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Abstract
We investigate pricing and demand issues for four fresh potato categories (russet, red, white, and minor
colored), organic fresh potatoes, and two processed potato categories (frozen/refrigerated and
dehydrated) using a nonlinear generalized almost ideal demand system (GAIDS) that is closed under unit
scaling (CUUS). We identify five major findings. First, we found little evidence for potato demand
differences among the four U.S. regions in our study (east, west, north, and south). Second, increased
consumer preferences for organic food consumption have caused price declines for red, russet and minor
colored potatoes while organic potato prices rose significantly. Third, white potatoes emerged from the
study as apparently the non-organic category most able to compete in an increasingly organicallyoriented
market. Fourth, potatoes as an aggregate commodity are inferior good, with perhaps the
exception being the minor colored potatoes. Fifth, the potato market competes with other carbohydrate
groups. In particular, we find strong statistical support that lower bread or frozen vegetables prices
implying reduced system expenditures on potatoes and for dehydrated potato demand being sensitive to
competing carbohydrate prices.