a globally flexible almost ideal demand system the almost ideal demand system is combined with the fourier expenditure system subject to the assumption that preferences are of the price independent generalized logarithmic class the resulting demand system has the desirable features of each of its components aggregate demand equations are consistent with preferences of a representative consumer and consistent estimates of elasticities are obtained for all observed prices application of the new demand system to u s consumption of meats and fish reveals that it fits the data well and that the restriction to the usual specification is rejected

consumer research with big data applications from the food demand survey foods in three separate studies based on data from the food demand survey foods which has been conducted monthly for over three years this paper explores heterogeneity in preference across consumers in traditional demand systems heterogeneity in preferences over time in choice experiments and the tail of the distribution for a particular food consumption pattern vegetarianism results show that elasticities of demand for food at home and food away from home vary widely across different groups of consumers defined by a priori cluster analysis based on demographic and attitudinal variables results from a choice experiment are found to depend on when the experiment was conducted and on the market prices prevailing at the time of the survey given the large sample of consumers observed over time there is sufficient data to demographically characterize a small portion of the population vegetarians using traditional logit models and a machine learning method a classifications tree

the financial effects of fuel adjustment clauses on electric utilities during the 1970s fuel adjustment clauses facs were adopted by many electric utilities as a means of adjusting electricity prices when per unit fuel costs changed recently many state regulators have questioned the need for facs since fuel costs have become more stable some have been reluctant to abolish facs because of fear that an electric utility s financial risk will increase and with it the cost of capital for the utility this article shows empirically that the risk effects of facs may be quite small and that risk could actually decline if an fac is removed however a wealth effect may exist that should be considered before an fac is abolished copyright 1990 by the university of chicago

bayesian estimation of a censored linear almost ideal demand system food demand in pakistan a censored linear almost ideal demand system for food is estimated with a bayesian markov chain monte carlo procedure using a sample of urban households from pakistan all own price elasticities but one are found to be negative and all total food expenditure elasticities are found to be positive with a high posterior probability there is a mix of gross complements and substitutes among the food products while net substitution is the predominant pattern household characteristics play a role in food expenditures and regional differences exist these demand elasticities can inform policy deliberations by the national government and international organizations welfare policy and market analyses require estimation of a complete system of demand equations often from household survey data unlike aggregate time series which are often not conducive to precise estimation of crossprice effects due largely to collinearity of prices cross sectional data offer an important advantage in deriving better elasticity estimates detailed demographic characteristics collected in cross sectional surveys allow accommodation of heterogeneous preferences and the typically large sample also provides the degrees of freedom to estimate a large and disaggregate demand system the use of microdata however is often complicated by censoring in the dependent variables this censored data feature most notable in demand estimation at the disaggregate level needs to be accommodated in order to obtain consistent parameter and elasticity estimates deaton 1986 p 1809 noted that the issue of zero observations is one of the most pressing panagiotis kasteridis is postdoctoral research associate and steven t yen is a professor at the university of tennessee cheng fang is an economist at the global information and early warning service food and agriculture organization fao of the united nations research was supported in part by usda s cooperative agreements nos 58 5000 7 0123 and 43 3aem 2 80063 the authors benefited from constructive comments by two anonymous reviewers and a blueprint for the monte carlo simulation by editor jeffrey h dorfman the article reflects the views of the authors not necessarily those of the usda or fao or its member

zero expenditures and the estimation of engel curves over the brief interview periods typical of budget surveys such as the u k family expenditure survey households recorded expenditures are liable to be misleading indicators of their underlying consumption most starkly a household may not be observed to purchase commodities that it nevertheless consumes this paper considers the implications of such measurement errors for the estimation of demand systems and derives a consistent estimator for the special case of linear engel curves

sectoral implications of farm program modifications the overall and distributional effects of farm programs and selected revisions are examined using a mathematical programming sector model the model incorporates market distortions caused by price supports target prices program participation deficiency payments and marketing loans current farm programs are found to increase producer prices depress consumer prices and in turn result in excess production and higher consumption and exports domestic and foreign consumers as well as domestic producers are subsidized by farm programs social deadweight loss occurs as government payments exceed welfare benefits received by consumers and producers society as a whole benefits from reductions in program provisions

gaitl a generalised version of the almost ideal and translog demand systems abstract ai and translog are popular models in empirical demand literature in this paper we present a generalised model gaitl which nests both and moreover the lewbel 1989 demand system estimation and statistical testing based on italian household data suggests rejection of both in favour of the gaitl also when demographic effects are considered

