Estimation of a Composite Food Demand System for the United States—A Revisit

We revisit the composite food demand system for the United States covering the period from 1953 to 2008. We were unable to produce elasticity measures that are as close or similar to those reported in Huang and Haidacher (1983), although the same demand system specification was employed. Our results based on the more recent data set of 1982-2008 show that most of the own-price elasticities are negative and statistically significant, varying from -.1861 (poultry) to -.9476 (nonfood). In general, the estimated own-price elasticities appear to be smaller in magnitude or more inelastic than previously reported. In contrast, we estimate the significant income elasticities for food vary from .5172 (dairy) to 4.6687 (fish), while Huang and Haidaicher (1983) report their income elasticities to vary from -.6343 (fruits) to .5748 (fats & oils). The estimated income elasticities for nonfood group appear to remain fairly constant among different studies, ranging from 1.0407 to1.2035