The Effects of Prices, Advertising, Expenditures, and Demographics on Demand for Nonalcoholic Beverages

We estimate a demand system for ten nonalcoholic beverages to disentangle effects of prices, expenditures, advertising, and demographics on demand for nonalcoholic beverages for 1999 through 2010. We find that changes in demographic composition of the population between 1999 and 2008 played a much bigger role in observed purchasing patterns for recently introduced beverages like soy, rice, and almond drinks, isotonic and energy drinks, and bottled water whereas changes in prices and advertising expenditures largely explained declining demand for milk, regular carbonated soft drinks, and coffee and tea. However, between 2008 and 2010, declining demand for most nonalcoholic beverages was largely driven by income-led decreases in expenditures.


Issue Date:
2014-04
Publication Type:
Journal Article
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/165903
PURL Identifier:
http://purl.umn.edu/165903
Published in:
Agricultural and Resource Economics Review, 43, 1
Page range:
31-52
Total Pages:
22




 Record created 2017-04-01, last modified 2020-10-28

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