evaluating prior beliefs in a demand system the case of meat demand in canada an almost ideal demand system for meats is estimated using canadian data a bayesian approach is used to impose inequality restrictions on substitution elasticities via monte carlo integration and importance sampling in order to conform with prior beliefs about curvature and monotonicity restrictions and substitution relationships results are more consistent with the concavity and monotonicity restrictions from demand theory than with the added restriction that all meats are substitutes

quality quantity and spatial variation of price this paper develops and implements a method for estimating price elasticities of demand using cross sectional household survey data geographically clustered households report unit values which when corrected for quality effects and for measurement error indicate the underlying spatial variation in prices and can be matched to variation in demand patterns a simple model of quality choice is proposed while the correction for measurement error exploits the clustered design of such surveys data from a 1979 household survey from the ivory coast are used to estimate price elasticities for beef meat fish cereals and starches copyright 1988 by american economic association

demand systems estimation with microdata a censored regression approach demand systems estimation increasingly makes use of household level microdata mainly to measure the effects of demographic variables data based on these household expenditure surveys present a major estimation problem for any given household many of the goods have zero consumption implying a censored dependent variable techniques which do not take this censored dependent variable into account will yield biased results we utilize a censored regression approach that is computationally simple consistent and asymptotically efficient the results are then presented and compared with those obtained using an uncensored technique

how feasible is carbon sequestration in korea a study on the costs of sequestering carbon in forest in recent years carbon sequestration has become a more attractive policy in korea due to the increasing trend of marginal cropland and enhanced public awareness on adverse climate change phenomena this study aims to calculate the unit costs of carbon sequestration programs through afforestation in korea and examine the cost effectiveness of programs the basis of our simulation is an econometric land use share model and province level of aggregated panel data are used for model estimation four scenarios are considered depending on whether the program includes the harvest and which tree species are planted the approach of sequestration program is to pay the landowners to convert their lands to forest for a period of time in exchange of fixed annual payment in addition to tree establishment cost our results show that the unit cost varies from 122 to 486 per ton of carbon stored depending on the scenarios and payment levels we found that the carbon sequestration can be a cost effective mitigation policy in korea although it is not the least cost option

food consumption in mexico demographic and economic effects abstract disaggregated demand analysis is beginning to receive increased importance in food policies for developing countries using household data from the mexican expenditure survey we estimate the income and demographic effects on expenditures for nine aggregate food categories in addition we use a probit model to explore the effect of these variables on the purchase decision for five high protein supplying goods the results indicate that demographic variables as well as income have important effects in determining food expenditures we analyse these effects and indicate the role they might play in food policy programmes such as pronal

maintaining and testing separability in demand systems we derive a general elasticity representation of the necessary and sufficient conditions for direct weak separability of the utility function parametric restrictions required to implement the separability conditions are presented for three common demand systems the almost ideal translog and rotterdam our empirical application uses the rotterdam model to test a few separable structures within a complete u s demand system emphasizing food commodities results based on size corrected likelihood ratio tests provide support for commonly used separability assumptions about food and meat demand

distributional effects of maize price increases in malawi abstractin the wake of highly volatile world prices of staple commodities we examine the impacts of increases in maize prices on various categories of households in malawi using household level data changes in household income are calculated taking into account the net maize production status of the household and food price elasticities estimated from a censored demand system while maize price increases have unequivocal deleterious effects on the incomes of urban households rural households experience differential impacts net producing households in rural areas benefit from price increases with households above the poverty line obtaining proportionally higher incomes

optimal regulation under uncertainty this paper is concerned with the problem of price regulation when demand is uncertain uncertainty gives rise to substantial difficulties in determining both the return a firm s owners should be provided and a set of prices capable of producing that return we argue that conventional approaches to price regulation are incapable of attaining the economically desirable objectives of efficiency and an equitable return to investors the deficiencies in current practices are attributable to the separation of the risk measurement return determination and price setting activities in the conventional approach we present a model of the regulated firm that synthesizes contemporary financial market theory and the theory of the firm under uncertainty in our approach the income stream produced by the firm is valued ex ante in the financial market according to investors perceptions and preferences over risk return characteristics we portray the firm as producing risk and return by choosing among available production technologies to maximize its market value given the prices set by regulators within this framework it is shown that regulators can choose the lowest prices consistent with an equitable return to investors we also show that prices so chosen induce the choice of the optimal technology by the firm in the traditional regulatory framework as thoroughly described and explained by bonbright 3 the goal of regulators is to set rates in such a way that all costs are covered including a return on invested capital commensurate with the risk of equity investment determination of the latter is difficult at best it is generally agreed that 1 the fair return depends on risk 2 the return required by investors as compensation for risk bearing is most accurately measured by observing the returns to competitive firms in otherwise similar circumstances and 3 estimation of required returns by observation of other regulated firms is generally inappropriate since the risk and regulation effects are confounded more recently myers 13 has argued for the application of finance theory to rate determination within the traditional regulatory framework in particular he argues that the capital asset pricing model capm developed by sharpe 14 lintner 9 and mossin 12 is especially well suited for this purpose since a single quantitative measure of risk is relevant in that model further since the capm offers an explicit equilibrium risk return relationship information about the risks and returns of all firms can be directly employed in determining the fair return to a regulated firm

