing SSBs when it is signalled as a tax and framed as a health-related and earmarked policy. Respondents who did not support a tax on SSBs, who were also more likely to choose SSBs in the first place, were on average more responsive to a price increase framed as an earmarked tax than those who supported the tax. The predictive validity of the DCE, to capture preferences for beverages, was confirmed using actual purchase data. The findings imply that a well-signalled and earmarked tax on SSBs could improve its effectiveness at reducing the demand.

Increasing income brings about a decline in the relative importance of food consumption, a wider spread of spending patterns, and a demand for higher-quality goods. Using an index-number approach, this article analyzes these three closely-related tendencies. Stripping out the impact of prices from the dispersion of food expenditures gives a volume-based measure of diet diversity that is relevant for nutrition. Using unpublished data from the World Bank’s International Comparison Program for 31 items of food in more than 150 countries, we find that diets of rich countries are substantially more diverse than those of the poor; and that volumes are the more appropriate way to measure the inequality of diversity. The quality of the food basket, based on the luxury-necessity distinction of consumption, increases with income, but the elasticity is small. There is a modest tendency for the structure of prices to be regressive since prices of luxuries relative to necessities are lower in richer countries. Additionally, our diversity and quality measures are shown to have implications for demand analysis and well-being.

This paper investigates the effects of uncertainty on tourism spending (direct sales) by USA domestic tourists over the period of 1998Q1–2015Q4. For this purpose, for the first time, the Economic Policy Uncertainty index was used as an independent variable in tourism demand analysis models. Unit root and cointegration tests are applied to account for unknown structural breaks. The empirical findings indicate that a higher level of Economic Policy Uncertainty leads to significant declines in tourism spending in the long run. Copyright © 2016 John Wiley & Sons, Ltd.

As US beef and pork prices approached record high levels in 2014, industry analysts expressed surprised at consumer response. Because the relative price swings have occurred only recently, traditional approaches to demand analysis that rely on historical data series may be less useful than is typically the case. Employing one of the largest and longest-running choice experiments, we analyze data on 110,295 choices made by 12,255 consumers observed over a year-long time period coinciding with historically high meat prices. Our findings reveal nonlinear demands for meat products, with demand being more inelastic at higher prices. Ground beef, steak, and pork chop demands are more sensitive to changes in chicken breast price than the reverse. Moreover, cross-price elasticities between disaggregate meat products shrink as prices rise. Consumers' incomes significantly affect demand inter-relationships. Higher income consumers are more likely to choose steak and chicken breasts and are less likely to choose ground beef, chicken wings, and deli ham than are lower income consumers. High-income consumers tend to be less responsive to own-price changes and more responsive to cross-price changes than lower income consumers. This analysis provides estimates of structural demand parameters that help explain current meat expenditure patterns, and the results have implications for the assumption of linearity often invoked in policy analyses.

Using observational data on consumer carryout bag usage, we measure the effects of disposable bag policies on disposable and reusable bag demand. Our results show that plastic bag bans coupled with paper bag fees decrease total disposable bag demand but lead to significant increases in paper bag consumption. We compare our results to a study on bag fees and find that both policies lead to similar increases in reusable bag usage. However, the success of bans versus fees in discouraging disposable bag usage is contingent upon the types and prices of bags that stores choose to sell in lieu of disposable plastic.

There is an increasing policy interest in pesticide taxation schemes as a measure to reduce harmful effects of pesticide use. The effectiveness of such tax depends, however, on the price elasticity of demand for pesticides. Moreover, information on these demand elasticities and their determinants is of crucial relevance for policy-making and normative modeling approaches. In this article, we present a meta-analysis based on studies that have estimated pesticide demand elasticities in Europe and North America. Our meta-analysis reveals that the own-price elasticities of demand for pesticides are, with a median of −0.28, significantly smaller than zero, but also significantly larger than −1, i.e. to be inelastic. We find that the demand for pesticides for special crops is less elastic than that for arable and grassland. In addition, the demand for herbicides is more elastic than for other pesticides. Studies that consider only short-term horizons and little flexibility for farmers to adjust to price changes generate significantly less elastic pesticide demands. The results also indicate that more recent studies identify lower pesticide price elasticities of demand. Furthermore, we find that peer-reviewed studies tend to find more inelastic results compared to grey literature.

