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Modeling Structural Change In French Beef, Poultry, And Fish Demand: A Markov Switching Aids Model

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  • Allais, Olivier
  • Nichele, Veronique

Abstract

Structural change in the French demand of beef, poultry and fish is originally investigated. Rather than applying the traditional switching AIDS (S-AIDS) model, we reconsider the analysis of structural change through the Markov switching AIDS (MS-AIDS). The main feature of this model is that the switching mechanism is controlled by an unobserved variable that follows a Markov chain. As such, it captures more complex dynamic patterns than does the S-AIDS model. The MS-AIDS and the S-AIDS are compared to determine which model provides the better explanation of beef, poultry, and fish dynamic demand. We find that a MS-AIDS displaying habit formation detects the two mad cow crises in 1996 and 2000 and may identify the structural changes emanating from nutritional recommendations.

Suggested Citation

  • Allais, Olivier & Nichele, Veronique, 2004. "Modeling Structural Change In French Beef, Poultry, And Fish Demand: A Markov Switching Aids Model," 2004 Annual meeting, August 1-4, Denver, CO 20185, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20185
    DOI: 10.22004/ag.econ.20185
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    References listed on IDEAS

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    2. 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.
    3. Blundell, Richard & Robin, Jean Marc, 1999. "Estimation in Large and Disaggregated Demand Systems: An Estimator for Conditionally Linear Systems," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(3), pages 209-232, May-June.
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