generalized travel cost model and water quality benefits a reconsideration with federal agencies required to conduct benefit cost analyses for each new major regulation analyses of water quality changes are likely to be an increasingly important part of the policymaking process a revised version of the travel cost demand model and illustrations show the importance of these revisions for the model s estimates although the magnitude of the difference in benefit estimates between the original and new versions of the model varies with the specific recreation site selected the findings indicate that the original model generally implied estimated benefits from three to over 30 times as large as the revised model this implies that judgment can play an important role in the definition and use of economic models as well as the need for better information on households recreation decisions and more complete description of recreation site characteristics 15 references 4 tables

the theory of mixed demand functions abstract the properties of samuelson s mixed demand functions which express demand as a function of a mixed set of prices and quantities are derived by analyzing compensated or substitution effects and uncompensated effects the relationships between mixed demand functions and conditional or rationed demands are examined this provides insights on the behavioral implications of consumer theory for alternative demand specifications

green price indices abstract this paper suggests two theoretically consistent and empirically tractable ways that a cost of living index can be expanded to include the environment and other public goods in addition it presents an empirical illustration of such an index for los angeles california incorporating air quality and other spatially varying public goods using a hedonic model the results indicate that the required information can be recovered and that including public goods can make a substantial difference in the index

public goods as characteristics of non market commodities in benefit cost analysis it is useful to model public goods as the quality of privately consumed nonmarketed goods this strategy is often pursued in valuing environmental amenities the theoretical foundations of this model have not been fully developed in this paper comparative statics results are derived for quality changes of nonmarket goods the results reveal some common misconceptions about welfare measurement of quality changes conditions are presented for a quality induced change in the marshallian consumer surplus of the nonmarket good to approximate the true compensated welfare measure the conditions are equally necessary for obtaining exact welfare measures copyright 1993 by royal economic society

generalized models of japanese demand for fish given a relative lack of knowledge about japanese consumer preferences for fish japanese fish demand is modeled using both marshallian ordinary and inverse demand systems each of which nests a number of competing specifications results indicate that the inverse demand systems dominate the ordinary demand systems in forecasting performance and in nonnested tests the inverse system suggests that japanese fish prices are less responsive to changes in consumption than found in previous studies

a diagrammatic exposition of weak complementarity and the willig condition this article provides a graphical explanation for one of the most important restrictions to utility functions used in revealed preference approaches for measuring the demand for public goods and product quality weak complementarity it also describes how the willig condition is an important element along with weak complementarity in measuring hicksian consumer surplus for changes in public goods or quality using marshallian demand curves

valuing environmental resources through demand for related commodities we examine the revealed preference theory underlying the welfare analysis of public goods e g environmental quality by observing the consumption of related commodities inspired by larson 1991 and ebert 1998 and extended from eom and larson 2006 an empirical strategy is formulated consistent with the theory of uniquely deriving use and nonuse values for a change in the public good we show that the weak complementarity assumption and the willig condition the common preference assumptions used to support the revealed preference methods for non market valuation may be tested as parameter restrictions a study of water quality valuation is presented to illustrate the proposed empirical strategy results show that the weak complementarity assumption and the willig condition generally do not hold in the case study and the consumer surplus derived from the indirect valuation method deviates largely from the exact welfare measures

hedonic onsight cost model of recreation demand for many recreational activities onsite pecuniary costs can be a significant portion of the cost of a recreational trip onsite expenditures however often depend upon endogenous quality choices made by the household we formulate a recreation demand model that formally accounts for household selection of quality of onsite time household behavior is constrained by income prices and the onsite hedonic price schedule assuming complete optimization a reduced form marshallian demand curve for recreation trips still results and a specialized version of roy s identity provides a basis for welfare analysis instrumenting for endogenous quality choices does not improve demand estimation

combining revealed and stated preference data to estimate the nonmarket value of ecological services an assessment of the state of the science this paper reviews the marketing transportation and environmental economics literature on the joint estimation of revealed preference rp and stated preference sp data the rp and sp approaches are first described with a focus on the strengths and weaknesses of each recognizing these strengths and weaknesses the potential gains from combining data are described a classification system for combined data that emphasizes the type of data combination and the econometric models used is proposed a methodological review of the literature is pursued based on this classification system examples from the environmental economics literature are highlighted a discussion of the advantages and disadvantages of each type of jointly estimated model is then presented suggestions for future research in particular opportunities for application of these models to environmental quality valuation are presented

demand elasticities for fresh fruit at the retail level the obesity epidemic in the us and elsewhere has re doubled efforts to understand determinants of the quality of consumers diets part of the discussion has centered on the potential of fat taxes and or the subsidization of the purchase of fresh fruits and vegetables to coax consumers to better diets whether this discussion has merit or not fundamental to the debate are the demand elasticities of the commodities involved this study employs weekly data from several retail stores on fruit prices and sales to estimate elasticities of individual fruits estimates show consumers are more responsive to price than has been found previously

model choice in consumer analysis taiwan 1970 89 expenditure data were used to study how income and prices influenced consumer demand in taiwan during the last decade alternative differential demand models combining the features of the rotterdam model and the almost ideal demand system aids were tested aids type demand responses describe taiwanese consumer behavior better than do the other specifications

food safety issues and the bse scare some lessons from the french case abstract the bovine spongiform encephalopathy bse scare began after the uk minister of health admitted a possible link between the bse prion and the creutzfeldt jakob disease contaminating humans the paper outlines a survey conducted in the area of rennes to analyse consumer behaviour after the bse crisis a contingent scenario was proposed to determine the willingness to pay wtp for beef which should not transmit cjd using a mix of the referendum method and the bidding process the variables considered as main determinants of the wtp have been selected the study concludes with the interests and limits of the method used and the implications of the bse scare on food policy in fact the mad cow disease raises the problem of loss of public confidence and the means to restore it consumers are waiting for a greater transparency or traceability and according to the survey would accept to pay for it

