Discrete/continuous consumer demand choices: An application to the U.S. domestic and imported white wine markets

Abstract

This study develops a model of domestic and imported white wine demand in the United States that incorporates demographic characteristics, usage rates, income, and price information. Heckman's two-step method is used to model the discrete/continuous nature of consumer demand for white wine in the U.S. market. The own-and cross-price elasticities developed in this study are, with one exception, inelastic, and generally agree with estimates derived by other authors. Income elasticities were also found to be inelastic and corresponded to the results of most previous studies.