Simultaneity and Structural Change in U.S. Meat Demand

Abstract

Abstract An inverse of the Almost Ideal Demand System, the IAIDS, is developed in order to test the endogeneity of prices and quantities in the U.S. meat demand system. The IAIDS has all the desirable theoretical properties of the AIDS except aggregation from the micro to the market level. Using annual data, both prices and quantities appear to be endogenous within the entire meat market. Including livestock production costs and technical change indicators as instruments eliminates evidence of a mid 1970s demand change.