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

environmental amenities as a source of market power site specific environmental amenities can provide a source of product differentiating market power using estimates from hedonic price equations and residual demand models our analysis recovers firm specific estimates of price markups as measures of market power and uses these markups to estimate the implied marginal value for access to coastal beaches the application involves rental price and occupancy data for several thousand beach properties along a portion of the north carolina coastline during the 1987 to 1992 rental seasons

food consumption and economic development in turkey and european union countries this study investigates the relationship between food consumption and economic development in turkey and european union countries differences in food diets are analysed by using data on per capita consumption in caloric terms based on the period from 1970 to 2000 the cluster analysis is employed to derive country grouping on the basis of similarities in dietary structure in the 1970 and 2000 existence of a trend towards a common european diet is explored with beta convergence the empirical results show that per capita food consumption is becoming less responsive to changes in income and appears to be reaching a ceiling in the majority of eu countries and turkey however the share of animal products in food consumption diet is low and income expenditure elasticity of animal products is higher with 0 84 values in turkey than that in european countries in 2000 there are great differences in dietary structure between turkey and the european union differences also exist between european union countries

further results on willingness to pay for nonmarket goods abstract some implications of substitution relationships between private and public goods for measuring the value of changes in nonmarket goods such as environmental quality are explored if a market good is hicks neutral to quality for some price vector the total value of discrete changes in quality consisting of both use and nonuse value can be measured from empirical demand coefficients a plausible motivation for neutrality is developed in the contexts of specifying incomplete demand systems for weak complements to quality and measuring nonuse value when the consumption of weak complements is held at zero previous results on bounding marginal willingness to pay for nonmarket goods are also strengthened

differential demand systems a further look at barten s synthesis barten s synthetic model is attractive to applied researchers since it is useful for testing the adequacy of the competing functional forms of differential demand systems including the popular rotterdam and almost ideal demand systems this article shows that the synthetic model is not a mere artificial composite of the known differential demand systems as it has been considered but rather viewed as a model in its own right it is demonstrated that at the individual consumer level barten s model has the same marginal budget shares as generated by specific forms of engel curves formulated by the box cox transformation

policy and projection model for the meat sector in the people s republic of china the ability of china to continue satisfying its food requirements is a question with important ramifications for u s agricultural exports this report documents the food and agricultural policy research institute fapri model of china s meat and egg sectors the report begins with a brief description of china s trade patterns followed by a discussion of the model structure and the important parameter assumptions it summarizes the procedure used to project feed grain demands and concludes with suggestions for future model development

willingness to pay for quality improvements comparative statics and interpretation of contingent valuation results this paper extends variation function theory by examining the effects of changes in prices quality and income on willingness to pay for quality change comparative static effects are found for both on site users and nonusers of the resource these results are used to interpret contingent valuation empirical models for example the substitution and complementary relationships between trips to natural resource sites can be identified this paper also suggests tests for comparison of contingent valuation with recreation demand models and other tests of validity

differences between continuous and discrete contingent value estimates in a split sample contingent valuation study of willingness to pay wtp for food safety improvements the dichotomous choice dc elicitation method consistently generated much larger estimates of wtp than did a continuous method little or none of these differences was due to bias introduced by the statistical techniques used with the dc data most or all of the difference was due to differences in respondent behavior in addition the continuous wtp responses showed a significant scope effect while the dc responses did not the observed difference in behavior may be attributable in part to yea saying by dc respondents

household food demand in rural china this article explores rural household food consumption behaviour in china using a large household data set from jilin province data are classified into four main food groups grain vegetable products animal products and other foods a household food demand system incorporating four household characteristics is estimated using an la aids model assuming a three stage budgeting procedure expenditure elasticities for a range of food groups are estimated with a particular focus on animal products the inclusion of household characteristics did not have a big impact on the elasticity values in any of the three stages of the budgeting process the total expenditure elasticity for grain stage ii was 0 64 suggesting substantial future growth in household demand for fine grains such as rice and wheat as per capita incomes continue to grow in rural areas the highest conditional and total expenditure elasticity values were for the animal products stage ii group 1 22 and 0 76 respectively within this

is meta analysis a noah s ark for non market valuation this paper describes meta analytical methods as they have been applied to non market valuation research these studies have been used to review and synthesize literature and more recently in benefit transfer this second use imposes a higher standard on the consistency in economic concepts being summarized and in the resources included in a meta analysis to meet this need the paper proposes and illustrates a structural framework using a generalized method of moments estimator to estimate the parameters of a preference function with the benefits estimates usually encountered in meta analytic summaries

can weak substitution be rehabilitated this paper develops a graphical analysis and an analytical model that demonstrate how weak substitution can be used for non market valuation weak complementarity and weak substitution represent preference restrictions that allow us to develop equivalent price changes to describe quantity or quality changes in non market goods the price changes are hicksian equivalents in that they yield the same utility changes as would the quantity or quality changes after discussion of several potential applications of weak substitution the paper develops the parallel between the restriction and recent strategies from modeling differentiated goods

improving environmental valuation estimates through consistent use of revealed and stated preference information abstract environmental valuation data from stated and revealed preference methods are integrated into a unified model of preferences for environmental quality improvement that identifies the use and nonuse components of the total value estimate this articulates clearly what parts of the total value estimate come from each type of data and permits tests of whether estimated preferences satisfy weak complementarity between the environmental good of interest and related private goods the statistical advantages of using more information for the valuation problem are exploited while retaining flexibility to identify value estimates from any individual method of analysis

