The issue of identification of the parameter α0 in the price index of the Almost Ideal Demand System (AIDS) is examined. In nearly all empirical studies, the model’s likelihood function has been extremely flat in α0, and this parameter has not been able to be estimated. Assumed values are...

A single equation demand and a sourced differentiated Almost Ideal Demand System (AIDS) model are employed to investigate factors influencing the dairy import demand in China and competition among different exporters from 2002 to 2012. Results from both models are compared and own-price,...