Masters Theses

Date of Award

8-1991

Degree Type

Thesis

Degree Name

Master of Science

Major

Agricultural Economics

Major Professor

Kimberly L. Jensen

Committee Members

David Eastwood, Greg Pompelli

Abstract

The objective of this study was to test for evidence of structural change during the years 1967-1986 in U.S. per capita demand for whole milk, lowfat milk, Juices and other beverages and in the U.S. per capita demand for butter, margarine, and salad and cooking oils. If the data, consisting of prices and consumption quantities, adhere to the behavior of a stable demand function, then the data should conform to a given set of criteria. These criteria are that the data do not violate the Weak Axiom of Revealed Preference (WARP) and do not violate the Strong Axiom of Revealed Preference (SARP). Violations of WARP and SARP suggest that factors other than changes in prices and expenditures have influenced changes in consumption patterns. A nonparametric approach to testing for violations within the consumption patterns was used.

The results showed that whole milk and lowfat milk consumption patterns were consistent with stable preferences under utility maximization. Therefore changes in consumption patterns among these beverages were explained by changes in prices and expenditures. Addition of juices into the group introduced violations, but they were small in magnitude. Inclusion of "other beverages'' introduced numerous inconsistencies. The largest violation in any of the beverages groupings was by less than seven percent. Consumption patterns among all of the groupings of butter, margarine, and salad and cooking oils either met or nearly met the criteria of revealed preference.

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