Estimating household demand for olive oil in Greece

Abstract

The paper estimates the monthly household demand for olive oil in Greece byeconometrically analysing in a two-stage Heckman framework, cross-sectionalmicroeconomic data solicited via the Household Budget Survey of 2011. It findsthat quantity increases as (a) its price decreases, and (b) income or the quantity ofseed oil, olive pomace oil, and margarine increase. Spatial, seasonal, and a coupleof nationality (origin) effects are detected. Price elasticity is estimated at 1.5-1.7,which suggests that conditions are to some degree favourable towards theformationof a profit maximising monopoly exerting market power in Greece.