An Empirical Evaluation of Egg Demand in the United States. (May 2021)

• Record Type: Journal Article
• Authors: Bakhtavoryan, Rafael; Hovhannisyan, Vardges; Devadoss, Stephen; Lopez, Jose
• Is Part Of: Journal of agricultural and applied economics. Volume 53:Number 2(2021)
• Page Start: 280
• Page End: 300
• Publication Date: 2021-05
• Subjects: compensating variation -- egg demand structure -- Exact Affine Stone Index model -- expenditure and price endogeneity; D12; Agriculture -- economics; Agriculture -- Economic aspects -- Periodicals; Agriculture -- Economic aspects -- Southern States -- Periodicals; Agriculture -- Economic aspects -- United States -- Periodicals; Agriculture -- Aspect économique -- Périodiques; Agriculture -- Aspect économique -- États-Unis -- Périodiques; Agrarökonomik; Agrarmarkt; USA; Welt; Agriculture -- Economic aspects; United States; Periodicals; 338.10975
• DOI: 10.1017/aae.2021.9
• Languages: English
• ISSNs: 1074-0708

Abstract

Abstract: We adopt an EASI model to estimate demand for omega-3, organic, cage-free, and conventional eggs in the United States. Our empirical framework accounts for demand inter-dependencies among these egg types, while allowing for unrestricted Engel curves, unobserved consumer heterogeneity, and a broader product and geographic coverage. We further address endogeneity of prices and expenditures and left-censoring induced by disaggregate data. Our results indicate that the demand for organic and cage-free eggs is price-elastic, while the demand for omega-3 and conventional eggs is price-inelastic. Additionally, we establish strong substitutability relationships between the eggs. Finally, we measure consumer welfare consequences of rising domestic egg prices brought by Japan's egg import tariff reductions.