Book excerpt: Extract: A complete system of budget share equations for U.S. food consumption was estimated using alternative specifications of the Almost Ideal Demand System (AIDS) and four food groups. The specifications accounted for habits, through a systematic change in one of the parameters, and first-order autocorrelation. The theoretical structure of the AIDS enabled the utility maximization framework to remain intact, satisfied the theoretical properties pertaining to demand systems, and provided a way to ascertain the amount that habits affected current consumption. Likelihood ratio tests indicated that both habits and autocorrelation were present.