Empirical Economics

, Volume 57, Issue 4, pp 1469–1493 | Cite as

Efficiency of correction for sample selection in QUAIDS models: an example for the fish demand in Germany

  • Julia BronnmannEmail author
  • Stefan Guettler
  • Jens-Peter Loy


This paper investigates the performance of the Quadratic Almost Ideal Demand System (QUAIDS) with and without accounting for the consistent two-step estimation for censoring of the dependent variable as well as the use of quality-adjusted prices. The demand systems are estimated for a commodity that has a relatively low consumption level in the German market, fish. Thus, the zero observations are quite high and the need of a correction procedure is more urgent. The results show differences in the applied methods. It turns out that ignoring consistent two-step estimation and quality-adjusted prices leads to less elastic demand estimates.


Censored systems Food demand Price elasticities Shonkwiler and Yen procedure QUAIDS 

JEL Codes

C32 C33 D12 Q22 



The authors acknowledge financial support from the project “Kobe-Fisch” from the Bundesministerium für Bildung und Forschung, project no: 01UT1410. The authors would like to thank the anonymous referee and the Editor Robert Kunst for their helpful comments.


  1. Abdulai A (2002) Household demand for food in Switzerland. A quadratic almost ideal demand system. Swiss J Econ Stat 138(1):1–18Google Scholar
  2. Akbay C, Boz I, Chern WS (2007) Household food consumption in Turkey. Eur Rev Agric Econ 34(2):209–231CrossRefGoogle Scholar
  3. Asche F, Bennear L, Oglend A, Smith M (2012) U.S. shrimp market integration. Mar Resour Econ 27:181–192CrossRefGoogle Scholar
  4. Banks J, Blundell R, Lewbel A (1997) Quadratic Engel curves and consumer demand. Rev Econ Stat 79(4):527–539CrossRefGoogle Scholar
  5. Barnett WA, Serletis A (2008) Consumer preferences and demand systems. J Econom 147:210–224CrossRefGoogle Scholar
  6. Blundell R, Pashardes P, Weber G (1993) What do we learn about consumer demand patterns from micro data? Am Econ Rev 83(3):570–597Google Scholar
  7. Bronnmann J (2016) The German whitefish market: an application of the LA/AIDS model using retail-scanner-data. Aquac Econ Manag 20(4):330–341CrossRefGoogle Scholar
  8. Bronnmann J, Loy J-P, Schroeder K-J (2016a) Characteristics of Demand structure and preferences for wild and farmed seafood in Germany: an application of QUAIDS modeling with correction for sample selection. Mar Resour Econ 31(3):281–300CrossRefGoogle Scholar
  9. Bronnmann J, Ankamah-Yeboah I, Nielsen M (2016b) Market Integration between farmed and wild fish: Evidence from the Whitefish market in Germany. Mar Resour Econ 31(4):421–432CrossRefGoogle Scholar
  10. Chidmi B, Hanson T, Nguyen G (2012) Substitutions between fish and seafood products at the US national retail level. Mar Resour Econ 27(4):359–370CrossRefGoogle Scholar
  11. Cox TL, Wohlgenant MK (1986) Prices and quality effects in cross-sectional demand analysis. Am J Agr Econ 68(4):908–919CrossRefGoogle Scholar
  12. Deaton A (1986) Demand analysis. In: Griliches Z, Intrilligator MD (eds) Handbook of econometrics Vol. 3. Elsevier Science Publishers B.V., Amsterdam, pp 1767–1839CrossRefGoogle Scholar
  13. Deaton A, Muellbauer J (1980a) An almost ideal demand system. Am Econ Rev 70(3):312–326Google Scholar
  14. Deaton A, Muellbauer J (1980b) Economics and consumer behavior. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  15. Destatis (2016) Statistisches Bundesamt, Wiesbaden. Retrieved from Accessed 14 Jan 2018
  16. Dey MM (2000) Analysis of demand for fish in Bangladesh. Aquac Econ Manag 4(1):63–79CrossRefGoogle Scholar
  17. Dey MM, Briones RM, Ahmed M (2005) Disaggregated analysis of fish supply, demand, and trade in Asia: baseline model and estimation strategy. Aquac Econ Manag 9:113–139CrossRefGoogle Scholar
