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The Nested PIGLOG Model: An Application to U.S. Food Demand
Author(s) -
Piggott Nicholas E.
Publication year - 2003
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/1467-8276.00099
Subject(s) - nested set model , economics , nesting (process) , food away from home , econometrics , sample (material) , agricultural economics , consumer demand , mathematics , microeconomics , computer science , engineering , food consumption , mechanical engineering , chemistry , chromatography , database , relational database
A new demand system is introduced, the Nested PIGLOG model, nesting thirteen other demand systems including five that are also new. This new model and its nested special cases are applied to models of U.S. food demand that include food‐at‐home (FAH), food‐away‐from‐home (FAFH), and alcoholic beverages. Although nested tests and out‐of‐sample forecasting performance favor generalizing models to a certain degree, statistically insignificant improvements to in‐sample‐fit and even poorer out‐of‐sample forecast accuracy undermine further generalizations. Based on a subset of preferred models, FAFH is found to be price and income elastic compared to FAH which is price and income inelastic.