ESTIMATING INTERRELATED DEMANDS FOR MEATS USING NEW MEASURES FOR GROUND AND TABLE CUT BEEF

Two systems of demand equations for meats are estimated using traditional and new measures of ground and table cut beef. The choice of disaggregation has a significant impact on estimated demand elasticities for hamburger and table cuts. A multivariate version of the P(E)-test is used as a nonnested test of the alternative specifications. The P(E)-test is an appropriate nonnested specification test when the models in question have different (but related) dependent variables. The P(E)-test rejects the nonfed beef model specification but does not reject the ground beef model, which uses the new measures of ground and table cut beef.