nesting the aids and translog demand systems this paper shows that there exists a relatively simple demand model that is consistent with utility maximization and has nested within it both the almost ideal demand system and translog models this model is exactly aggregated then estimated using aggregate u s demand data the results are used to test the relative adequacy of the almost ideal demand system and translog models copyright 1989 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

no news is good news stochastic parameters versus media coverage indices in demand models after food scares we develop a stochastic parameter approach to model the time varying impacts of food scares on consumption as an alternative to the inclusion of news coverage indices in the demand function we empirically test the methodology on data from four food scares the 1982 heptachlor milk contamination in oahu hawaii and the bovine spongiform encephalopathy and two escherichia coli scares on u s meat demand over the period 1993 9 results show that the inclusion of time varying parameters in demand models enables the capturing of the impact of food safety information and provides better short term forecasts

food demand in mexico an application of the amemiya tobin approach to the estimation of a censored food system the modeling of micro level food demand patterns requires not only allowing for household heterogeneity but also addressing the problem of censoring in this article we present a variation of the amemiya tobin framework for estimating a censored demand system that allows for household heterogeneity the unique aspect of our approach is the use of a procedure that ensures the adding up of both latent and observed expenditure shares and also imposes expenditure share nonnegativity this system is applied to an analysis of food demand based on a random sample of urban mexican households

disaggregated household meat demand with censored data previous research on meat demand has generally used highly aggregated data across time products and consumers however meat products across species are likely stronger substitutes than some products from the same species further demand for specific meat products would be expected to respond differently to market information about food safety or other events this study uses monthly consumer panel data collected between 1992 and 2000 to estimate a disaggregated meat product demand system the use of the expectations maximization algorithm is introduced to estimate a demand system that adjusts for the econometric problem of censored data resulting from purchased shares of some products by individuals often being equal to zero results indicate that certain individual meat products have noticeably different own price elasticities than existing aggregate meat product estimates of their respective species some individual meat products have stronger substitutes across species than within species e g be

estimating a demand system with nonnegativity constraints mexican meat demand a new information based approach for estimating systems of many equations with nonnegativity constraints is presented this approach called generalized maximum entropy gme is more practical and

tax mix corners and other kinks abstractthis paper models the local tax mix determination process in the presence of statewide fiscal limitations the decentralized government finance archetype and shows how excess sensitivity of local public spending to grants the conventionally and somewhat misleadingly termed flypaper effect arises in the constrained tax mix irrespective of whether lower or upper limits bind and how it cannot in general be taken as a symptom of local government overspending an empirical application to italian province panel data provides consistent evidence of the role of corner solutions produced by two sided tax limits in explaining the sensitivity of local public expenditures to grants

minimum cost strategies for sequestering carbon in forests this paper examines the costs of meeting explicit targets for increments of carbon sequestered in forests when both forest management decisions and the area of forests can be varied costs are estimated as welfare losses in markets for forest and agricultural products results show greatest change in management actions when targets require large near term flux increments while land area change is largest when long term increments are needed marginal costs per tonne of carbon flux do not vary greatly with the form of the target and are similar to findings of earlier studies for comparable size of average carbon flux increment

the producer welfare effects of trade liberalization when goods are perishable and habit forming the case of asparagus asparagus is a perishable highly seasonal crop we find that out of season imports of asparagus caused habit formation that increased demand in the u s growing seasons we find that habit effects offset about 64 of the welfare losses to u s asparagus producers from increased mexican imports under nafta and all of the u s producer welfare losses from increased peruvian imports under the andean trade preference act we estimate that the u s producer welfare losses from nafta are less than the annualized value of market loss assistance provided them in the 2008 farm bill jel classifications d12 f130 q17 q18

