An assessment of the relationship between the high fructose corn syrup and the soft drink markets in the United States

This study analyzes the market of high fructose corn syrup (HFCS) in the United States and its linkages with soft drink market. For that, it develops a system of demand and supply equations for both the HFCS and soft drinks markets, which is estimated through Two Stage Least Squares methods. The results show that soft drinks are the main driver behind the growing demand for HFCS. In addition, negative news on HFCS (the association of HFCS consumption and obesity) has a negative effect on the growth of demand for soft drinks; however, per capita advertising on soft drinks has a positive effect on the growth of demand for soft drinks and more than offsets the effect of negative news. A vector error correction model is also estimated and reveals a long-term relationship between the per capita quantity consumed of soft drinks and HFCS. Lastly, consumption of soft drinks is found to Granger-cause consumption of HFCS.

Issue Date:
Feb 04 2017
Publication Type:
Conference Paper/ Presentation
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 Record created 2017-04-01, last modified 2018-01-23

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