Research has demonstrated the feasibility of using positive reinforcement to treat problem behavior maintained by negative reinforcement. This line of research was extended in the current study. A functional analysis (FA) was conducted that suggested problem behavior was maintained by positive and negative reinforcement. Following the FA, a demand analysis was conducted with three demand conditions: one that replicated the demand condition from the FA, one that included presession exposure to a preferred item, and another that included presession exposure to preferred items and access to those items during breaks from demands. Although problem behavior occurred in all three demand conditions, within session analyses showed that problem behavior ceased during breaks from demands only when they included access to preferred items. This finding suggests that the motivating operation responsible for evoking problem behavior did not decrease when only a break was provided. Subsequent functional communication training and treatment analysis showed that treatments based on positive reinforcement were effective at reducing problem behavior, but those based on a negative reinforcement hypothesis were not. Copyright © 2013 John Wiley & Sons, Ltd.

We estimate source-differentiated wine demand in China using the absolute price version of the Rotterdam demand system. Within the last decade, China has gone from obscurity to an important participant in global wine trade. The continual growth of Chinese wine imports suggests that a one-time structural shift approach may not fully capture how consumption patterns or demand preferences have changed over time. Thus, a rolling or moving regression procedure is used to account for continual adjustments in import demand patterns and to evaluate overall parameter instability. Our results confirm that Chinese consumers hold French wine in high regard and that French wine demand has consistently increased over the last decade, more than any other exporting source. Consumers in China have gone from allocating about 1/3 to over 1/2 of every dollar to French wine and the expenditure elasticity for French wine mostly increased while the market was expanding. Although Australian wine has a very solid standing in the Chinese market, results suggest that its market share will likely remain unchanged. Marginal budget share and expenditure elasticity estimates indicate that Australia will continue to account for about 20 per cent of the foreign wine market in China.

We analyze an informational theory of lobbying in the context of strategic trade policy. A home firm competes with a foreign firm to export to a third country. The home policy-maker aims to improve the home firm's profit using an export subsidy. The optimal export subsidy depends on the demand conditions in the third country, which are unknown to the policy-maker. The home firm can convey this information to the policy-maker via costly lobbying. Surprisingly, the presence of lobbying costs can be advantageous for both: it makes the home firm's lobby effort credible and eases the policy-maker's information problem. We identify the conditions under which lobbying is beneficial on balance and the conditions under which it is harmful.

Due to the successful development of Norwegian salmon farming, major salmon producing countries (such as Canada, the United States, Japan, Chile, Scotland, etc.) have actively attempted to duplicate this practice. This recent development has far reaching implications for the salmon industry. Therefore, a demand analysis of Atlantic salmon products is timely. While we applaud the work by Kabir and Ridler (hereafter, KR), we would like to comment on the specification of their econometric model and elaborate on the implications of KR's findings on fishery management.

This paper examines the labour market in Macedonia, a country with the highest unemployment rate in Europe. I describe labour market institutions and policies during the transition. I also examine job creation and job destruction using firm-level data and I estimate short-term and long-term elasticities of the labour demand. The analysis shows that there are regulatory barriers to the labour market flexibility. I can also conclude that the privatization of socially owned enterprises has failed to promote job creation. Nevertheless, labour market problems seem to stem from factors other than substantial sluggishness of firms in adjusting employment to variations in wages.

Building on research with unit values, we demonstrate how a household's per serving and total vegetable expenditures depend on both the characteristics of the household and on its location. The lower a household's income, for example, the lower is vegetable spending, all else constant. However, households living in communities with high real estate prices, or with a high incidence of poverty, among other things, tend to pay more. Simulations further illustrate the effect that a community's characteristics can have on a household's vegetable spending, if the household lives in each of 10 cities in the United States.

This article addresses a number of key problems commonly confronted in the literature on international demand analysis. These include data issues and requirements, multistage budgeting, outliers, group heteroskedasticity, and model selection. A two-stage demand system is fit to International Comparison Programme data for 114 countries for nine aggregate categories and eight food sub-categories of goods. Outliers are identified and omitted from the sample. Parameter estimates for the two stages are obtained with a maximum-likelihood procedure that corrects for group heteroskedasticity. Country-specific income and own-price elasticities are calculated and indicate that poor countries are more responsive to changes in income and prices than rich countries. We also find evidence for the strong version of Engel's law; when income doubles, the budget share of food declines by approximately 0.10.

