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A Double-Hurdle Model Of Food Demand With Endogenous Unit Values

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  • Dong, Diansheng
  • Gould, Brian W.

Abstract

This study develops a unique double-hurdle model of demand for composite food commodities which endogenizes unit values. The model structure allows us to account for the inability to observe such values for non-purchasing households and simultaneously adjusts for quality demand effects reflected in these unit values. Application to Mexican household food expenditure data shows the importance of controlling for the quality of composite goods. We find that poultry and pork expenditures depend on both quantity demanded and quality desired.

Suggested Citation

  • Dong, Diansheng & Gould, Brian W., 1999. "A Double-Hurdle Model Of Food Demand With Endogenous Unit Values," 1999 Annual meeting, August 8-11, Nashville, TN 21635, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea99:21635
    DOI: 10.22004/ag.econ.21635
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    References listed on IDEAS

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    1. Steven T. Yen & Terry L. Roe, 1989. "Estimation of a Two-Level Demand System with Limited Dependent Variables," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(1), pages 85-98.
    2. Steven T. Yen & Andrew M. Jones, 1997. "Household Consumption of Cheese: An Inverse Hyperbolic Sine Double-Hurdle Model with Dependent Errors," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(1), pages 246-251.
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    6. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
    7. 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.
    8. Blundell, Richard & Meghir, Costas, 1987. "Bivariate alternatives to the Tobit model," Journal of Econometrics, Elsevier, vol. 34(1-2), pages 179-200.
    9. Diansheng Dong & J.S. Shonkwiler & Oral Capps, 1998. "Estimation of Demand Functions Using Cross-Sectional Household Data: The Problem Revisited," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 466-473.
    10. Wales, T J & Woodland, A D, 1980. "Sample Selectivity and the Estimation of Labor Supply Functions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(2), pages 437-468, June.
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    Cited by:

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    2. Ai-Chi Hsu & Shu-Chin Liu, 2007. "The hurdle models choice between truncated normal and lognormal," Applied Economics, Taylor & Francis Journals, vol. 40(2), pages 201-207.

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