  18. Dey MM, Yolanda TG, Kumar P, Piumsombun S, Haque MS, Luping L, Koeshendrajana S (2008) Demand for fish in asia: a cross-country analysis. Aust J Agric Resour Econ 52(3):321–338CrossRefGoogle Scholar
  19. Dey MM, Alam MF, Paraguas F (2011) A multistage budgeting approach to the analysis of demand for fish: an application to Inland Areas of Bangladesh. Mar Resour Econ 26(1):35–58CrossRefGoogle Scholar
  20. Dong D, Shonkwiler JS, Capps O (1998) Estimation of demand functions using cross-sectional household data: the problem revisited. Am J Agr Econ 80(3):466–473CrossRefGoogle Scholar
  21. Ecker O, Qaim M (2011) Analyzing nutritional impacts of policies: an empirical study for Malawi. World Dev 39(3):412–428CrossRefGoogle Scholar
  22. Edgerton DL (1993) On the estimation of separable demand models. J Agric Resour Econ 18(2):141–146Google Scholar
  23. Edgerton DL (1997) Weak separability and the estimation of elasticities in multistage demand systems. Am J Agr Econ 79(1):62–79CrossRefGoogle Scholar
  24. Fousekis P, Revell BJ (2005) Retail Fish Demand in Great Britain and its Fisheries Management Implications. Mar Resour Econ 19:495–510CrossRefGoogle Scholar
  25. Gallet CA (2009) The demand for fish: a meta-analysis of the own-price elasticity. Aquac Econ Manag 13(3):235–245CrossRefGoogle Scholar
  26. Gao XM, Wailes EJ, Cramer GL (1996) A two-stage rural household demand analysis: microdata evidence from Jiangsu Province, China. Am J Agric Econ 78(3):604–613CrossRefGoogle Scholar
  27. Garcia YD, Dey MM, Navarez S (2005) Demand for fish in the Philippines: a disaggregated analysis. Aquac Econ Manag 9(1):141–168CrossRefGoogle Scholar
  28. Gorman WM (1959) Separable utility and aggregation. Econometrica 27(3):469–481CrossRefGoogle Scholar
  29. Greene W (2003) Econometric analysis, 5th edn. Prentice Hall, New JerseyGoogle Scholar
  30. Heien D, Wessells C (1990) Demand systems estimation with microdata: a censored regression approach. J Bus Econ Stat 8(3):365–371Google Scholar
  31. Henneberry SR, Piewthongngam K, Qiang H (1999) Consumer food safety concerns and fresh produce consumption. J Agric Resour Econ 24(1):98–113Google Scholar
  32. Houthakker HS (1952) Compensated changes in quantities and qualities consumed. Rev Econ Stud 19(3):155–164CrossRefGoogle Scholar
  33. Intriligator MD (1978) Econometric models, techniques, and applications. North-Holland Publishing Company, AmsterdamGoogle Scholar
  34. Jaffrey S, Pascoe S, Robinson C (1999) Long-Run price flexibilities for high value UK fish species: a cointegration systems approach. Appl Econ 31:473–481CrossRefGoogle Scholar
  35. Kumar P, Dey MM (2004) A study on modelling of household demand for fish in India. Indian J Agric Econ 59(3):465–475Google Scholar
  36. Lambert R, Larue B, Yélou C, Criner G (2006) Fish and meat demand in Canada: regional differences and weak separability. Agribusiness 22(2):175–199CrossRefGoogle Scholar
  37. Lau LJ (1986) Functional forms in econometric model building. In: Griliches Z, Intrilligator MD (eds) Handbook of econometrics Vol. 3. Elsevier Science Publishers B.V., Amsterdam, pp 1515–1566CrossRefGoogle Scholar
  38. Lewbel A (1991) The rank of demand systems: theory and nonparametric estimation. Econometrica 59(3):711–730CrossRefGoogle Scholar
  39. Maddala GS (1983) Limited-dependent and qualitative variables in econometrics. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  40. Molina JA (1997) Two-stage budgeting as an economic decision making process for Spanish consumers. Manag Decis Econ 18:27–32CrossRefGoogle Scholar
  41. Nielsen M, Smit J, Guillen J (2009) Market integration of fish in Europe. J Agric Econ 60(2):367–385CrossRefGoogle Scholar
  42. Norman-López A, Asche F (2008) Competition between Imported Tilapia and US Catfish in the US Market. Mar Resour Econ 23(2):199–214CrossRefGoogle Scholar
  43. Okrent AM, Alston JM (2011) Demand for food in the United States: A review of literature, evaluation of previous estimates, and presentation of new estimates. Giannini Foundation Monograph 48Google Scholar