We propose to use the emerging method of directed graphs to study price/quantity endogeneity issues in empirical demand analysis. The approach is illustrated through the examination of U.S. meat consumption. We find that for two major meat products (beef and poultry), retail prices contemporaneously caused quantities consumed, thus were predetermined. In contrast, the quantity consumed of pork appeared to be predetermined relative to its price.

The use of household level data for food demand analysis requires the researcher to address issues such as purchase censoring and the impacts of household age/gender composition on such demand. This analysis adopts an estimation approach to modeling censored food expenditures. The major methodological contribution of this analysis is our incorporation of an endogenous equivalence scale measure within the expenditure system. Our empirical application is concerned with Brazilian household food expenditures. We use the estimated adult equivalence scales to evaluate a measure of household welfare represented by per-adult equivalent food expenditures. We find a significant shift of the distribution of per capita food distributions when comparing member count versus adult equivalent-based per capita distributions. L'utilisation de donnees sur les menages pour analyser la demande d'aliments exige ddu chercheur qu'il aborde diverses questions comme la censure des achats et l'incidence de la composition du menage (âges/sexes) sur la demande. Pour leur analyse, les chercheurs ont recouru a une technique d'estimation qui modelise les achats d'aliments censures. Le principal apport methodologique de leur approche est l'integration d'une echelle d'equivalence endogene au systeme de depenses. La methode a ete appliquee de maniere empirique au budget d'alimentation de la famille bresilienne. Les auteurs ont utilise les echelles d'equivalence adulte pour evaluer le bien-etre des menages d'apres leurs achats d'aliments par equivalent adulte. On constate un deplacement important de la distribution des aliments par habitant quand on compare celle-ci par personne plutot que par equivalent adulte.

Understanding the role of health information in food and nutrient demand has become an important issue over the last decade. Endogeneity and measurement error are two empirical problems that are inherent in this type of analysis. While some type of instrumental variables estimation would appear the obvious solution, this article provides several theoretical and empirical reasons why this is not the case in cross-sectional analysis. An alternative estimation strategy is pursued, an empirical example is given, and the implications are discussed. Copyright 2001, Oxford University Press.

This paper provides non-parametric estimates of the relation between nutrient intake and age for Czechoslovak individuals, as a function of characteristics of both the individual and the household she lives in, on the basis of household purchases. Results show no significant difference between the age - energy intake profiles of men and women. The decomposition of this intake between carbohydrates, lipids (i.e. fats) and proteins shows a lack of balance in the diet in Czechoslovakia, but significant progress toward a more balance diet has taken place over the period. Finally, household characteristics such as the woman's level of education, or household income, have at most a marginal impact on these profiles.

This article addresses three issues related to Japanese dairy demand analysis. First, an econometric fluid milk demand model is estimated using store-level daily scanner data to determine whether the own-price elasticities are significantly different from previous estimates based on aggregate market-level data. This is important because of the current debate among Japanese dairy industry leaders concerning whether fluid milk is price inelastic or elastic. Own-price elasticity differences between fresh and reconstituted milk products are also examined. Second, milk product cross-price elasticities are estimated to measure the degree, if any, of substitutability between fresh milk and reconstituted milk products. Because most previous studies have relied upon aggregate market-level data, there are no previous estimates of cross-price elasticities for fresh milk and reconstituted milk products. Finally, price–cost margin ratios are estimated for each commodity using a method that does not require cost data, but rather relies on assumptions regarding the degree of competition to derive the price–cost margin ratio [Econlit alphanumeric subject codes: Q110, Q130]. © 2001 John Wiley & Sons, Inc.

This paper addresses issues of specification testing for the travel cost method (TCM). Two nonparametric approaches to TCM analysis are presented. In addition, semi-nonparametric count models for TCM are developed. A numerical illustration is provided in which the three methods are applied to an actual TCM data set on waterfowl hunting and the results are compared to those from a parametric analysis. Copyright 2000, Oxford University Press.

