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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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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.

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Notes

  1. The structure of the data for the 2013 wave changed. For the 2013 wave, we are not able to separate the fillets from fresh and frozen fish. The products are aggregated to fresh and frozen fish including fillets. Thus, the number of fish products decreases to 4 in the 2013 data and the results for 2013 are not directly comparable to the other waves.

  2. We have to note that Table 1 presents the specific expenditure elasticities for the six commodity groups, which are relatively high. To calculate the total elasticities, we have to multiply the expenditure elasticities with the income elasticity of the total demand of food products, respectively. If we assume that the total demand for food has an income elasticity of 0.3, the expenditure elasticity, for example, meat is 0.343 and for fruits and vegetables 0.441 in 2008.

  3. The goodness-of-fit statistics, as well as their associated p-values, are presented in Table 3.

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Acknowledgement

The authors acknowledge financial support from the project “Kobe-Fisch” from the Bundesministerium für Bildung und Forschung, project no: 01UT1410. The authors would like to thank the anonymous referee and the Editor Robert Kunst for their helpful comments.

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Authors and Affiliations

  1. Department of Environmental, Resource and Ecological Economics, Christian-Albrechts-University Kiel, Institute of Economics, Wilhelm-Seelig-Platz 1, 24118, Kiel, Germany

    Julia Bronnmann

  2. Department of Agricultural Market Analysis, Christian-Albrechts-University Kiel, Institute of Agricultural Economics, Wilhelm-Seelig-Platz 7, 24118, Kiel, Germany

    Stefan Guettler & Jens-Peter Loy

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  1. Julia Bronnmann
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  2. Stefan Guettler
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Correspondence to Julia Bronnmann.

Appendix

Appendix

See Tables 7, 8, 9, 10, 11, 12 and 13.

Table 8 Constrained OLS regression results of LES, 2008
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Table 9 Specific expenditure and price elasticities of fish 2003
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Table 10 Specific expenditure and price elasticities of fish 2013
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Table 11 Parameter estimates QUAIDS fish, 2008
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Table 12 Expenditure elasticities and price elasticities of fish commodities, 2003
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Table 13 Expenditure elasticities and price elasticities of fish commodities, 2013
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Bronnmann, J., Guettler, S. & Loy, JP. Efficiency of correction for sample selection in QUAIDS models: an example for the fish demand in Germany. Empir Econ 57, 1469–1493 (2019). https://doi.org/10.1007/s00181-018-1491-y

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