HOUSEHOLD SIZE AND COMPOSITION IMPACTS ON MEAT DEMAND IN MEXICO: A CENSORED DEMAND SYSTEM APPROACH

The proposed paper adopts the censored demand system approach of Lee and Pitt (1986) to examine the structure of Mexican food demand. This approach uses the concept of virtual prices to explain specific purchase patterns. The contribution of our selected paper is the incorporation of the endogenous equivalence scale function proposed by Phlipps (1998) within this censored system. The contribution of this analysis is not only in terms of the use of an endogenous scaling function within a censored demand system, but we also will be use simulated maximum likelihood techniques which allows for the specification and estimation of significantly larger sized demand systems without the imposition of restrictive distributional assumptions on the equation error terms. We use a Gibbs sampling techniques to evaluate higher order truncated distributions required to implement the Lee and Pitt (1986) model specification.