an empirical investigation of the consistency of nested logit models with utility maximization global conditions under which nested logit models are consistent with utility maximization are provided by daly and zachary and by mcfadden recently borsch supan and herriges and kling have provided conditions under which a nested logit model is locally consistent however previous work has not discussed implementation of these conditions here three alternative approaches to checking and formally testing for the consistency conditions using classical statistics are investigated in addition a bayesian approach to interpreting and imposing the local consistency conditions is provided the application is based on anglers choices regarding sportfishing alternatives in southern california

another theorem on using market demands to determine willingness to pay for non traded goods abstract this paper contains a proof of the following theorem let e1 and e1 denote an agent s expenditures on two groups of goods which are substitutes and complements to a non traded good suppose that both the agent s income and the quantity of the non traded good provided him have a positive effect on these two amounts then these effects can be used to place upper and lower bounds on the agent s marginal willingness to pay for the non traded good

nepotism discrimination and the persistence of utility maximizing owner operated firms reply much debate in the discrimination literature surrounds whether employers with biased preferences can persist in the market 7 10 this issue is a natural extension of the broader literature on owner operated firms which focuses on the consistency of utility and profit maximization 12 13 14 18 26 27 theories of owner operated firms which have a long history in economics model the entrepreneur as both a producer and consumer of goods that determines the level of production and consumption jointly through utility maximization 2 9 16 22 31 this approach is applied in this paper to examine employer discrimination and nepotism our analysis provides necessary conditions for utility maximizing firms to persist in the market and shows how biased preferences can yield seemingly uneconomic input and output choices that are in fact rationally inefficient empirical results using data on family farms support the prediction that utility maximizing entrepreneurs trade profit for nonmarket goods and do not hire inputs to maximize profits competitive neoclassical theories of the labor market do not provide a clear theoretical resolution to the issue of persistence of employer nepotism and discrimination the employer discrimination model proposed by becker 4 5 and extended by arrow 1 postulates that entrepreneurs maximize utility that increases with profit but decreases with a nonmarket attribute of some workers e g race ethnicity or gender these models predict that white male workers may initially have better market opportunities than comparable minority or female workers however entrepreneurs who hire based on nonproductive attributes are also predicted to earn less than a normal rate of return and because they derive disutility from an aspect of owning and operating a firm can improve their welfare by leaving the industry and converting firm assets to those that do not require employment decisions e g stocks and bonds this result has the important policy implication that market intervention may not be necessary to improve the relative pay and employment of disadvantaged groups when employers are the source of the discrimination alternatively goldberg 15 uses the arrow 1 framework but postulates that employers

maskin monotonicity and infinite individuals abstract this paper examines the logical relationship among maskin monotonicity independent person by person monotonicity independent weak monotonicity strategy proofness and coalitional strategy proofness in a society with infinite individuals

specification tests for mixed demand systems with an emphasis on combining contingent valuation and revealed data abstract in a world characterized by r unrationed goods i e market goods and n r rationed goods such as most environmental goods necessary and sufficient conditions for the existence of an underlying rational preference structure are derived based on a system of mixed demand functions with complete information with incomplete information the case of a partial demand system is addressed and a test for separability is proposed the implications for testing rationality in a world characterized by combined rp and sp individual data are examined for data consistency testable conditions are derived

continuum economies with finite coalitions core equilibria and widespread externalities abstract we develop a new model of a continuum economy with coalitions consisting of only finite numbers of agents the core called the f core is the set of allocations that are stable against improvement by finite coalitions and feasible by trade within finite coalitions even with widespread externalities preferences depend on own consumptions and also on the entire allocation up to the null set we obtain the result that the f core coincides with the walrasian allocations without widespread externalities the f core the aumann core and the walrasian allocations all coincide however with widespread externalities there is no obvious natural definition of the aumann core

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

inverse demand systems and choice of functional form abstract barten empirical economics 18 1993 129 recently advocated estimation of a synthetic demand system that mechanically nests four other popular differential demand models this paper follows a similar strategy but in the context of four inverse share equation demand systems the inverse translog demand system itlds the inverse almost ideal demand system iaids the inverse lewbel demand system ilds and the inverse non separable linear expenditure system inles each of these specifications is artificially nested in a hybrid inverse demand system hids an empirical application to three categories of quarterly u s meat demand data over the period 1961 1996 indicates the hids is a preferred specification

commodity prices as payment vehicles in valuation experiments many contingent valuation experiments use commodity prices as the payment vehicle in this note it is shown in general that this approach does not allow the investigator to extract the respondent s willingness to pay however it is also shown how the valuation question can be formulated so as to yield a commodity price payment vehicle which is equivalent to a lump sum payment

quality adjusted price indexes and the willig condition abstract this paper provides a graphical explanation of willig s condition for developing consistent price indexes for quality change the framework also describes how the single crossing condition generalizes the willig condition

weak complementarity path independence and the intuition of the willig condition abstract weak complementarity is usually invoked for valuing public goods using information on private goods however using uncompensated demands requires a second condition the willig condition this paper present an intuitive explanation of the willig condition and shows that the alternative versions are equivalent to a path independence condition for line integrals this condition is fulfilled for compensated demands but not uncompensated demands except in restrictive special cases it is shown that this is a type of quasi homotheticity and requires that the income flexibility of quality must equal the income elasticity of the weak complement the importance and restrictiveness of the willig condition are shown using three alternative functional forms