fruit and vegetable consumption patterns a segmentation approach in this article we study the heterogeneity of fruit and vegetable consumption patterns in france a finite mixture of aids models is used to describe food demand patterns revealing different preferences over distinct classes we obtained six different clusters which reflect specific socio demographic characteristics and different income and price elasticities this approach is appropriate for targeting specific public nutritional policies our main results show that unlike the other clusters in which the usual price and income policy tools may be used the lowest income cluster with the lowest consumption remains insensitive to economic variables

climate change interactions with agriculture forestry sequestration and food security climate change can negatively affect crop productivity decreasing food production in many regions across the world literature suggests forest carbon sequestration fcs is a good alternative to mitigate climate change due to its ability to sequester carbon at low cost nevertheless fcs subsidies have not been addressed together with impacts on food security and climate change reduced crop yields in our multidisciplinary work we collected the crop yield shocks from global circulation crop modeling we also developed a new version of a computable general equilibrium model for the economic analysis thus we evaluate the global economic impacts of using carbon taxes and fcs to achieve 50 emission reductions we find that implementing an aggressive fcs incentive can cause substantial increases in food prices because of land competition between forest and crop production without climate induced yield reductions fcs is attractive but not with the yield reductions with the climate induced yield shocks food price increases are huge so large that it is clear this approach could not be adopted in the real world the results cry out for investment in agricultural research on climate adaptation our findings suggest economic well being falls more without mitigation than with 50 emission reductions

native american obesity an economic model of the thrifty gene theory native american obesity is hypothesized to result from three potential causes 1 a genetic predisposition or the thrifty gene 2 a rational addiction to nutrients and 3 dietary adjustment costs these hypotheses are tested using a two stage household production approach and scanner data from a panel of native and non native supermarkets nutrient intake for both groups is strongly influenced by adjustment costs native americans tend to place higher implicit valuations on protein relative to fats and carbohydrates compared to non natives consequently reductions in real carbohydrate prices over time may be a cause of high incidence of native american obesity

demographic variables in demand analysis in this paper the authors discuss five procedures for incorporating demographic variables into theoretically plausible demand systems translating scaling and the gorman reverse gorman and implicit prais houthakker procedures these five procedures are used to incorporate a single demographic variable the number of children in a household into the generalized ces demand system using household budget data for the united kingdom for the period 1966 1972 excerpt

quantifying the structure of food demand in china an econometric approach this article examines food demand structure and its dynamics for 11 commodities in urban china the analysis is based on household level expenditure survey data for two cross sectional surveys of chinese households pertaining to food expenditure patterns during 1995 and 2003 pre committed components of commodity demands that are insensitive to economic variables are explored we use the generalized quadratic almost ideal demand system gqaids for its empirical superiority to the generalized almost ideal demand system gaids and estimate the associated parameters via full information maximum likelihood procedure fiml accounting for endogeneity of total expenditures on food for home consumption fah we also use quality adjusted commodity unit values to control for quality differences resulting from commodity aggregation and food choice furthermore we derive gqaids elasticity formulas and estimate income elasticities without restrictions the results partially support the hypothesis that an average chinese household has incorporated elements of western diet fine grains into traditional chinese food diet over time moreover the outcome of a simple test developed here points to possible preference changes for a majority of food staples under study

modeling the pattern of structural change in u s meat demand the hypothesis of structural change in u s meat demand is tested in a four meat almost ideal demand system with parameters following a gradual switching regression model the results support the notion that structural change partly explains the observed u s meat consumption patterns structural change is biased against beef neutral for pork in favor of chicken and fish and it does not affect estimated elasticities the estimated path of structural change implies a rapid transition to a new regime in the mid 1970s although a smooth path cannot be ruled out

foot and mouth disease and the mexican cattle industry the objective of this article is to analyze the domestic and international effects of a hypothetical foot and mouth disease fmd outbreak in the mexican cattle industry a discrete time dynamic optimization model of the mexican cattle sector is specified and linked to domestic and international markets economic consequences of fmd outbreaks are simulated over time and under different scenarios specific findings and general policy recommendations are provided the study reports a range of outbreaks from localized to large scale and suggests that changes in economic surplus due to fmd range from a positive net gain of 0 89 to 1 6 billion to a net loss of about 67 billion depending on the specific mitigation strategy and outbreak scenario