Summary. New York: Leading National Advertisers, Inc., all is- sues, 1975-1993. McGuirk, A., P. Discoll, J. Alwang, and H. Huang. "System Misspecification Testing and Structural Change in the Demand for Meats." J. Agr. and Res. Econ. 20(July 1995): 1-21. Mizerski, R. "An Attribution Explanation of the Dis- proportionate Influence of Negative Informa- tion." J. Consum. Res. 9(December 1982):301-10. Mountain, D.C. "The Rotterdam Model: An Ap- proximation in Variable Space." Econometrica 56(March 1988):477-84. Perez, A.M., M.R. Weimar, and S. Cromer. U.S. Egg and Poultry Statistical Series, 1960-90. Wash-ington DC: U.S. Department of Agriculture, CED, ERS, Statist. Bull. No. 833, December 1991. Piggott, N.E., and G.R. Griffith. Measuring the De- Effects of Health and Advertising on Meat Demand mand Response to Generic Advertising: The Case of the Australian Meat Industry. Research Working Paper Series No. 3/92, Economic Ser- vices Unit, New South Wales Agriculture, 1992. Putman, J.J. and J.E. Allshouse. Food Consumption, Price, and Expenditure, 1970-1990. Washing-ton DC: U.S. Department of Agriculture, ERS Statist. Bull. No. 840. Robinson, L. J. D. Colyer. "Reflections on Rel- evance of Professional Journals." J. Agr. and Appl. Econ. 26(July 1994):19-34. Sakong, Y., and D. J. Hayes. "Testing the Stability of Preferences: A Nonparametric Approach." Amer. J. Agr. Econ. 75(May 1993):269-77. Schmitz, J.D., and 0.Capps, Jr. A Complete Systems Analysis of Nutritional Awareness and Food De- mand. Texas A&M Agr. Exp. Sta. Bull. 1712, March 1993. Selvanathan, E.A. "Advertising and Consumer De- mand: A Differential Approach." Econ. Letters 31(November 1989):215-19. Stigler, G.J., and G. Becker. "'De Gustibus Non Est Disputatum'." Amer. Econ. Rev. 67(March 1977):76-90. Telser, L.G. "Advertising and Cigarettes." J. Polit. Econ. 70(February-December 1962):471-99. Theil, H. "The Information Approach to Demand Analysis." Econometrica 33(January 1965):67- 87.

China has emerged as a large beer producer and barley importer but few empirical studies have been reported. This study estimates demand elasticities for alcoholic beverages and tea, using China's urban household survey data, and investigates major sources of the rapid growth in China's beer consumption and barley imports. Results of an empirical demand analysis indicate that demand for beer and wine is elastic with respect to income but inelastic with respect to both own and cross prices. Findings from this study suggest that China's beer demand and barley imports will continue to grow at significant rates. © 1997 John Wiley & Sons, Inc.

Applied demand analysis is usually taken to refer to the microeconomic analysis of consumer and producer behaviour, especially the nature of input demand and consumer demand equations. In this paper, we shall confine ourselves to consumer demand and provide a review of the relevant theory and empirical results. According to Stigler's (1954) survey of early research, applied demand analysis has a long history going back to the 1790s in England with the budget studies of David Davies and Sir Frederick Morton Eden. Regarding the role of prices in determining consumption, Stigler (I 954, p. l 03) argues that 'systematic and cumulative work ... began only in the 1870s ... when Fleeming Jenkin, Jevons, W alras, Marshall and others began to develop the demand function or curve as an integral part of the theory of price formation'. The earliest empirical analysis known to Stigler of the relationship between prices and quantities consumed was carried out in 1861 by Ernst Engel (whose 1857 famous budget study led to what is now known as 'Engel's law'-the proportion of income devoted to food declines with increasing income). Engel's 1861 research dealt with harvests and prices of rye in Prussia for the period 1846-61.

I follow the differential approach in building three demand models of Spanish cross-province food consumption patterns. The models include quadratic income terms for estimating the widely varying income responses one expects from cross-section data. The proposed models are also flexible in permitting alternative levels of aggregation across goods. A nonnested testing procedure is used to identify the best model. Both the flexibility of the quadratic income term and the flexibility of alternative aggregation levels are important in the analysis of Spanish food consumption patterns.