general equilibrium benefits for environmental improvements projected ozone reductions under epa s prospective analysis for the los angeles air basin abstract this research demonstrates how locational equilibrium models can be used for benefit measurement with the detail required to match epa s benefit analysis for the first prospective analysis using the projected changes in ozone concentrations for 2000 and 2010 together with the sieg et al int econ rev forthcoming estimates for household preferences for housing education and air quality this paper measures general equilibrium willingness to pay for the policy scenarios developed for the prospective study as they relate to households in the los angeles area benefits are evaluated taking account at the household level of initial air quality conditions relocation based on changes in ozone and price changes the framework generalizes the partial equilibrium general equilibrium comparisons available with conventional computable general equilibrium and property capitalization models estimated general equilibrium gains from the policy range from 33 to 2400 annually at a household level in 1990 dollars

willingness to pay and willingness to accept how much can they differ comment i agree with the point made by edoh y amiran and daniel a hagen 2003 that there can be a substantial or even infinite divergence between the wta and wtp for a public good even where there is a nonzero elasticity of substitution between market goods and the public good provided that the indifference curves are asymptotically bounded with respect to market goods in the manner they describe this is an important point they are also correct to point out that the elasticity of substitution is a local concept whereas their asymptotic boundedness condition applies also for discrete changes my 1991 paper used a local analysis because it was following the structure of the analysis in robert d willig 1976 and alan randall and john r stoll 1980 i wanted to show that while randall and stoll appeared to extend willig s local result on wta versus wtp from price changes to changes in the quantity of a public good the relevant elasticity was in fact different and involved the substitution elasticity as well as the income elasticity i view these points by amiran and hagen as not two separate results but essentially the same result their asymptotic boundedness condition generalizes my zero elasticity of substitution condition to discrete changes the asymptotic boundedness condition can be expressed as follows assuming a bivariate utility function u x q and given a reference point x q associated with a reference utility level u u x q there exists some q q such that for all q q there exists no x such that u x q u in other words no amount of x can substitute for the reduction in public good from q to q q in the case of a zero elasticity of substitution q q but as amiran and hagen show in their theorem 1 this is unnecessarily restrictive when dealing with a discrete reduction in q furthermore their theorem 2 can be viewed as a special case of their theorem 1 in which q 0 which makes q an essential commodity it is well known in consumer theory that the wta to avoid the loss of an essential market good is infinite their theorem 2 extends this result to the case of an essential nonmarket good but as their theorem 1 shows essentialness is not necessary for an infinite wta the boundedness condition is the key and this implies a fundamental lack of substitutability between money market goods and the public good

inverse demand systems and welfare measurement in quantity space most studies of welfare or cost benefit analyses are concerned with the welfare effects of price changes 11 19 27 33 50 there are however many situations in which policy options are directly related to quantity changes the welfare effects of price changes are analyzed with the traditional demand system in which commodity quantities are determined as functions of their prices the welfare effects of quantity changes on the other hand are associated with the inverse demand system in which commodity prices are dependent on their quantities in conventional welfare analysis of price change prices are taken to be exogenous or predetermined while quantities are endogenous in contrast in welfare analysis of quantity changes quantities are exogenous while prices are endogenous price based or dual welfare measures are relevant when there are well functioning competitive markets and quantities are fully adjusted to changes in prices on the other hand quantity based or primal welfare measures are useful in situations where there are constraints on commodity quantities or when transaction costs impede consumers from fully adjusting to changes in prices the choice between priceand quantity based welfare measures is empirical and proper measurement of welfare effects requires the knowledge as to which variable price or quantity is the exogenous one for individual consumers it may be reasonable to assume that the supply of commodities is perfectly elastic and therefore prices can be taken as exogenous but this assumption may not be tenable for consumers in the aggregate or if highly aggregated economy wide data are used to estimate demand relations at the aggregate level quantities are more properly viewed as exogenous than are prices although individual consumers make their consumption decisions based on given prices the quantities of commodities are predetermined by production at the market level and prices must adjust so that the available quantities are consumed 28 1 2

experimental valuation of food safety abstract nearly 60 of the sewage sludge in france is recycled in agriculture sludge serves as a fertilizer but contains micropollutants this could modify the consumer s perceived safety concerning the vegetables grown with sludge in the same way as nutritional value safety is an attribute of food food safety is a public good and in this respect has no explicit price a consumer is willing to pay for it if he perceives a risk to his health the purpose of this study is to give a value to food safety relative to the practice of sewage sludge disposal on agricultural soils experimental economics is a support to elicit the willingness to pay for safety risks linked to one heavy metal cadmium have been chosen they are supposed to be very low and difficult to assess because of the uncertainties involved in the food chain process

elasticities in aids models in the literature a variety of approaches have been used to calculate demand elasticities in almost ideal demand system aids models of demand it is common to estimate the linear approximate almost ideal demand system la aids instead of the aids when the la aids is estimated all of the previously reported approaches to compute elasticities are theoretically incorrect this paper presents correct formulas for la aids elasticities and illustrates the potential errors from using incorrect computing the almost ideal demand system aids of deaton and muellbauer 1980a b has become popular in recent years anderson and blundell blanciforti and green 1983a b blanciforti green and king chalfant eales and unnevehr fujii khaled and mak fulponi heien and willett murray parsons ray a variety of approaches to computing elasticities has been used and some of the approaches may lead to significant errors this paper clarifies the differences between alternative approaches to estimating demand elasticities in aids models

characteristics and hedonic pricing of differentiated beef demands we estimate a cbs system model of u s derived demand for meat we use this model 1 to examine relationships between three quality categories of beef and three other meats and 2 to simulate how taste shifts have affected demands for meats over time we extend previous studies by disaggregating wholesale beef production into three quality categories 1 usda choice grade or higher 2 usda select or lower and 3 cow and bull beef innovative features of our empirical model include a breakout of table cuts into choice and select and the use of a hedonic characterization of the two breakouts to value choice ness and beef ness our model demonstrates important shifts in separate demands for choice and select beef we show that separately the demand for choice grade beef declined in the 1980s and 1990s and the demand for select beef increased a departure from the relatively stable demand characterizations of more aggregated measures of combined choice and select beef jel classification q11 q13

