Substantial differences in economic interpretations may be inferred from the estimated selectivity model results. Using the demand for frozen concentrated orange juice (FCOJ) as an example, the study suggests that the consumption patterns are quite similar between national brand and private label when the marginal effects and elasticities are evaluated based on actual observations rather than unobserved latent variables. Results show that private label FCOJ is considered as a normal (inferior) good if the income effect is assessed based on actual (potential) purchases. The estimated cents‐off elasticities for private label FCOJ also vary substantially depending on which approach is used.
National aggregate time series data are not amenable to tracing the consumer response to price changes as these changes occur in the market. This paper is designed to stimulate interest in the development of alternative sources of data and modification in estimating procedures to more nearly approach reality in estimating price-quantity relationships. The analysis was based on data obtained from a group of consuming units on quantities of meats purchased and prices paid. The procedure was designed to trace the consumer response to price changes approximately as they occurred over time.
Expenditure patterns for whole milk and lowfat milk in the Northeast region were examined by applying the Tobit maximum likelihood procedure to the 1977–78 USDA NFCS data.Results suggest that differing expenditure patterns exist between whole milk and lowfat milk. Household income estimates indicate significant positive effects on expenditure for lowfat milk but negative on expenditure for whole milk. Whole milk expenditure was estimated to be strongly related to the family life cycle stages through the child-raising years.
The present legal authority for the Food Stamp Program (FSP) is the Food and Agriculture Act of 1977. As adopted, the legislation includes a thorough overhaul of the FSP enacted into law in 1964. The FSP provides direct subsidies in the form of additional food dollars to low-income households to enhance the purchasing of nutritionally adequate diets. The most significant effect both on participating households and the food industry is the elimination of the purchase requirement whereby participants pay for food stamps. Under the new legislation, participants receive food stamps free of charge. The benefits received are roughly equivalent to the value of bonus stamps under the old program (Stucker and Boehm).
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