towards sustainable consumption economic modelling of mobility and heating for austria abstract the paper focuses on economic modelling and empirical analysis of sustainable structures in private consumption and strives to extend conventional economic consumption models the model analysis of sustainable consumption in the areas heating and transport for austria attempts to depart from traditional measurement of consumption in national accounts and economic consumption models the focus of the analysis is laid on consumer services derived from a combination of stocks e g building stock transport systems and flows mainly energy this approach intends to illustrate that a concentration on flows in consumption models lacks important aspects of sustainable consumption the economic analysis of sustainable consumption patterns aims to highlight the effects related to the substitution of flows by stocks in the consumption areas transport and heating e g improvements in thermal quality of buildings more energy efficient transport systems relevant too in this respect is the role that can be played by technological innovation improvements in energy efficiency of stocks the potential for specific incentives to promote new technologies two essential factors are crucial in the context of sustainable consumption the demand shifts concerning the consumer services desired and the composition of the stock flow mix necessary for the service provision

a new statistic and practical guidelines for nonparametric granger causality testing abstract in this paper we introduce a new nonparametric test for granger non causality which avoids the over rejection observed in the frequently used test proposed by hiemstra and jones 1994 testing for linear and nonlinear granger causality in the stock price volume relation journal of finance 49 1639 1664 after illustrating the problem by showing that rejection probabilities under the null hypothesis may tend to one as the sample size increases we study the reason behind this phenomenon analytically it turns out that the hiemstra jones test for the null of granger non causality which can be rephrased in terms of conditional independence of two vectors x and z given a third vector y is sensitive to variations in the conditional distributions of x and z that may be present under the null to overcome this problem we replace the global test statistic by an average of local conditional dependence measures by letting the bandwidth tend to zero at appropriate rates the variations in the conditional distributions are accounted for automatically based on asymptotic theory we formulate practical guidelines for choosing the bandwidth depending on the sample size we conclude with an application to historical returns and trading volumes of the standard and poor s index which indicates that the evidence for volume granger causing returns is weaker than suggested by the hiemstra jones test

a structural model of the analysis of retail market power the case of fluid milk we derive a structural model of firm behavior that is composed of the generalized quadratic almost ideal demand system to represent both consumers milk preferences and firm profit maximization conditions that allow for a range of competitive scenarios the importance of this specification is found in its fuller representation of consumer preferences as opposed to the linear approximate almost ideal demand system used in previous analyses we apply this structural framework to investigate retailer conduct in the sale of beverage milk in a u s market using product level data our lerner index estimates show that retailers are not perfectly competitive however this deviation is small copyright 2012 oxford university press

the effects of a fat tax on french households purchases a nutritional approach this article assesses the effects of a fat tax on the nutrients purchased by french households across different income groups this is done by making a preliminary estimation of price elasticities using a complete demand system on household scanner data and by calculating nutrient elasticities using estimated price elasticities we find that a fat tax has small and ambiguous effects on nutrients purchased by french households and a slight effect on body weight in the short run with a greater effect in the long run such a tax generates substantial tax revenue but is highly regressive

a note on purchased power adjustment clauses a recent series of papers has examined some of the economic effects of automatic fuel adjustment clauses on the behavior of the regulated firm see baron and debondt 1979 gallop and karlson 1978 cowing and stevenson 1979 atkinson and halvorsen 1980 isaac 1982 kaserman and tepel 1982 for the most part these papers have analyzed the implications of profit maximization under two alternative regulatory regimes one in which the firm s output price is determined by the terms of an adjustment clause formula and one in which it is not 1 today virtually all electric utilities are subject to some sort of fuel cost adjustment mechanism 2 since the specific formulas embodied in these mechanisms exhibit considerable variation across regulatory virtually all electric utilities are subject to some sort of fuel cost adjustment mechanism one way in which these formulas differ is in their treatment of purchased power this paper examines the effect that alternative treatments of purchased power have on the incentive of the regulated firm to minimize short run costs through its choice of purchased versus owngenerated power the theoretical model indicates that excluding purchased power from the formula creates an economic incentive to overutilize the firm s own generating equipment based on data for 113 privately owned u s electric utilities the empirical analysis confirms the theoretical prediction we gratefully acknowledge the financial support provided by the public policy research center and the public utilities research center at the university of florida and a grant from resources for the future without implicating them in what follows we also acknowledge the helpful comments on an earlier draft provided by john mayo and especially by two anonymous referees 1 the study by gollop and karlson 1978 is an exception they create an index that varies directly with the value of the adjustment clause formula to the firm 2 fuel adjustment clauses were in effect in 43 states in 1976 see isaac 1982 p 159