domains of social choice functions on which coalition strategy proofness and maskin monotonicity are equivalent abstract it is known that on some social choice and economic domains a social choice function is coalition strategy proof if and only if it is maskin monotonic e g muller e and satterthwaite m 1977 the equivalence of strong positive association and strategy proofness j econ theory 14 pp412 18 this paper studies the foundation of those results i provide a set of conditions which is sufficient for the equivalence between coalition strategy proofness and maskin monotonicity this generalizes some known results

the demand for food and beverages in norway abstract the demand for food and beverages is estimated within a three stage demand model the separability structure of the model is checked by nonparametric tests some generalized axiom of revealed preference garp violations are detected in one of the subsystems however they are removed by small adjustments in the quantities of fish and the violations are interpreted as results of measurement errors the almost ideal demand system is used in the static and a dynamic version the results of various specification and misspecification tests suggest that the static version performs poorly as compared with the dynamic version norwegian demand elasticities for disaggregate food commodities have rarely been estimated within a system framework so the results are of intrinsic interest the elasticities estimated by using the dynamic model are of the expected signs and reasonable magnitudes the values are stable over time for most commodities elasticities estimated within a subsystem are conditional on the goods included in that system and they may differ from the more policy relevant unconditional elasticities estimated within a system including all goods adjustment formulas are used to approximate the unconditional elasticities from the estimated conditional elasticities there are considerable differences between the numerical values of the conditional and unconditional elasticities for several of the foods the unconditional own price elasticities are in the interval 0 20 to 0 89 the own price elasticities for hot drinks and for milk are most inelastic the unconditional expenditure elasticities for food away from home fish soft drinks and alcoholic beverages are above one while the expenditure elasticity for hot drinks is about zero

the silence of the lambdas a test of the almost ideal and rotterdam models during the past decade the linear approximate la almost ideal demand system and the rotterdam model have been adopted by agricultural economists as the demand systems of choice in most applications the apparent explanation is that the two models are both second order locally flexible and compatible with demand theory they have identical data requirements and are equally parsimonious with respect to parameters and both are linear in the parameters while the two models are thus equally attractive in most respects and indeed appear very similar in structure they lead to different results in some applications this article develops a test of each against the other in an illustrative application to u s meat demand the almost ideal model is rejected while the rotterdam model is not

nash equilibrium and welfare optimality if is a set of social alternatives a social choice rule scr assigns a subset of a to each potential profile of individuals preferences over a where the subset is interpreted as the set of welfare optima a game form or mechanism implements the social choice rule if for any potential profile of preferences 1 any welfare optimum can arise as a nash equilibrium of the game form implying in particular that a nash equilibrium exists and 2 all nash equilibria are welfare optimal the main result of this paper establishes that any scr that satisfies two properties monotonicity and no veto power can be implemented by a game form if there are three or more individuals the proof is constructive

livestock in china commodity specific total factor productivity decomposition using new panel data studies of total factor productivity tfp in livestock production are rare but when available provide useful information especially in the context of developing countries such as china where livestock is becoming more important in the domestic agricultural economy we estimate tfp for four major livestock products in china employing the stochastic frontier approach and decompose productivity growth into its technical efficiency te and technical progress components efforts are made to adjust and augment the available livestock statistics the results show that growth in tfp and its components varied between the 1980s and the 1990s as well as over production structures while there is evidence of considerable technical innovation in china s livestock sector te improvement has been relatively slow

efficient methods of measuring welfare change and compensated income in terms of ordinary demand functions a utility maximizing consumer with a completely known system of ordinary demand functions q h p c is considered let p qo and p q be two arbitrary equilibrium situations the problem is to evaluate in which of the situations the utility is higher without knowing the utility function revealed preference theory tells that the ordinary demand functions which are in principle observable contain enough information to solve the problem remaining difficulties are therefore mainly computational we present how the compensated income c i c p qo and the compensated demand h p cl1 are calculated with arbitrary accuracy using only the ordinary demand system our two efficient algorithms also have interesting interpretations in terms of index numbers and consumer surplus measures

optimal temporal policies in fluid milk advertising this study develops an approach to obtain optimal temporal advertising strategies when consumers response to advertising is asymmetric using this approach optimal strategies for generic fluid milk advertising in new york city are determined results indicate that pulsed advertising policies are significantly more effective in increasing demand than a uniform advertising policy sensitivity analyses show that the optimal advertising policies are insensitive to reasonable variations in interest rates and the inclusion of milk demand seasonality in the model also less asymmetric responses to advertising are found to result in shorter optimal pulsing cycles and reduced intensity of advertising pulses copyright 2000 oxford university press

time varying parameters in the almost ideal demand system and the rotterdam model will the best specification please stand up this article assesses the ability of the rotterdam model rm and of three versions of the almost ideal demand system aids to recover the time varying elasticities of a true demand system and to satisfy theoretical regularity using monte carlo simulations we find that the rm performs better than the linear approximate aids at recovering the signs of all the time varying elasticities more importantly the rm has the ability to track the paths of time varying income elasticities even when the true values are very high the linear approximate aids not only performs poorly at recovering the time varying elasticities but also badly approximates the nonlinear aids

renewable resource use and nonseparable amenity benefits we incorporate amenity benefits into an overlapping generations model with a renewable resource as a factor of production source of amenity benefits and store of value unlike the conventional renewable resource problems studied under the assumption of additive consumption and amenity benefits we let amenity benefits affect the utility of consumers in a nonseparable fashion we examine the role that weights given to consumption and amenities have for harvesting and the resource stock we characterize dynamics and stability of steady state equilibria with a logistic resource growth function we demonstrate in parametric and numerical models that the weights given to consumption and amenities in the utility function matter substantially for the steady state equilibrium stock and its stability and dynamics both conventional saddle point equilibria and indeterminacy with infinite number of equilibria and saddle node bifurcation is possible depending on the weights given to consumption and amenities in addition we show that for each inefficient equilibrium stock there is a unique subsidy rate that can move the economy from an inefficient equilibrium to an efficient one the presence of indeterminacy provides a challenge to resource policies because the system becomes unpredictable therefore expectations and market psychology may play an important role in resource utilization and provision of amenities

