The demand for home-produced and imported alcoholic beverages in Cyprus: the AIDS approach

Abstract

The purpose of this paper is to investigate the demand and its composition between home-produced and imported for alcoholic beverages in Cyprus. The methodological approach used is the Almost Ideal Demand System (AIDS), both in static and dynamic terms. Empirically, the AIDS, both in its static and dynamic version, was estimated using time-series (1970-1992) for three sets of data which include: (1) alcoholic beverages (wine-beer-other brandies) broken down between home-produced and imported (model A); (2) alcoholic beverages only without disaggregation between home-produced and imported (model B), and (3) aggregate alcoholic beverages (wine-beer-other brandies) and food (model C). Zellner's iterative estimation procedure was used for estimating the model. The empirical findings: (1) strongly support the dynamic version of the AIDS over its static alternative; and (2) provide certain guidelines concerning economic policies relating to an increase in government revenues and changing the composition between home-produced and imported consumption of alcoholic beverages. These basic findings could be considered relevant to the policy makers in the light of Cyprus' accession to the EU.

Application of the Almost Ideal Demand System (AIDS) Model in the Demand of the Household Commodity Group in Jordan

“…Keefe (2002) analyzed the U.S. demand for shrimp and shrimp products. Andrikopoulus and Loizides (2000) examined the demand for home-produced and imported alcoholic beverages in Cyprus. Vidyashankara et al (1999) To achieve the objectives of the study, the AIDS model will be estimated and applied to the Jordanian data.…”

Aircraft Dispute, Wine, and the US–EU Trade War: Implications for US Consumers and Wine Suppliers

“…The empirical literature on demand for alcoholic beverages, including wine, is well established. However, a significant strand of the previous research focuses on aggregate wine demand in comparison to the demand for other alcoholic products, such as beer and spirits (e.g., Andrikopoulos, Brox, and Carvalho, 1997;Andrikopoulos and Loizides, 2000;Chang, Griffith, and Bettington, 2002;Gao, Wailes, and Cramer, 1995;Levi and Folwell, 1995;Salisu and Balasubramanyam, 1997;Selvanathan, 1991;Tsolakis, Riethmuller, and Watts, 1983). Since Armington's (1969) seminal study that differentiated internationally traded products based on the geographical origin of the products, a few studies have estimated source-differentiated demand systems for imported wines, such as Muhammad (2011) for UK wine imports, and Muhammad et al (2014); Agnoli, Capitello, and Begalli (2014); Capitello, Agnoli, and Begalli (2015); and Muhammad and Countryman (2019) for Chinese wine imports.…”

The Impact of Excise Tax Increases on Ethyl Alcohol Sales in Lithuania

“…There are plenty of articles the authors of whom, like Quek, recognize that the elasticity of demand for alcohol varies over time; however, there are much more of those authors who limit themselves to the estimation of point elasticities for a particular period in time; e.g., Selvanathan found that in eight OECD countries, the elasticity of alcohol demand with respect to prices is around -0.6 (Selvanathan, 2006) and for separate alcohol groups elasticities are -0.2 for beer, -0.3, for wine, and -0.6 for spirits (Clements and Selvanathan, 1991). Andrikopoulos and Loizides calculated elasticities for various alcohol products and found that the highest elasticity is for imported beer -0.9976, while the lowest is for home-produced brandies, which is -0.1734 (Andrikopoulos and Loizides, 2000). And there are many more articles like these.…”