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A Demand Analysis of the Korean Wine Market Using an Unrestricted Source Differentiated LA/AIDS Model*

Published online by Cambridge University Press:  08 June 2012

Youngjae Lee ,
P. Lynn Kennedy  and
Brian M. Hilbun
Youngjae Lee
Affiliation:
Department of Agricultural Economics and Agribusiness, LSU AgCenter, Baton Rouge, Louisiana 70803, Tel. (225) 578–2754, e-mail:ylee@agcenter.lsu.edu.
P. Lynn Kennedy
Affiliation:
Department of Agricultural Economics and Agribusiness, LSU AgCenter, Baton Rouge, Louisiana 70803, Tel. (225) 578–2726, e-mail:lkennedy@agcenter.lsu.edu (corresponding author).
Brian M. Hilbun
Affiliation:
Department of Agricultural Economics and Agribusiness, LSU AgCenter, Baton Rouge, Louisiana 70803, Tel. (225) 578–0345, e-mail: bhilbun@agcenter.lsu.edu.
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Abstract

An unrestricted source differentiated LA/AIDS model was used to estimate Korean wine demand. In doing so, this study tested the null hypotheses of product aggregation, block separability and substitutability. The test results show that the unrestricted source differentiated model is significantly different from the aggregated model, separated model, and restricted source differentiated model at the conventional level. By using this system-wide model, this study estimated price and expenditure elasticities to identify the price effect on Korean wine consumption. (JEL Classification: F10, F11, F13)

Type
Articles
Information
Journal of Wine Economics , Volume 4 , Issue 2 , Winter 2009 , pp. 185 - 200
Copyright
Copyright © American Association of Wine Economists 2009

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