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

welfare measures when agents can learn a unifying theory we extend graham s 1981 welfare analysis under uncertainty to a dynamic environment where the agent can delay and obtain information the dynamic willingness to pay locus unifies the concepts of option price dynamic wtp commitment costs and quasi option value option price dynamic wtp corresponds to the ex ante wtp when the agent ignores recognises the learning opportunity the commitment cost or the difference between option price and dynamic wtp equals the annualised and monetised quasi option value state contingent contracts have added value by allowing trading among agents with heterogeneous access to future information and delay opportunities

a varying coefficient approach to global flexibility in demand analysis a semiparametric approximation to reduce dimensionality issues this article derives a globally flexible demand system that can be estimated non parametrically with a specially devised temporal kernel statistical and economic results from a meat demand application underscores the usefulness of a temporal kernel in globally approximating an integrable demand system

demand for beef and chicken products separability and structural change several studies have indicated that the recent shift from beef to poultry in consumption is not entirely caused by changes in rela tive prices or income braschler chavas dahlgran hudson and vertin moschini and meilke frank thurman most studies of structural change have focused on red meat consumption only thurman has looked closely at the poultry market and no one has considered poultry products yet the mix of chicken products marketed changed dramat ically during the last twenty years and should have influenced aggregate meat demand the share of broiler slaughter marketed as whole birds declined from 74 in 1965 to 28 in 1985 while cut up parts and processed chick en products increased from 26 to 72 whole birds are inferior goods and cut up parts and processed chicken are normal goods haidacher et al the shift in chicken prod uct mix away from whole birds should have increased the preference for total chicken in this article two related questions are ad dressed first do consumers allocate expendi tures among meats by animal origin or by product type second does disaggregation of meat into products in a meat demand model give insight into the causes of structural

a nonparametric revealed preference approach to measuring the value of environmental quality we develop an approach to valuing non market goods using nonparametric revealed preference analysis we show how nonparametric methods can also be used to bound the welfare effects of changes in the provision of a non market good our main context is one in which the non market good affects the marginal utility of consuming a related market good this can also be framed as a shift in the taste for or quality of the market good a systematic approach for incorporating quality taste variation into a revealed preference framework for heterogeneous consumers is developed this enables the recovery of the minimal variation in quality required to rationalise observed choices of related market goods the variation in quality appears as a adjustment to the price for related market goods which then allows a revealed preference approach to bounding compensation measures of welfare effects to be applied

the demand for cigarettes in japan a two stage budgeting procedure was used to estimate demand elasticities for cigarettes in japan cigarettes were disaggregated into japanese u s and rest of world testing for habit effects was performed at both stages results indicated that habit effects occur for total expenditures on cigarettes but not between types

welfare measurement in the household production framework the household production approach to consumer behavior developed from the work of gary becker william gorman and kelvin lancaster has considerable descriptive appeal in modelling the decisions of households the approach derives from the observation that households frequently purchase market goods that do not yield utility directly but are combined to produce commodity service flows which the household values thus observed behavior is determined by household production technology as well as by tastes the advantage of this distinction is that we can pose reasonable hypotheses about characteristics of technology though we rarely possess useful a priori information regarding tastes the putative advantages of the household production approach are questioned on empirical and conceptual grounds by robert pollak and michael wachter 1975 they show that jointness in production or nonconstant returns to scale cause implicit commodity prices to depend on both tastes and technology raising serious econometric difficulties in the estimation of commodity demand functions in addition since commodity prices become functions of the commodity bundle consumed the analogy to traditional demand theory breaks down joint production occurs when a good enters several production processes simultaneously or equivalently when a good in one production process also enters directly into the individual s utility function the most common example is time which provides the context for all production processes and is often associated with the production of several commodities simultaneously since joint production in the household is likely to be pervasive the critique by pollak and wachter cannot be ignored in response to the comment by william barnett pollak and wachter 1977 suggest dispensing with the notion of commodity prices and treating the demand for commodities as a function of goods prices this approach confounds tastes and technology but it eliminates the troublesome concept of commodity prices as parameters when in fact they are likely to be endogenous in this paper we show that results from positive analysis such as the critique by pollak and wachter have implications for the use of the household production framework for welfare analysis the household production function approach has had considerable appeal for measuring welfare effects of public actions in the environmental and natural resource areas gardner brown john charbonneau and michael hay elizabeth wilman yet traditional approaches to welfare measurement are frequently inapplicable we argue that welfare measurement in this framework is complicated by the difficulties of unravelling tastes and technology we extend pollak and wachter s results by demonstrating that marshallian demand functions for commodities cannot be uniquely defined thus marshallian functions cannot be used to derive exact compensated functions in the manner of jerry hausman and of george mckenzie and i f pearce nor can compensating and equivalent variation measures be bounded by marshallian consumer s surplus estimates following robert willig in fact duality results that normally allow us to move between marshallian and hicksian functions are not assistant and associate professors respectively department of agricultural and resource economics university of maryland college park md 20742 this paper is scientific article no a3404 contribution no 6476 of the maryland agricultural experiment station we wish to thank darrell hueth james opaluch v kerry smith and elizabeth wilman for comments on an earlier draft

