Spanish food demand: a dynamic approach

Other empirical works have demonstrated that Spanish food demand seems to have a dynamic structure. However, the commonly used dynamization processes are too restrictive to explain the dynamic food consumers' behaviour. A more general model that is able to incorporate different dynamic structures (partial adjustment, first autoregressive, and static) and allows for direct estimation of long-run coefficients has been used. This general framework is applied to the Generalized Addilog Demand System (GADS) for annual Spanish data covering 1964 to 1991. Results indicate that an autoregressive GADS fits well the data, satisfying the theoretic restrictions. Finally, the expenditure and price elasticities are calculated.