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U.S. demand for organic and conventional vegetables: a Bayesian censored system approach
Author(s) -
Kasteridis Panagiotis,
Yen Steven T.
Publication year - 2012
Publication title -
australian journal of agricultural and resource economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.683
H-Index - 49
eISSN - 1467-8489
pISSN - 1364-985X
DOI - 10.1111/j.1467-8489.2012.00589.x
Subject(s) - almost ideal demand system , complementarity (molecular biology) , econometrics , markov chain monte carlo , bayesian probability , economics , substitution (logic) , markov chain , panel data , microeconomics , computer science , statistics , mathematics , production (economics) , genetics , programming language , biology
Demand for organic and conventional vegetables is investigated using data from A.C. Nielsen’s 2006 Homescan panel. We use a Bayesian Markov chain Monte Carlo technique, along with data augmentation, to estimate a large linear approximate Almost Ideal Demand System with censored dependent variables. Demands are price elastic, and expenditure elasticities are very high for organic vegetables, whilst demands for conventional vegetables are primarily inelastic. We find a mix of gross substitution and complementarity among the vegetable products, but net substitution is the dominant pattern. Socio‐demographic characteristics also play important roles in demands. These findings can inform deliberations about marketing campaigns, nutrition education and policy interventions.