what s the use welfare estimates from revealed preference models when weak complementarity does not hold abstract in this paper we consider the theoretical and empirical ramifications of welfare measurement in revealed preference models when weak complementarity does not hold in the context of a kuhn tucker model of recreation demand we show that while it is possible to estimate preferences that do not appear to exhibit weak complementarity the calculation of welfare measurements from these models requires a cardinal interpretation of preferences that cannot be tested furthermore we reiterate the under appreciated fact that even traditional use value estimates require a cardinal restriction on preferences that while often intuitive also cannot be tested we demonstrate empirically that the choice of restrictions can have significant ramifications as use value estimates can vary based on the assumed preference structure

food consumption in urban china an empirical analysis this paper examines consumption patterns of urban households in china using aggregated household consumption data a demand system comprising six commodities rice pork vegetables fish eggs and fruits is estimated using a two stage budgeting procedure which incorporates an almost ideal deamnd system aids in each stage elasticity estimates from the system are plausible and consistent with other relevant studies results from this study strengthen the evidence of the emergence of a large chinese market for non stable food the study provides rationale and basis for additional research into chinese food consumption especially processed food

recovering hicksian consumer surplus within a collective model hausman s method for the household the purpose of this paper is to describe the implications of the collective model of household behavior for the methods used to estimate the economic value of non marketed environmental resources after demonstrating how the separability restrictions inherent in the collective model allow individual preference and household income allocation choices to be distinguished the paper demonstrates how the framework can be used to recover hicksian consumer surplus an algebraic example is used to illustrate how the framework can be used in valuing environmental resources

an econometric analysis of rice consumption in the people s republic of china abstract rice is the most important staple food in the people s republic of china prc in many asian countries rice appears to have become an inferior good with income increases leading to declines in per capita consumption as other food products are substituted for rice in this study human rice consumption is analyzed with a model that allows income elasticities to vary with income levels an additional equation accounting for rice disappearance as seed livestock feed industrial uses and exports is also estimated the results of the analysis indicate that rice has become an inferior good in china and per capita consumption is likely to decline in the future population growth and the growing use of rice for other purposes means that total rice disappearance will continue to increase although at a rate that is lower than has historically been the case the predicted changes in rice consumption will create pressures to adjust production and trade patterns for rice as well as other agricultural products

recovering weakly complementary preferences abstract this paper demonstrates a method for recovering weakly complementary expenditure and indirect utility functions while integrating back from marshallian demand specifications that do not intrinsically embody weak complementarity weak complementarity of a good with quality provides information about how the constant of integration over price must behave with respect to quality and this information can be incorporated into the process of recovering preferences the weakly complementary expenditure and indirect utility functions are recovered for the linear demand specification and for the stone geary utility function with any value of the subsistence parameter

pesticide residue risk and food safety valuation a random utility approach a new approach is developed for integrating consumers risk perceptions with stated purchase behavior when consumption decisions must be made with incomplete information the application involves health risks from exposure to pesticide residues on fresh produce unlike traditional food demand analysis the present approach treats produce choices as discrete outcomes resulting in a random utility model empirical results from a pilot survey suggest a clear linkage between perceptions and behavior in response to new risk information consumers stated preferences for safer produce were primarily influenced by price differences and perceived risks not by the technical risk information provided alone however the linkage between behavior and valuation was less clear cut the risk price tradeoffs entailed by contingent discrete choices indicate high price premia for small risk reductions and little variation in price premium across alternative risk reductions

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

conditional and unconditional food demand elasticities in a dynamic multistage demand system this paper estimates conditional and unconditional demand elasticities in a three stage analysis of consumer demand for food and non food items in greece a dynamic version of the aids model is specified and estimated and full system misspecification tests applied correction formulas for price and expenditure elasticities are used to calculate unconditional elasticities from conditional demand sub systems all food items rank as price inelastic deviations between the calculated conditional and unconditional price and expenditure elasticities are found to be significant demonstrating the importance of correcting conditional elasticities before they can be used for policy purposes or welfare analyses

measuring the impact of water supply interruptions on household welfare water scarcity frequently leads to a need for rationing the choice of an adequate rationing method should be based on the impact on consumer welfare that is produced by each rationing plan some rationing schemes such as the frequently used supply interruption method can be regarded as changes in the characteristics of the good in this case time availability that do not modify the pre set consumer budget under the standard theoretical restrictions on consumer behavior compensating or equivalent variations surpluses cannot be used to identify the impacts of these methods on household welfare in this paper we propose a set of sufficient conditions with respect to the utility function that allows for the evaluation of the compensating or equivalent variations surpluses associated with changes in goods quality even if those goods are considered to be essential for consumers we use these conditions to compare the welfare losses associated with the water supply cuts implemented in seville spain to those that would result if water was instead rationed using price changes

