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Efficiency of correction for sample selection in QUAIDS models: an example for the fish demand in Germany

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  • Julia Bronnmann

    (Christian-Albrechts-University Kiel, Institute of Economics)

  • Stefan Guettler

    (Christian-Albrechts-University Kiel, Institute of Agricultural Economics)

  • Jens-Peter Loy

    (Christian-Albrechts-University Kiel, Institute of Agricultural Economics)

Abstract

This paper investigates the performance of the Quadratic Almost Ideal Demand System (QUAIDS) with and without accounting for the consistent two-step estimation for censoring of the dependent variable as well as the use of quality-adjusted prices. The demand systems are estimated for a commodity that has a relatively low consumption level in the German market, fish. Thus, the zero observations are quite high and the need of a correction procedure is more urgent. The results show differences in the applied methods. It turns out that ignoring consistent two-step estimation and quality-adjusted prices leads to less elastic demand estimates.

Suggested Citation

  • Julia Bronnmann & Stefan Guettler & Jens-Peter Loy, 2019. "Efficiency of correction for sample selection in QUAIDS models: an example for the fish demand in Germany," Empirical Economics, Springer, vol. 57(4), pages 1469-1493, October.
    • Handle: RePEc:spr:empeco:v:57:y:2019:i:4:d:10.1007_s00181-018-1491-y
    DOI: 10.1007/s00181-018-1491-y
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