statistical models for zero expenditures in household budgets household budget surveys are an important source of data on consumer s expenditure not just for individual consumers but also for estimating national aggregates however it is a widespread finding that for certain commodities most notably tobacco and alcohol the estimate from the household survey falls short of the known consumption total calculated with some confidence from data on production imports exports and excise duties for example in the british family expenditure survey with which we shall largely be concerned total tobacco expenditure was underestimated in 1976 by 21 percent see kemsley redpath and holmes 1980 p 51 much of this understatement together with that on alcohol is thought to occur because of the design of the survey which excludes many persons amongst whom consumption of such items is thought to be atypically high e g prisoners hoteliers and their residents merchant seamen even so the possibility remains that some of the understatement is due to various types of misreporting by households included in the survey in this paper we consider a model in which the standard tobit specification tobin 1958 is supplemented by the operation of a simple binary censor the tobit model is essentially a linear regression model in which non positive observations of the dependent variable are replaced by zero we take this specification as our starting point but add a second censoring process that randomly replaces a fraction of the observations generated by the tobit model bv zeroes the combined model can serve as a representation of several types of

analysis of the carbon sequestration costs of afforestation and reforestation agroforestry practices and the use of cost curves to evaluate their potential for implementation of climate change mitigation abstract carbon sequestration in forest sinks is an important strategy to remove greenhouse gases and to mitigate climate change however its implementation has been limited under the clean development mechanism of the kyoto protocol which has not created the incentives for widespread implementation the objective of this paper is to analyze the sequestration costs of agroforestry afforestation and reforestation projects arps following a partial market equilibrium using average cost curves and economic break even analysis to identify the supply costs the modelling done in this work contrasts the voluntary and clean development mechanism transaction costs data is based on the voluntary project scolel te being implemented in mexico cost curves are developed for seven different sequestration options considering transaction and implementation costs information from agricultural production in chiapas mexico is used to integrate opportunity costs of two agroforestry practices suggesting that sequestration costs may follow a u shape with an initial reduction due to economies of scale and a subsequent increase caused by high opportunity costs the widespread implementation of agroforestry options not requiring complete land conversion e g living fences and coffee under shade might be cost effective strategies not generating high opportunity costs results also suggest that payments in the early years of the project and lower transaction costs favour the development of arps in the voluntary market especially in marginal rural areas with high discount rates

sequestration offsets versus direct emission reductions consideration of environmental co effects abstract atmospheric greenhouse gas accumulation and consequential temperature increase can be remedied by emission reductions or agricultural carbon sequestration both options have direct and external environmental effects this paper examines the magnitudes of existing estimates of corresponding external co effects and how they could affect optimal combination of emission reductions and agricultural carbon sequestration we discuss whether government intervention in the form of taxation subsidization is justified for internalizing the externalities considering their relative magnitudes implementation costs and potential benefits that could be derived from such intervention we conclude that the existing estimates of external benefits from sequestration and emission reduction do not provide enough support for allocating resources to alter the market mix of carbon sequestration and direct emission reduction strategies

barriers to massachusetts forest landowner participation in carbon markets u s forests including family owned forests are important carbon sinks and sources for carbon sequestration family forest owners constitute a significant portion of the overall forestland in the u s but little is known about their preferences for participating in carbon sequestration programs the goal of this research is to understand what motivates massachusetts family forest owners to participate in carbon markets the study estimates the probability these landowners would engage in carbon sequestration programs using data from a survey of 930 massachusetts family forest owners results from a random effects ordered probit indicate that under a carbon scenario similar to the current voluntary scheme very few of these landowners would be interested in participating supply analysis indicates these landowners are more influenced to participate by factors other than price regression analysis results suggest that survey respondents are concerned about early withdrawal penalties additionality requirements and contract length forest owner harvesting plans opinions about forest usage and beliefs about climate change all play a significant role in the decision to participate the study suggests that policy makers should consider the reasons behind these low participation rates because private forest owners could play a pivotal role in the carbon sequestration potential of forests

does food safety information impact u s meat demand a theoretical model of consumer response to publicized food safety information on meat demand is developed with an empirical application to u s meat consumption evidence is found for the existence of pre committed levels of consumption seasonal factors time trends and contemporaneous own and cross commodity food safety concerns the average demand response to food safety concerns is small especially in comparison to price effects and to previous estimates of health related issues this small average effect masks periods of significantly larger responses corresponding with prominent food safety events but these larger impacts are short lived with no apparent food safety lagged effects on food safety concerns in the united states have dramatically increased in the past decade with regard to incidences of contaminated meat products concerns have arisen because contaminated meat products can result in serious risk to the well being and health of consumers contamination comes from a myriad of sources including but not limited to outbreaks of listeria monocytogenes escherichia coli e coli and salmonella centers for disease control and prevention food safety problems are not isolated to the united states as other unsafe contaminates in meats have emerged across the world including highly publicized outbreaks of bovine spongiform encephalopathy bse in europe the potential impacts of publicized food safety events on consumer s demand for meat products in the united states include own effects on the demand for the contaminated meat involved as well as cross effects impacting the demand for other meats the objective of this article is to investigate whether publicized food safety concerns surrounding beef pork and poultry chicken and turkey have impacted meat consumption food safety indices are constructed separately for beef pork and poultry

