Abstract

This paper applies the linearly approximate version of the Almost Ideal Demand System (La-Aids) on the data from Istat dataset since 2011 to 2020, by estimating income and price elasticities of three correlated categories of commodities that include goods from Italian nonalcoholic beverage industry: bottled waters, soft-drinks, and juices. Parameters of the system of equations has been estimated with the most suitable Seemingly Unrelated Regression-Sur. Our results indicate the income elasticity of the three goods is positive, by implying they are normal, even if they are on border-line between necessary and luxury goods. Bottled waters and juices are luxury goods, while soft-drinks are more inclined to be necessary goods. Moreover, soft-drinks and bottled waters are price-elastic goods, while, juices and bottled waters, or juices and soft-drinks, are price-inelastic goods. Results also reveal bottled waters are the most consumed at margin among the three goods, soft drinks and juices then follow.