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The demand for domestic and imported alcoholic beverages in Ontario, Canada: a dynamic simultaneous equation approach

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  • Andreas Andrikopoulos
  • James Brox
  • Emanuel Carvalho

Abstract

The purpose of this paper is to estimate simultaneously dynamic demand functions and, consequently, income and price elasticities for domestic and imported alcoholic beverages for the province of Ontario. The methodology used is the almost ideal demand system, originally developed by Deaton and Muellbauer (1980), augmented by Pollak's (1970) habit formation hypothesis. The empirical application uses time series (1958-1987) for imported and domestically produced spirits, wine and beer. The findings provide strong support favouring the dynamic version of the almost ideal demand system over its static alternative, but little evidence of strong substitution between domestic and imported products.

Suggested Citation

  • Andreas Andrikopoulos & James Brox & Emanuel Carvalho, 1997. "The demand for domestic and imported alcoholic beverages in Ontario, Canada: a dynamic simultaneous equation approach," Applied Economics, Taylor & Francis Journals, vol. 29(7), pages 945-953.
    • Handle: RePEc:taf:applec:v:29:y:1997:i:7:p:945-953
    DOI: 10.1080/000368497326606
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    Cited by:

    1. Dyack, Brenda & Goddard, Ellen W., 2001. "The Rise of Red and the Wane of White: Wine Demand in Ontario Canada," 2001 Conference (45th), January 23-25, 2001, Adelaide, Australia 125617, Australian Agricultural and Resource Economics Society.
    2. Tomson Ogwang & Danny Cho, 2009. "Economic determinants of the consumption of alcoholic beverages in Canada: a panel data analysis," Empirical Economics, Springer, vol. 37(3), pages 599-613, December.
    3. West, Sara E. & Parry, Ian W.H., 2009. "Alcohol-Leisure Complementarity: Empirical Estimates and Implications for Tax Policy," National Tax Journal, National Tax Association;National Tax Journal, vol. 62(4), pages 611-633, December.
    4. Andreas Andrikopoulos & John Loizides, 2000. "The demand for home-produced and imported alcoholic beverages in Cyprus: the AIDS approach," Applied Economics, Taylor & Francis Journals, vol. 32(9), pages 1111-1119.
    5. Chang, Hui-Shung (Christie) & Bettington, Nicholas, 2001. "Demand for Wine in Australia: Systems Versus Single Equation Approach," Working Papers 12923, University of New England, School of Economics.
    6. Angulo, Ana Maria & Gil, Jose Maria & Gracia, Azucena, 2001. "The demand for alcoholic beverages in Spain," Agricultural Economics, Blackwell, vol. 26(1), pages 71-83, October.
    7. Ana Gil & José Molina, 2009. "Alcohol demand among young people in Spain: an addictive QUAIDS," Empirical Economics, Springer, vol. 36(3), pages 515-530, June.
    8. Habibeh Sherafatmand & Ali Akbar Baghestany, 2015. "Comparison of Rotterdam Model versus almost ideal demand system for fish and red meat," Agrekon, Taylor & Francis Journals, vol. 54(1), pages 120-137, March.
    9. Carvalho, Emanuel & Lian, Zeng, 2010. "The Impact of Goods and Services Tax on the Pattern of Canadian Consumer Spending and Saving," The Journal of Economic Asymmetries, Elsevier, vol. 7(1), pages 123-136.
    10. Chang, Hui-Shung & Griffith, Garry & Bettington, Nicholas, 2002. "The Demand for Wine in Australia Using a Systems Approach: Industry Implications," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 10, pages 1-12, September.
    11. James Fogarty, 2010. "The Demand For Beer, Wine And Spirits: A Survey Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 24(3), pages 428-478, July.
    12. John Eakins & Liam Gallagher, 2003. "Dynamic almost ideal demand systems: an empirical analysis of alcohol expenditure in Ireland," Applied Economics, Taylor & Francis Journals, vol. 35(9), pages 1025-1036.
    13. L. Fanelli & M. Mazzocchi, 2004. "Back to the future? Habits and rational addiction in UK tobacco and alcohol demand," Quaderni di Dipartimento 0, Department of Statistics, University of Bologna.

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