MODELING STRUCTURAL CHANGE IN FRENCH BEEF, POULTRY, AND FISH DEMAND: A MARKOV SWITCHING AIDS MODEL

Olivier Allais and Veronique Nichele

No 20185, 2004 Annual meeting, August 1-4, Denver, CO from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: Structural change in the French demand of beef, poultry and fish is originally investigated. Rather than applying the traditional switching AIDS (S-AIDS) model, we reconsider the analysis of structural change through the Markov switching AIDS (MS-AIDS). The main feature of this model is that the switching mechanism is controlled by an unobserved variable that follows a Markov chain. As such, it captures more complex dynamic patterns than does the S-AIDS model. The MS-AIDS and the S-AIDS are compared to determine which model provides the better explanation of beef, poultry, and fish dynamic demand. We find that a MS-AIDS displaying habit formation detects the two mad cow crises in 1996 and 2000 and may identify the structural changes emanating from nutritional recommendations.

Keywords: Demand; and; Price; Analysis (search for similar items in EconPapers)
Pages: 30
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea04:20185

DOI: 10.22004/ag.econ.20185

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