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Abstract

The purpose of this study is to augment the classical demand model with consumer’s variety-seeking behavior using 2004-2014 weekly Nielsen scanner data for nut products. We introduce an index variable of taste for variety into the Quadratic Almost Ideal Demand System model with pre-committed quantities. Results show that consumers do respond to the price of nut products since the pre-committed quantities only account for 10% of total consumptions. Consumers purchase more tree nut products while seeking variety, including pecan, walnut, and pistachio, and demand interrelationships among nut products change after allowing consumers to compensate through income.

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