The purpose of this study has been to specify and estimate a complete demand system for fresh fruits in Canada. The Almost Ideal Demand System (AIDS) is used as the functional form to accomplish the purpose of this study. Fresh fruit was assumed to be weakly separable from all other goods at the first stage of the budgeting process and a conditional demand analysis for fresh fruit was carried out at the second stage of the budgeting process, treating total expenditure as an exogenous variable. At the second stage, expenditure on fresh fruit is allocated to five groups: apples, bananas, grapefruit, oranges, and other fresh fruit. The other fresh fruit group includes: apricots, blueberries, cherries, grapes, lemons, pineapples, and strawberries. The second stage allocation was estimated utilising Zellner's iterative SURE procedure with homogeneity and symmetry conditions imposed on the restricted model. Data used in this study were obtained from Statistics Canada and consist of thirty-four observations from 1960--1993. / Results of the likelihood ratio test failed to reject the restricted model at 5% significant level. The R-square and Durbin-Watson test statistics indicated that the fit of the model is satisfactory. This study showed that a system of fresh fruit demand is inelastic to total expenditure, own-price, and cross-price effects. All the expenditure elasticity estimates were positive and significant over the study period, and indicate that apples, grapefruit, and oranges were relatively normal goods, while bananas and other fresh fruit category were relative luxury goods. Apples and oranges, grapefruit and other fruit category, oranges and other fruit category, bananas and other fresh fruit category are substitutes; and apples and other fresh fruit category, oranges and the other fruits category are complements.

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