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Estimation of Price Elasticities from Cross-Sectional Data

Author

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  • Chung, Chanjin
  • Dong, Diansheng
  • Kaiser, Harry M.
  • Schmit, Todd M.

Abstract

This study develops an empirical framework that can be used to estimate quality-adjusted price elasticities from cross-sectional data, which are theoretically consistent and comparable to elasticities from time-series data. The new approach shows the importance of properly adjusting for quality variation in demand analysis.

Suggested Citation

  • Chung, Chanjin & Dong, Diansheng & Kaiser, Harry M. & Schmit, Todd M., 2001. "Estimation of Price Elasticities from Cross-Sectional Data," 2001 Annual meeting, August 5-8, Chicago, IL 20517, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea01:20517
    DOI: 10.22004/ag.econ.20517
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    References listed on IDEAS

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    1. Goldman, Fred & Grossman, Michael, 1978. "The Demand for Pediatric Care: An Hedonic Approach," Journal of Political Economy, University of Chicago Press, vol. 86(2), pages 259-280, April.
    2. Wales, T. J. & Woodland, A. D., 1983. "Estimation of consumer demand systems with binding non-negativity constraints," Journal of Econometrics, Elsevier, vol. 21(3), pages 263-285, April.
    3. Lewbel, Arthur, 1996. "Aggregation without Separability: A Generalized Composite Commodity Theorem," American Economic Review, American Economic Association, vol. 86(3), pages 524-543, June.
    4. J. Scott Shonkwiler & Steven T. Yen, 1999. "Two-Step Estimation of a Censored System of Equations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 972-982.
    5. Heien, Dale & Wessells, Cathy Roheim, 1990. "Demand Systems Estimation with Microdata: A Censored Regression Approach," Journal of Business & Economic Statistics, American Statistical Association, vol. 8(3), pages 365-371, July.
    6. Diansheng Dong & Brian W. Gould, 2000. "Quality versus quantity in Mexican household poultry and pork purchases," Agribusiness, John Wiley & Sons, Ltd., vol. 16(3), pages 333-355.
    7. Deaton, Angus, 1988. "Quality, Quantity, and Spatial Variation of Price," American Economic Review, American Economic Association, vol. 78(3), pages 418-430, June.
    8. H. S. Houthakker, 1952. "Compensated Changes in Quantities and Qualities Consumed," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 19(3), pages 155-164.
    9. Federico Perali & Jean-Paul Chavas, 2000. "Estimation of Censored Demand Equations from Large Cross-Section Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 1022-1037.
    10. Julie A. Nelson, 1991. "Quality Variation and Quantity Aggregation in Consumer Demand for Food," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(4), pages 1204-1212.
    11. Thomas L. Cox & Michael K. Wohlgenant, 1986. "Prices and Quality Effects in Cross-Sectional Demand Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(4), pages 908-919.
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    Cited by:

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    2. Kaimba, George K. & Mithöfer, Dagmar & Muendo, Kavoi M., 2021. "Commercialization of underutilized fruits: Baobab pulp supply response to price and non-price incentives in Kenya," Food Policy, Elsevier, vol. 99(C).
    3. Cuma Akbay, 2007. "Urban Households’ Cooking Oil and Fat Consumption Patterns in Turkey: Quality Vs. Quantity," Quality & Quantity: International Journal of Methodology, Springer, vol. 41(6), pages 851-867, December.
    4. Thiele, Silke, 2008. "Elastizitäten der Nachfrage privater Haushalte nach Nahrungsmitteln – Schätzung eines AIDS auf Basis der Einkommens- und Verbrauchsstichprobe 2003," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 57(05), pages 1-11.
    5. Kaimba, George K. & Muendo, Kavoi M. & Mithofer, Dagmar, 2020. "Marketing of baobab pulp in Kenya: Collectors’ choice of rural versus urban markets," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 15(3), September.

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    Demand and Price Analysis;

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