Aggregate Demand for Imported Whole Milk in Spain: Implications for the European Union (EU)

We provide estimates of expenditure and price elasticities of the demand for imported milk in Spain using a dynamic Linear Approximate of the Almost Ideal Demand System (LA-AIDS). We also provide evidence of structural change in the demand for imported milk in Spain due to the dairy program established in 1966 and Spain's accession into the EU in 1986. Results have important implications for the EU in terms of demand forecasting, welfare analysis, and resource allocation to design an effective production and supply plan.