  44. Park JL, Capps O (1997) Demand for prepared meals by U.S. households. Am J Agr Econ 79(3):814–824CrossRefGoogle Scholar
  45. Park JL, Holcomb RB, Raper KC, Capps O (1996) A demand system analysis of food commodities by U.S. households segmented by income. Am J Agr Econ 78(2):290–300CrossRefGoogle Scholar
  46. Poi BP (2008) Demand system estimation: update. Stata J 8(4):554–556CrossRefGoogle Scholar
  47. Ryll E (1984) Bestimmungsgründe und Elastizitäten der Nachfrage nach Fisch und Fischwaren in der Bundesrepublik Deutschland. Berichte über Landwirtschaft 62: Paul Parey, Hamburg, Berlin pp 208–221Google Scholar
  48. Shonkwiler JS, Yen ST (1999) Two-step estimation of a censored system of equations. Am J Agr Econ 81(4):972–982CrossRefGoogle Scholar
  49. Sommer U (1985) Quantitative Analyse der Nachfrage nach Fisch und Fischwaren in der Bundesrepublik Deutschland. Berichte über die Landwirtschaft 63: 82–101. Paul Parey, Hamburg, Berlin pp 1965–1981Google Scholar
  50. Strotz RH (1957) The empirical implications of a utility tree. Econometrica 25(2):269–280CrossRefGoogle Scholar
  51. Strotz RH (1959) The utility tree—a correction and further appraisal. Econometrica 27(3):482–488CrossRefGoogle Scholar
  52. Theil H (1952) Qualities, prices and budget enquiries. Rev Econ Stud 19(3):129–147CrossRefGoogle Scholar
  53. Thiele S (2001) Ausgaben- und Preiselastizitäten der Nahrungsmittelnachfrage auf Basis von Querschnittsdaten: Eine Systemschätzung für die Bundesrepublik Deutschland. Agrarwirtschaft 50(2):108–115Google Scholar
  54. Thiele S (2008) Elastizitäten der Nachfrage privater Haushalte nach Nahrungsmitteln - Schätzung eines AIDS auf Basis der Einkommens- und Verbrauchsstichprobe 2003. Agrarwirtschaft 57(5):258–268Google Scholar
  55. Thong NT (2012) An inverse almost ideal demand system for mussels in Europe. Mar Resour Econ 27(2):149–164CrossRefGoogle Scholar
  56. Valderrama D, Anderson JL (2009) Market interactions between aquaculture and common-property fisheries: recent evidence from the Bristol Bay sockeye salmon fishery in Alaska. J Environ Econ Manag 59(2):115–128CrossRefGoogle Scholar
  57. White H (1980) A heteroscedasticity consistent covariance matrix and a direct test for heteroscedasticity. Econometrica 46(4):817–838CrossRefGoogle Scholar
  58. Wildner S, von Cramon-Taubadel S (2000) Die Bedeutung von Veränderungen der Nachfrage für die Wettbewerbsfähigkeit des Agrarsektors: Erste Ergebnisse einer neuen Nachfrageschätzung. Schriften der GEWISOLA 36: Wettbewerbsfähigkeit und Unternehmertum in der Land- und Ernährungswirtschaft. Landwirtschaftsverlag Münster-Hiltrup: 63–74Google Scholar
  59. Xie J, Kinnucan HW, Myrland Ø (2008) The effects of exchange rates on export prices of farmed Salmon. Mar Resour Econ 23(4):439–457CrossRefGoogle Scholar
  60. Xie J, Kinnucan HW, Myrland Ø (2009) Demand elasticities for farmed salmon in world trade. Eur Rev Agric Econ 36(3):425–445CrossRefGoogle Scholar
  61. Yen ST, Kan K, Su SJ (2002) Household demand for fats and oils: two step estimation of a censored emand system. Appl Econ 14:1799–1806CrossRefGoogle Scholar
  62. Yen ST, Lin BH, Smallwood DM (2003) Quasi- and simulated-likelihood approaches to censored demand systems: food consumption by food stamp recipients in the United States. Am J Agr Econ 85(2):458–478CrossRefGoogle Scholar
  63. Zheng Z, Henneberry SR (2010) An analysis of food grain consumption in urban Jiangsu Province, China. J Agric Appl Econ 42(2):337–355CrossRefGoogle Scholar

Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Department of Environmental, Resource and Ecological EconomicsChristian-Albrechts-University Kiel, Institute of EconomicsKielGermany
  2. 2.Department of Agricultural Market AnalysisChristian-Albrechts-University Kiel, Institute of Agricultural EconomicsKielGermany

Personalised recommendations