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Have Milk Fat Preferences Shifted? Structural Analysis of New York Milk Consumption

Published online by Cambridge University Press:  15 September 2016

Takeshi Ueda  and
Darren L. Frechette
Takeshi Ueda
Affiliation:
Department of Agricultural Economics and Rural Sociology, The Pennsylvania State University, University Park, Pennsylvania
Darren L. Frechette
Affiliation:
Department of Agricultural Economics and Rural Sociology, The Pennsylvania State University, University Park, Pennsylvania
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Abstract

Consumption of lowfat and skim milk has increased substantially over the past decade. This study investigates whether the change is due to price and expenditure effects or to a more fundamental preference change in milk demand. Parametric and nonparametric analytical approaches provide a comprehensive analysis of structural change in milk consumption in New York State. A nonparametric approach first finds evidence of structural change. A parametric likelihood-ratio test then confirms the existence of structural change using a Kalman filter specification. The value of this technical analysis of milk preferences is its implication for labeling initiatives. Milk fat labels have allowed consumers to act on a new set of preferences, thereby improving consumer welfare.

Keywords

demand systemKalman filtermilk demandrevealed preferencestructural change
Type
Articles
Information
Agricultural and Resource Economics Review , Volume 31 , Issue 1 , April 2002 , pp. 71 - 83
Copyright
Copyright © 2002 Northeastern Agricultural and Resource Economics Association 

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