testing restrictions on a model of japanese meat demand tests for quasi separability net substitutability and perfect substitutability are developed and implemented on an almost ideal demand system model of the japanese meat sector the data set satisfies both symmetry and homogeneity there is evidence of net complimentarity between chicken and dairy beef and chicken and pork the tests indicate that japanese wagyu beef is considered a separate commodity to both imported beef and dairy beef the results also indicate that fish can be treated as separable in the japanese meat demand system

food consumption dynamics a nonparametric approach using maximum entropy estimation we model dynamic consumer choice in a stochastic optimal control framework and show conditions under which observable market share data possess the markov property using 30 years of annual aggregate milk consumption data differentiated by fat content maximum entropy is used to estimate nonstationary transition probabilities showing how consumer tastes and preferences have changed over time the maximum entropy approach allows for the estimation of a 4 4 transition probability matrix for each year of the sample results suggest that skim milk was an absorbing state over most of the sample but that the trend toward skim milk has decelerated and possibly reversed itself since 1998 our approach provides a useful complement to existing parametric approaches to demand analysis when data are limited or the problem is ill posed

policy implications of considering pre commitments in u s aggregate energy demand system abstract linear approximations of the generalized almost ideal demand system and almost ideal demand system for u s energy are compared to contrast the explicit inclusion and exclusion of pre committed consumption levels results indicate that pre commitment levels the quantity of a good that is consumed in the short run with little regard for price helps to better explain energy demand in the u s compared to the system that does not explicitly consider pre commitments policy implications are if pre commitments are a legitimate assumption larger price changes are necessary to achieve a given policy objective than if there are no pre commitments

gaids a generalised version of the almost ideal demand system abstract aids is a popular model in empirical demand literature in this paper a generalised version of aids gaids is presented estimated and statistically tested evidence from italian household data suggests rejection of aids also when demographic effects are considered

consumer welfare and climate change in greenland abstract this manuscript aims to assess the potential impact of climate change on consumer welfare in greenland an arctic economy that has been historically affected by climate variation three proxies for climate change i annual mass change anomaly of the ice cap ii annual temperature anomalies and iii annual heating degree days anomalies are used to test the hypothesis that climate is a potential determinant of consumer expenditure the quadratic almost ideal demand system in its original specification is used to test this hypothesis the empirical analysis supported by granger causality tests shows that the annual mass change anomaly of the ice cap is a statistically and economically significant determinant of consumption of non durable goods in greenland a counterfactual analysis predicts that climate change could have decreased the wealth of consumers with an aggregate cumulative social welfare loss of 2010 us 21 63 million between 2003 and 2017

a sample selection approach to censored demand systems the multivariate sample selection model is extended to a nonlinear equation system with partial selection and applied to household meat consumption in china elasticity estimates differ from those obtained from conventional maximum likelihood and tobit estimates chinese meat products are gross complements while net substitution also exists in some cases the use of micro survey data has been popular in estimating consumer demand equations important features of microdata include censored dependent variables estimation procedures for censored consumer demand systems include the primal kuhn tucker approach of wales and woodland 1983 dual virtualprice approach of lee and pitt 1986 and the tobit system amemiya 1974 estimated by generalized maximum entropy golan perloff and shen 2001 and maximum simulated likelihood dong gould and kaiser 2004 yen lin and smallwood 2003 procedures less efficient alternatives include the quasi maximum likelihood estimator yen lin and smallwood 2003 the generalized method of moments estimator meyerhoefer ranney and sahn 2005 and a number of two step estimators heien and wessells 1990 perali and chavas 2000 shonkwiler and yen 1999 yen 2005 recently proposed a maximum likelihood ml procedure for the multivariate sample selection model mssm an extension of the bivariate sample selection model heckman 1979 which had motivated the procedures of heien and wessells 1990 and shonkwiler and yen 1999 the mssm was developed in the context of linear equations and in addition is not strictly applicable for a partially selective equation system viz

