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Demand for Beef and Chicken Products: Separability and Structural Change

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James S. Eales at Purdue University
James S. Eales
Laurian June Unnevehr at University of Illinois, Urbana-Champaign
Laurian June Unnevehr
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Dynamic almost ideal demand systems are estimated for meat aggregates and for disaggregated meat products. Tests for weak separability show that consumers choose among meat products rather than meat aggregates such as “beef” or “chicken.” Therefore, tests for structural change in the meat aggregates may be biased. Tests for structural change in the meat products show an exogenous constant annual 6,4% growth in chicken parts demand from 1965 to 1985 and a 3.5% decline in beef table cut demand after 1974. Increased demand for convenience may explain these changes.
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... Since the Stone index includes current budget shares ( ), they appear both on the right-hand side and on the left-hand side of the LA-AIDS Equation (16). So, the resulting correlation between the regressor ( ) and the error term lead to a simultaneous bias of the estimation (Eales and Unnevehr 1988). Therefore, several empirical studies including one by Eales and Unnevehr (1988) used lagged shares in the Stone price index. ...
... So, the resulting correlation between the regressor ( ) and the error term lead to a simultaneous bias of the estimation (Eales and Unnevehr 1988). Therefore, several empirical studies including one by Eales and Unnevehr (1988) used lagged shares in the Stone price index. ...
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