Consumer demand for alcoholic beverages in British Columbia, with and without free trade in wine
Date
1987
Authors
Alley, Andrew G.
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Abstract
An "Almost Ideal Demand System" of consumer demand functions is estimated using monthly data from April 1981 to August 1986 on the sales of various types of alcoholic beverages in British Columbia. The estimation results are used to test the properties of consumer theory and to interpret consumer preferences, both of which are compared to the evidence reported in earlier literature. The demand results are then combined with an analysis of wine production costs to construct a simple industry model. Comparative statics is used to obtain estimates of the direct economic effects of changes in policies assumed to accompany the tranĀsition to bilateral or multilateral free trade in wine.