Demand For Non-alcoholic Beverages Research Articles

Demand Analysis for Non-Alcoholic Beverages Consumptin in the United States

This research analyzes the demand for non-alcoholic beverages (non-diet carbonated beverages, diet carbonated beverages, non-carbonated caloric beverages, water, and unsweetened coffee and tea) in the United States using the first difference version of the Almost Ideal Demand System model. Five expenditure shares and prices demand equations for the non-alcoholic beverages are estimated using the Iterated Seemingly Unrelated Regression (ITSUR) and Full Information Maximum Likelihood (FIML) techniques. These two estimation techniques give similar results. Most of the products exhibit the consistent sign for the own and cross price elasticities as predicted by economic theory. Based on the expenditure elasticity, non-diet beverage is a luxury good (1.632) and the remaining goods have expenditure elasticity less than, which indicates that these products are necessities. These products are not weakly separable based on the regular and adjusted Wald tests. Moreover, seasonality has a positive impact on caloric beverages and water and a negative impact on the remaining productsInt. J. Soc. Sci. Manage. Vol-3, issue-1: 38-46

Advertising and U. S. Nonalcoholic Beverage Demand

As a first effort at modeling nonalcoholic beverage demand in a systemwide framework that includes bottled water, this article examines the impact of advertising on the demand for nonalcoholic beverages in the United States. We employed an AIDS (almost ideal demand system) model of five jointly estimated equations that included advertising expenditures as explanatory variables to evaluate annual U. S. consumption of nonalcoholic beverages for 1974 through 2005. Results suggest that advertising increases demand for fluid milk, soft drinks, and coffee and tea, but not for juice or bottled water. Advertising spillover effects occur in over 50 percent of the cases considered, and such effects can be substantial, particularly for advertising of soft drinks, and coffee and tea. We find that a large increase in the retail price of fluid milk, an increasing trend towards dining out, and positive spillover effects from soft-drink advertising made significant contributions to bottled water's success in recent years.

Demand for nonalcoholic beverages: The case of low‐income households

AbstractHousehold beverage consumption is investigated using data from the National Food Stamp Program Survey conducted in the United States. A censored Translog demand system is estimated with the full‐information maximum‐likelihood procedure. All own‐price effects are negative and significant, and whole milk, reduced‐fat milk, juice, coffee, and tea are found to be net substitutes for soft drink. Thus, prices provide a partial answer to the declining consumption of milk and rising consumption of soft drink. Nutrition information and dietary beliefs also play important roles, highlighting the importance of an effective nutrition education program directed toward the low‐income households. [JEL citation: C34 (Truncated and Censored Models), D12 (Consumer Economics: Empirical), Q18 (Agricultural Policy; Food Policy).] © 2004 Wiley Periodicals, Inc. Agribusiness 20: 309–321, 2004.

Fluid milk consumption and demand response to advertising for non-alcoholic beverages

Norwegian fluid milk consumption has declined steadily over the last twenty years, despite the dairy industry spending increasing amounts of money on advertising. Using a two-stage model, we investigate whether advertising has increased the demand for milk. No effect of advertising on the demand for non-alcoholic beverages is found in the first stage. In the second stage, an almost ideal demand system including advertising expenditures on competing beverages is estimated. The effects of generic advertising within the beverage group are positive and significant for whole milk and negative and significant for lower fat milk. The own-advertising elasticity for the combined fluid milk group is 0.0008. This highly inelastic elasticity suggests that increased advertising will not be profitable for the producers. Several cross-advertising effects are statistically significant, emphasizing the usefulness of a demand system approach.