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Testing for Preference Change in Consumer Demand: An Indirectly Separable, Semiparametric Model

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  • Moschini, Giancarlo

Abstract

This article considers the hypothesis that preference changes may partly explain observed consumption patterns. A model is developed based on indirect weak separability. The kernel estimator of the regression function models the unknown shape of demad functions, and a parametric structure models seasonality, dynamics, and preference change. This semiparametric specification is applied to U.S. meat demand. The results support the notion that changes in consumer preferences, due to consumers' awareness of the health hazards of cholesterol and saturated-fat intake, may explain an increased consumption of white meat and a decreased consumption of red meat.

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  • Moschini, Giancarlo, 1991. "Testing for Preference Change in Consumer Demand: An Indirectly Separable, Semiparametric Model," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(1), pages 111-117, January.
    • Handle: RePEc:bes:jnlbes:v:9:y:1991:i:1:p:111-17
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    1. Giancarlo Moschini & Karl D. Meilke, 1989. "Modeling the Pattern of Structural Change in U.S. Meat Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(2), pages 253-261.
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    2. Cai, Mingchao & Wang, Yongxiang & Wu, Weixing, 2007. "Investment under event risk in china stock market: A theoretical analysis," Economic Modelling, Elsevier, vol. 24(4), pages 673-682, July.

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