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Abstract
Despite significant media and research interests drawn into the Canadian dairy sector in recent
years, no study has estimated price and income elasticities of demand for major dairy products at
the provincial level using longitudinal data. This article attempts to bridge this gap by estimating
a demand system for seven major dairy products in Ontario. Employing Barten’s General Model,
four alternative demand systems were nested and the NBR demand system was found to be the
most appropriate for the data set in Ontario on both theoretical and empirical grounds. The
symmetry, homogeneity and concavity conditions are all supported by the data. Empirically, all
own-price elasticities are negative and statistically significant. The expenditure elasticities of all
dairy products are positive, less than unity and statistically significant. Finally, most dairy
products are net substitutes in consumption.