a unified approach to incorporating demographic or other effects into demand systems a general method of introducing demographic effects into any demand system using modifying functions is described which permits complicated interactions of demographic variables with prices and expeditures theorems give properties the modifying functions must have to ensure integrability of the resulting system demand equations of the new system are given explicitly as functions of the original demand equations and the modifying functions the procedure is interpreted as altering a households technology and is shown to encompass adult equivalent scales and related methods examples of modifying functions are derived and applications of the technique to uses other than demographic variation are considered excerpt

incorporating demand shifters in the almost ideal demand system abstract intercepts of share equations generally include demand shift variables in the almost ideal demand system and related models this results in estimates that depend on units of measurement solutions to this problem are identified and discussed

comparing heterogeneous consumption in u s and japanese meat and fish demand this article uses national quarterly data to conduct an empirical analysis of pre committed meat and fish demand by u s and japanese households using the generalized almost ideal demand system gaids pre committed demand represents the component of demand that is insensitive to both income and price adjustments u s consumers are found to hold significant positive pre committed demand for beef and pork while japanese consumers appear to possess significant positive pre committed demand for beef and fish this provides evidence to partially explain observed differences in japanese and u s consumer reactions to nonprice and nonincome effects in beef pork poultry and fish in addition based on inand out of sample performance the more general gaids is preferred to the almost ideal demand system aids for both the u s and japanese demand systems results lend to improved demand modeling efforts and more complete understanding of true market forces at hand in meat and fish markets for these culturally diverse consumer groups

what do we learn about consumer demand patterns from micro data the aim of this paper is to assess the importance of using micro level data in the econometric analysis of consumer demand to do this we utilize a time series of repeated cross sections covering some 4 000 households in each of 15 years employing a number of different aggregation procedures we conclude that aggregate data alone are unlikely to produce reliable estimates of structural price and income coefficients however once certain aggregation factors as well as trend and seasonal components are included an aggregate model is not necessarily outperformed across all demand equations in terms of forecasting ability jel d12 c52 c31 the purpose of this paper is to develop a complete consumer demand system based on a time series of individual household data and to use it to measure the biases introduced into the study of consumer de mand behavior when aggregate data are used in place of the appropriate microeco nomic data we assess the suitability of ag gregate data through the impact on income and price elasticities and by evaluating the ability of both micro and aggregate based models to forecast aggregate consumer de mand the biases introduced by the use of aggregate data depend upon the way that household characteristics interact with in come and price effects and on departures of demand systems from linearity we explore the structure of microeconomic demand sys tems and the role of household characteris tics in the behavior of consumer demand both for the light this may shed on the pattern of future demands and for the im plications this behavior has for issues of aggregation consumer demand patterns typically found in micro data sets vary considerably across households with different household characteristics and with different levels of income we model this variability by making intercept and slope parameters in the budget share equations of our demand sys tem depend on household characteristics and by allowing for nonlinear total log expenditure terms in fact in theory consistent demand systems it is total ex penditure rather than disposable income that is allocated across goods we find that this general framework leads to a well specified data coherent demand system which is a quadratic extension of the popu lar almost ideal model of angus s deaton and john muellbauer 1980 the micro level estimates are shown to be sensitive to the treatment of endogeneity of total expen diture and to the specification of interaction terms with household characteristics in ad dition this specification is also shown to possess many attractive features for the evaluation of aggregate models

quadratic engel curves and consumer demand this paper presents a model of consumer demand that is consistent with the observed expenditure patterns of individual consumers in a long time series of expenditure surveys and is also able to provide a detailed welfare analysis of shifts in relative prices a nonparametric analysis of consumer expenditure patterns suggests that engel curves require quadratic terms in the logarithm of expenditure while popular models of demand such as the translog or the almost ideal demand systems do allow flexible price responses within a theoretically coherent structure they have expenditure share engel curves that are linear in the logarithm of total expenditure we derive the complete class of integrable quadratic logarithmic expenditure share systems a specification from this class is estimated on a large pooled data set of u k households models that fail to account for engel curvature are found ro generate important distortions in the patterns of welfare losses associated with a tax increase

unintended impacts of public investments on private decisions the depletion of forested wetlands by affecting relative economic returns infrastructure investments can induce major changes in private land use the authors find that 30 percent of forested wetland depletion in the mississippi valley has resulted from private decisions induced by federal flood control projects despite explicit federal policy to preserve wetlands the model aggregates individual land use decisions using a parametric distribution of unobserved land quality dynamic simulations are used to quantify the impacts on wetlands of federal projects and other factors copyright 1990 by american economic association