Food Demand in Mexico: An Application of the Amemiya-Tobin Approach to the Estimation of a Censored Food System

doi:10.1111/j.0002-9092.2004.00655.x

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Wiley InterScience

American Journal of Agricultural Economics

Volume 86 Issue 4, Pages 1094 - 1107

Published Online: 22 Sep 2004

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Food Demand in Mexico: An Application of the Amemiya-Tobin Approach to the Estimation of a Censored Food System

Diansheng Dong ¹ , Brian W. Gould ¹ , and Harry M. Kaiser ¹

¹ Diansheng Dong is research associate, Department of Applied Economics and Management, Cornell University. Brian W. Gould is senior scientist, Wisconsin Center for Dairy Research and Department of Agricultural and Applied Economics, University of Wisconsin–Madison. Harry M. Kaiser is professor, Department of Applied Economics and Management, Cornell University.

Funding for the research presented in this article was provided by the National Institute for Commodity Promotion and Research Evaluation and USDA National Research Initiative Grant 98-35400-6112. Anonymous review of an earlier version of this article greatly improved its quality. Any errors or omissions remain the responsibility of the authors.

KEYWORDS

AIDS • Amemiya-Tobin • censored demand system • food expenditures

ABSTRACT

The modeling of micro-level food demand patterns requires not only allowing for household heterogeneity, but also addressing the problem of censoring. In this article, we present a variation of the Amemiya-Tobin framework for estimating a censored demand system that allows for household heterogeneity. The unique aspect of our approach is the use of a procedure that ensures the adding up of both latent and observed expenditure shares and also imposes expenditure share nonnegativity. This system is applied to an analysis of food demand based on a random sample of urban Mexican households.

[Received December 2002; accepted December 2003.]

DIGITAL OBJECT IDENTIFIER (DOI)

10.1111/j.0002-9092.2004.00655.x About DOI