We derive a general elasticity representation of the necessary and sufficient conditions for direct weak separability of the utility function. Parametric restrictions required to implement the separability conditions are presented for three common demand systems: the Almost Ideal, Translog, and Rotterdam. Our empirical application uses the Rotterdam model to test a few separable structures within a complete U.S. demand system emphasizing food commodities. Results, based on size-corrected likelihood ratio tests, provide support for commonly used separability assumptions about food and meat demand.

The focus of this paper is the impact on welfare measurement of a common assumption in applied demand analysis, weak separability. A standard empirical practice is to estimate conditional demand models for a set of goods which are assumed to be weakly separable from all other goods with expenditure as a right-hand-side variable, tacitly assuming that expenditure is predetermined (Alston and Chalfant 1987, 1991; Alston, Carter, Green, and Pick; Blackorby, Boyce, and Russell; Blisard and Blaylock; Brown and Heien; Cashin; Choi and Sosin; Clements and E. Selvanathan; Clements and S. Selvana-than; Deaton 1975; Goddard and Amuah; Gould, Cox, and Perali 1990, 1991; Heien; Heien and Pompelli 1988, 1989; Murray; Safyurtlu, John-son, and Hassan; Theil 1976, 1980; Van Ko-oten; Yen and Chern). Once estimated, such separable demand models often are used to cal-culate exact welfare measures, or changes in the true cost of living index, of the economic effects on consumers due to changes in the prices of the goods under study (Heien; Heien and Pom-pelli 1989; Van Kooten; Blisard and Blaylock). This practice is shown here to produce biased results. There are two sources of the bias and both can be traced to the inappropriate treatment of expenditure as predetermined. In an empiri-cal application to the U.S. dairy program, a comparison of estimates from an incomplete demand system specification versus a weakly separable specification suggests a negative bias of around 17% of the compensating variation due to eliminating price discrimination in federal milk marketing orders in 1990. Results from a Monte Carlo simulation suggest that the downward bias is closer to 40%. I first present the analysis of weak separability, then the empirical application, and a summary and conclusions. (This abstract was borrowed from another version of this item.)

Using the 2004 AC Nielsen panel consisting of over 38,000 households, the authors ascertain the influence of selected demographic variables associated with the purchase of organic fluid milk through the estimation of a probit model. From the use of the Heckman two-step procedure, they also calculate own-price, cross-price, and income elasticities by estimating demand relationships for both organic and conventional milk. They find that demographic factors play a crucial role in the household choice of purchasing organic milk. Furthermore, households are more sensitive to own-price changes in the case of organic milk versus conventional milk. Evidence from estimated cross-price elasticities indicates that organic and conventional milk are substitutes. However, quantities purchased of organic milk are more sensitive to changes in prices of conventional milk than vice versa. Consequently, an asymmetric pattern exists with regard to the substitution patterns of the respective milk types. Moreover, evidence indicates that organic milk is responsive to income changes, but conventional milk is not responsive to income changes. Finally, a 1% increase in the price of organic milk reduces total milk sales by 0.20%, but a 1% increase in the price of conventional milk raises total milk sales by 0.31%. lEconLit citations: C25, D12r. © 2010 Wiley Periodicals, Inc.

Demand for Pacific Coast pears is analyzed by means of a simultaneous equation model which separately identifies Bartlett and winter pears in fresh and processed uses. The model is applied to annual data for the 1960–1989 period and is used to determine optimal allocations for historical periods and to forecast price effects under alternative future scenarios. Demand shifts have been favorable for fresh winter pears, but unfavorable for processed winter pears and for both fresh and processed Bartlett pears. Expected increases in production may threaten the profitability of the industry without prompt remedial action.© 1992 John Wiley & Sons, Inc.

This article constitutes a trial of the use of scanner data to investigate the demand for fresh beef products (brisket, chuck, ground, loin, rib, round, and all other beef). Own-price elasticities are negative, statistically significant, and in the elastic range. Own-advertisement elasticities are positive and statistically significant but very inelastic. Cross-price effects and cross-advertisement effects are marginal. Seasonality is evident only for purchases of loin and all other beef. This article documents the utility of scanner data in food demand analysis.

