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The demand for value‐added and convenience: A household production approach
Author(s) -
Richards Timothy J.,
Gao X. M.,
Patterson Paul M.
Publication year - 1998
Publication title -
agribusiness
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.57
H-Index - 43
eISSN - 1520-6297
pISSN - 0742-4477
DOI - 10.1002/(sici)1520-6297(199809/10)14:5<363::aid-agr3>3.0.co;2-d
Subject(s) - economics , consumption (sociology) , production (economics) , nonmarket forces , value (mathematics) , microeconomics , derived demand , consumer demand , econometrics , shadow (psychology) , shadow price , demand curve , factor market , mathematics , statistics , psychology , mathematical optimization , social science , sociology , psychotherapist
Americans are consuming more complex carbohydrate‐based foods. This study applies a household production model to investigate the role of US households' demand for value‐added and convenience, both defined as nonmarket commodities, in complex carbohydrate consumption. Empirical estimates of a translog household production system using Nationwide Food Consumption Survey (NFCS) data from 1977–1978 and 1987–1988 provide estimates of these commodities' shadow values. The shadow values are used, in turn, to estimate demand functions for value‐added and convenience. The results show highly significant and negative demand elasticities for both commodities, suggesting that this is a valuable tool for analyzing the structure of their demand. © 1998 John Wiley & Sons, Inc.