Estimating U.S. consumer preferences for meat with a flexible utility function

Abstract

Direct and indirect translog utility functions provide budget share equations which are both flexible and consistent with the theory of utility maximization. These forms are attractive for modelling consumer behavior. Because of their flexibility they are ideal for testing hypotheses such as additivity of preferences. In this paper we use the translog methodology to analyze U.S. consumption of the four principal categories of meat-fish, beef, poultry, and pork. We decisively reject the hypothesis of additivity. However, further testing for partial additivity reveals that (beef) and (fish, poultry, pork) are additively separable subgroups of meat.