Consumer Demand for Nut Products in the United States: Application of Semi-parametric Estimation of Censored Quadratic Almost Ideal Demand System (C-QUAIDS) with Household-Level Micro Data

The United States is a dominant player in the world tree nut production with the value of nuts produced exceeded $10 billion by 2015. Annual per capita consumption of nuts in the United States has been growing during past 25 years due to increase in nutrition and health benefits of nuts. Few studies that looked at the economics of nuts in the United States come short in examining demand interrelationships between various tree nut products and peanuts to uncover complex substitutability/complementarity patterns through derivation of own-price, cross-price and income/expenditure elasticities. Demographic factors affecting the consumer demand for nut products is yet to be investigated as well. Quantity, expenditure and household demographic characteristics with respect to purchase of almonds, pecans, walnuts, pistachios, cashew nuts and peanuts obtained from 2014 Nielsen Homescan scanner panel for 65,000 U.S. households was used in estimating censored quadratic almost ideal demand system using semiparametric estimation procedure suggested by Sam and Zheng (2010). Preliminary results show that the own-price elasticity of demand for almonds, pecans, walnuts, pistachios, cashew nuts and peanuts is -0.75, -0.98, -1.05, -0.53, -0.56, and -0.17. Income, age, region and presence of children are significant drivers of demand for these nut products.

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Conference Paper/ Presentation
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D11; D12

 Record created 2017-04-01, last modified 2018-01-23

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