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

specification of the logit model the case of valuation of nonmarket goods abstract we address the proper specification of the logit model for estimation of nonmarket commodity demand economic theory is used to show the conditions which must be met by the logit functional form if it is to yield valid estimates of welfare change measures and demand relationships an empirical example is used to illustrate the argument recreational boating data were collected using the contingent valuation method cvm in texas in one instance the demand curve is positively sloped due to the specific functional form chosen the estimated demand curve for the theoretically preferred functional form has the expected negative slope

are there halo effects of us grain export promotion the objective of the research reported in this article is to examine both the own and cross effects of us export promotion for us and non us grains we focus on two previously neglected dimensions of the cross effects first we examine whether a halo effect i e promotion for one us commodity positively effects demand for another us commodity for us commodities exists second we look at whether us grain export promotion has public goods characteristics that is does us grain promotion have a halo effect on grain demand for other countries we use a linear approximation of an almost ideal demand system la aids model for us and non us rice wheat and sorghum that include us export promotion as one of the explanatory variables our goal is to provide further empirical evidence for the halo effect issue by using us grains as a case study since this sector has not been previously explored in addition to estimating own and cross export promotion elasticities the magnitude of cross effects on us market s

revealed preference and household production abstract the paper deals with the possibilities of recovering the underlying preference ordering from observed behavior when nonmarket goods are employed in household production the problem is relevant for the evaluation of environmental goods and for the measurement of welfare in environmental policy it is shown that preferences can be recovered if and only if a corresponding mixed demand system can be integrated this system can be derived from observable behavior and the household production functions imposed the conditions for its integrability are presented and can be checked therefore the approach suggested is operational and allows to decide whether the behavior observed and the household production functions chosen as maintained hypothesis are consistent this result is important since the evaluation of nonmarket goods in this framework crucially depends on the choice of the household production functions

on the flexibility of the rotterdam model abstract the rotterdam model is a discrete approximation to a continuous time model and the approximation errors are known to be small unlike other approximations with fixed parameters at the point of approximation the rotterdam model s coefficients differ at each observation but are treated as constants during estimation this procedure introduces relatively large approximation errors which are a potential source of bias in this paper the performance of the rotterdam model in reproducing the characteristics of four integrable demand systems is assessed as anticipated the model s performance is directly related to the variability of the underlying coefficients and the bias in the parameter estimates is minimal if the coefficients are relatively constant the model can also discriminate well against an invalid alternative hypothesis however in the absence of a computationally feasible varying parameter methodology the conclusion has to be that tests of parameter stability are essential when using the rotterdam model

an investigation into the demand for alcoholic beverages in canada a choice between the almost ideal and the rotterdam models in this article i investigate the historical pattern of interactions in the demand for three categories of alcoholic beverages in canada using both the differential almost ideal and the differential rotterdam demand systems i evaluate these models based on several decision criteria including model encompassment based on the j test structural stability conformity with demand theory and the credibility of the estimated price and income responses in an attempt to determine which of these models is better suited for explaining the demand for alcoholic beverages the results reveal that both models satisfy the restrictions of demand theory and of structural stability but the rotterdam model is preferable on grounds of the remaining two criteria

rice in asia is it becoming an inferior good empirical results using time series and cross sectional data indicate that rice in asia is becoming an inferior good income elasticities declined and in some cases became negative between 1961 and 1985 in most of the fourteen asian countries studied accordingly domestic demand for rice in these countries is not likely to grow as rapidly as it has in the past as a consequence there is a potential for excess supplies of rice to develop in asia putting downward pressure on rice prices while governments in asian countries may need to adjust their rice policies in the future world rice suppliers may need to develop new markets for rice

demand for cereal grains in asia the effect of urbanization abstract this paper analyzes the effects of urbanization on demand for cereal grains rice wheat and coarse grains in nine asian countries a complete demand system almost ideal demand system in linear form is estimated in two stages based on aggregate time series data from 1960 to 1988 in the high income countries i e japan and south korea urbanization was observed to significantly reduce demand for cereal grains in the lower income countries demand for cereal grains either increased or remained the same with urbanization among cereal grains urbanization has had negative effects on demand for rice and coarse grains but consistently positive effects on demand for wheat only japan and thailand among the countries studied have negative income elasticities of demand for total cereal grains and for rice in particular hence rice remains a necessity and a normal good in most asian countries previous estimates of income elasticities of rice based on time series aggregate data tend to be lower than those based on cross section household level data when urbanization is explicitly specified in the demand model the estimates of income elasticities from time series data turn out to be consistent with those from cross section data

on measuring the value of a nonmarket good using market data we use line integral theory to lay out in a more general theoretical framework the conditions under which it is possible to measure with market data the welfare effects of a change in a nonmarket good we present in detail a numerical method of measuring the value of nonmarket goods using market data under either weak neutrality or weak complementarity our numerical method is more flexible than the existing analytical method because it can be used with any well behaved marshallian demand function and can be used even when the willig condition does not hold

consumer s surplus without apology the purpose of this paper is to settle the controversy surrounding consumer s surplus and by so doing to validate its use as a tool of welfare economics i will show that observed consumer s surplus can be rigorously utilized to estimate the unobservable compensating and equivalent variations the correct theoretical measures of the welfare impact of changes in prices and income on an individual i derive precise upper and lower bounds on the percentage errors of approximating the compensating and equivalent variations with consumer s surplus these bounds can be explicitly calculated from observable demand data and it is clear that in most applications the error of approximation will be very small in fact the error will often be overshadowed by the errors involved in estimating the demand curve the results in no way depend upon arguments about the constancy of the marginal utility of income consequently this paper supplies specific empirical criteria which can replace the apologetic caveats frequently employed by those who presently apply consumer s surplus moreover the results imply that consumer s surplus is usually a very good approximation to the appropriate welfare measures to preview below i establish the validity of these rules of thumb for a

meat meets meta a quantitative review of the price elasticity of meat the price elasticity of meat has been estimated in numerous studies that utilize a variety of disparate modeling procedures in light of differences in the literature a meta analysis is performed to assess the sensitivity of the meat price elasticity to a number of characteristics including the type of meat specification of demand nature of data estimation method characteristics of the publication outlet and location of demand the results from estimating linear and box cox meta regressions coupled with different panel data treatments reveal that these characteristics have differing influence on the reported price elasticity