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Economics Research International
Volume 2012 (2012), Article ID 942748, 11 pages
http://dx.doi.org/10.1155/2012/942748
Research Article

Demand for Fresh Vegetables in the United States: 1970–2010

1Department of Agribusiness, Applied Economics, and Agriscience Education, L.C. Cooper Jr. International Trade Center, C.H. Moore Agricultural Research Facility, 400 N. Beech Street, Greensboro, NC 27401, USA
2Department of Agribusiness, Applied Economics and Agriscience Education, Room A29, C.H. Moore Agricultural Research Facility, North Carolina A and T State University, 1601 E. Market Street, Greensboro, NC 27411, USA
3Department of Agribusiness, Applied Economics and Agriscience Education, Room A25, C.H. Moore Agricultural Research Facility, North Carolina A and T State University, 1601 E. Market Street, Greensboro, NC 27411, USA

Received 27 February 2012; Revised 14 September 2012; Accepted 18 September 2012

Academic Editor: Anthony N. Rezitis

Copyright © 2012 Cephas Naanwaab and Osei Yeboah. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This paper analyzes a demand system for eight major fresh vegetables in the USA using the most recently available dataset (1970–2010). A first-differenced Linear Approximate Almost Ideal Demand System (LA-AIDS) is applied to estimate price and expenditure elasticity of demand, imposing homogeneity and symmetry restrictions. We find that not only are consumers responsive to changes in own-prices but they also respond significantly to changes in prices of other fresh vegetables that are consumed together. Conditional budget share allocation to lettuce, cabbage, and celery has declined, while the share of the consumer dollar going to tomatoes, peppers, and onions has increased over the period. Except for cabbage, all own-price elasticity estimates are negative, less than unity in absolute value, and statistically significant. About half of the 56 cross-price elasticities are negative and significant, indicating high, albeit asymmetric, complementarities among these fresh vegetables. Expenditure elasticities are positive and significant for all but one of these eight vegetables. Over the period under consideration, demand and expenditure elasticities remained fairly stable.