Household food consumption and quality differentiation in demand system: an approach for endogenous prices.

摘要

The quality effects embodied in unit values might have strong repercussions on the estimation of the demand elasticities of aggregate food products, particularly when prices respond to supply conditions (endogeneity). In this article, the approximation to consumer quality preferences is carried out from the estimation of the measurement errors of unit values and the inverse demand analysis. The empirical application is based on six produce groups of fruit and vegetables in Spain. The results show that quality factors reinforce the differences of quantity effects (flexibilities) on the normalized prices. Using a test of flexibility relationships, our findings are consistent with those provided by alternative measures of quality as separable components of household expenditure.