A MICROECONOMETRIC ANALYSIS OF CONSUMER TASTE DETERMINATION AND TASTECHANGE FOR BEEF

A new method for modeling determination of consumer taste and a test o f the taste-change hypothesis is presented. Taste varies across househ olds because of differences in household characteristics. The method h as a Multiple Indicator and Multiple Cause model interpretation, with taste as an unobserved variable. Taste indicators are residuals of reg ular household demand functions, the factors unexplained by prices and household expenditures. Taste-cause variables are household character istics and other variables. The proposed model is applied to U.S. beef demand using household data. Results show that structural taste chang es, unexplained by changes in demographic composition, decreased 8% fr om 1977 to 1987.