In empirical demand analysis separability restrictions are usually imposed as maintained hypotheses. The separability inflexibility of most functional forms makes parametric tests of these restrictions appear problematic. We follow Pudney (1981) in stressing the usefulness of a description of the separable structure of preferences underlying an estimated model, and propose a non-iterative method forthe production of such a description. An illustration with different models estimated for nine categories of goods on French aggregate time-series data is presented. Copyright 1991 by John Wiley & Sons, Ltd.

Tests for quasi-separability, net substitutability, and perfect substitutability are developed and implemented on an almost ideal demand system model of the Japanese meat sector. The data set satisfies both symmetry and homogeneity. There is evidence of net complimentarity between chicken and dairy beef and chicken and pork. The tests indicate that Japanese Wagyu beef is considered a separate commodity to both imported beef and dairy beef. The results also indicate that fish can be treated as separable in the Japanese meat demand system.

An approach to commodity grouping in demand analysis is suggested which utilises factoring and clustering methods within the context of the ‘new’ demand theory. Resume UNE METHODE DE GROUPEMENT DES PRODUITS DANS L'ANALYSE DE LA DEMANDE Une methode de repartition par groupes de produits est suggeree en vue d'etre employee dans l'analyse de la demande qui utilise des methodes de factoring et groupement en grappes dans le contexte de la ‘nouvelle’ theorie de la demande. Zusammenfassung EIN NAHERUNGSVERSUCH ZUR GEBRAUCHSGUTERGRUPPIERUNG IN NACHFRAGEANALYSEN Es wird ein Naherungsversuch zur Gebrauchsgutergruppierung in Nachfrageanalysen vorgeschlagen, der Faktoren- und Gruppen-methoden innerhalb des Rahmenwerkes der ‘neuen’ Nachfrage-theorie benutzt.

This article presents an analysis of the demand for dairy products. First, the structure of dairy product demand is estimated using the Household Food Consumption Survey data. Under the assumption of a two-stage budgeting procedure, a complete demand system for food incorporating demographic effects is estimated. Next, using the demand relations estimated from cross-section data, prediction interval tests utilizing time-series data are performed for milk and butter. Last, factors affecting consumption are classified into economic and demographic effects and a decomposition of the causes of changes in demand over time is performed.

A conceptual clarification of the sources and meaning of cross-sectional price variability is used to motivate a theoretical and econometric framework for the estimation of cross-sectional demand functions. Quality effects are distinguished from supply-related price variability to identify cross-sectional demand for disaggregated food commodities. An empirical application using data from the 1977-78 Nationwide Food Consumption Survey indicates that parameter differences resulting from a failure to adjust cross-sectional prices for quality effects are likely to be small for relatively homogenous, disaggregated food commodities. In demand analysis with cross-sectional, household budget data, it is usually assumed that prices are constant (Allen and Bowley, Prais and Houthakker, George and King). Given this assumption, Engel functions are estimated where expenditure (or quantity) is regressed on income (or total expenditures), family size, and other demographic characteristics. The assumption that cross-sectional price effects are absent or are captured adequately by spatial and temporal dummy variables has not been evaluated empirically. Whether cross-sectional price effects can be treated in this manner has implications for the specification of cross-sectional demand functions as well as the estimation of Engel functions. There is a considerable literature on estimating price elasticities with cross-sectional data. Most of the applications utilize timeseries/cross-sectional data. Annual (or quarterly) household consumption surveys and

The goal in input demand analysis is to generate a system of equations relating factor shares and possibly total expenditures to input prices and output. Regression can then be used to produce estimates of elasticities or test hypotheses of interest. Generally, consideration is limited to systems derived from either production functions or the dual cost or profit functions, and the problem of specifying the functional form is that of approximating these unknown functions.

Demand analysis for various fluid milk products at the retail level was extended beyond the usual price-quantity-income relationships. Use of component factor analysis has introduced attitudinal and taste information useful for market development, merchandising activities, and regulatory policy promulgation. DEMAND analysis and the indifference curve approach have emphasized pricequality relationships primarily with income and other tangible socioeconomic variables as demand shifters. This approach overlooks the ordinal consumer attitudes relating to taste, acceptability, and personal preferences