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Abstract

Using the ACNielsen HomeScan Panel over the period 1998 to 2001 as the source of data, we entertain various demand systems, namely, the LA/AIDS, the AIDS, and the QUAIDS to investigate the demand for eight non-alcoholic beverages. Own-price, cross-price, and expenditure elasticities are obtained by year and by demand system for milk, bottled water, carbonated soft drinks, powdered soft drinks, coffee, tea, fruit juices and drinks, and isotonics. Emphasis is placed on the magnitude of price sensitivity of households toward non-alcoholic beverages as well as on substitution and complementary patterns. This work provides a more current and more thorough analysis associated with the non-alcoholic beverage industry than previously reported in the literature.

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