socio economic characteristics and the effect of taxation as a health policy instrument abstract this paper analyses the quantitative effects of using economic instruments in health policy on the basis of price elasticities calculated from estimated demand systems the nutritional effects of various taxation schemes are compared for households in different age groups and social classes focusing on the consumption of saturated fats fibre and sugar it is generally found that the impact of price instruments is stronger for lower social classes than in other groups of the population with regard to age groups it is mostly the youngest that decrease their demand for saturated fat in response to price changes while it is mostly the middle aged who exhibit price responsiveness in their demand for sugar these groups are however not considered as key target groups for dietary regulation thus tax instruments may be effective in improving diets on average but the design of the instruments and the targeting of vulnerable groups with special needs should be done with care it should be noted that a tax on a single nutrient or food may have undesired effects on the demand for other food components though this may be avoided by introducing taxes subsidies on several food products simultaneously

the effect of using consumption taxes on foods to promote climate friendly diets the case of denmark abstract agriculture is responsible for 17 35 of global anthropogenic greenhouse gas emissions with livestock production contributing by approximately 18 22 of global emissions due to high monitoring costs and low technical potential for emission reductions a tax on consumption may be a more efficient policy instrument to decrease emissions from agriculture than a tax based directly on emissions from production in this study we look at the effect of internalising the social costs of greenhouse gas emissions through a tax based on co 2 equivalents for 23 different foods furthermore we compare the loss in consumer surplus and the changed dietary composition for different taxation scenarios in the most efficient scenario we find a decrease in the carbon footprint from foods for an average household of 2 3 8 8 at a cost of 0 15 1 73 dkk per kg co 2 equivalent whereas the most effective scenario led to a decrease in the carbon footprint of 10 4 19 4 but at a cost of 3 53 6 90 dkk per kg co 2 equivalent the derived consequences for health show that scenarios where consumers are not compensated for the increase in taxation level lead to a decrease in the total daily amount of kj consumed whereas scenarios where the consumers are compensated lead to an increase most scenarios lead to a decrease in the consumption of saturated fat compensated scenarios leads to an increase in the consumption of added sugar whereas uncompensated scenarios lead to almost no change or a decrease generally the results show a low cost potential for using consumption taxes to promote climate friendly diets

demand elasticities for food products in brazil a two stage budgeting system the object of this article is to estimate demand elasticities for a basket of staple food important for providing the caloric needs of brazilian households these elasticities are useful in the measurement of the impact of structural reforms on poverty a two stage demand system was constructed based on data from household expenditure surveys pof produced by ibge the brazilian bureau of statistics in 1987 88 and 1995 96 we have used panel data to estimate the model and have calculated income own price and cross price elasticities for eight groups of goods and services and in the second stage for 11 sub groups of staple food products we estimated those elasticities for the whole sample of consumers and for two income groups

the welfare effects of energy price changes due to energy market reform in mexico abstract despite being a large energy producer and exporter mexico may soon become a net total energy importer due to a decline in oil reserves and increasing domestic consumption to increase efficiency in the energy market mexican authorities approved a constitutional amendment aiming to open the state run energy markets to competition in 2013 the reform is expected to raise efficiency and to lower energy prices in the long run however it will take some time for the new institutional arrangements to settle and the reform objectives to materialize the removal of subsidies which is expected to take place after the reform will also raise prices particularly in the short run in this paper we analyze the effect of likely energy price changes due to energy market reform on household consumption and welfare in different income groups we estimate the quaids model using the nonlinear sure method and the mexican household budget surveys for the period 2002 2012 to obtain elasticities the results show great heterogeneity in elasticities across energy types and income groups specifically energy demand is elastic with respect to income but changes in prices have mixed effects among energy types the welfare effect of the price changes on low income households will be 9 times stronger than that on the mid income households and 18 times on and the high income households this warrants a compensation package to make the reform socially acceptable

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

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

optimal taxation and cross price effects on labor supply estimates of the optimal gas tax abstract this study estimates parameters necessary to calculate the optimal second best gasoline tax most notably the cross price elasticity between gasoline and leisure prior theoretical work indicates the importance of this elasticity but despite this almost none of the prior studies of commodity taxation and none of the studies on second best environmental regulation actually estimate it using household data we find that gasoline is a relative complement to leisure and thus that the optimal gasoline tax is significantly higher than marginal damages the opposite of the result suggested by the bulk of the prior literature indeed even if there were no externalities at all associated with gasoline the optimal tax rate would still be almost equal to the average gas tax rate in the u s following this approach to estimate cross price elasticities with leisure could strongly influence estimates of optimal rates for other important commodity or pollution taxes

organic labelling private label and u s household demand for fluid milk abstractthe u s fluid milk market has been experiencing two trends in the recent decade the fast growth of private label milk and organic milk using the data from nielsen homescan panel we estimate a censored demand system to study the demand relations among types of milk differentiated by brand types and organic status we find that sociodemographic factors still play important roles in household choice of milk types and fluid milk as a whole is an inferior good moreover as income increases households are more likely to shift from buying conventional milk to organic milk and from private label conventional milk to branded conventional milk as indicated by the asymmetric cross price elasticities corresponding implications for milk producers and marketers are discussed

units of measurement and the stone index in demand system estimation the stone index typically used in estimating linear almost ideal demand systems is not invariant to changes in units of measurement which may seriously affect the approximation properties of the model a modification to the stone index or use of a regular price index instead are both desirable practices in estimating linear ai models

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

price principle and the environment should preferences count as a normative discipline welfare and therefore resource economics postulates that preferences should count in the allocation of resources this postulate cannot be justified in relation to choice or to well being the nor mative qualities that attend choices e g ac countability responsibility commitment and consent explain why choices should count but not preferences which are not actions but theo retical entities constructed ad hoc from stipu lated descriptions of behavior they are then said to explain the satisfaction of preferences moreover has no demonstrable relation with any conception of welfare or well being not sim ply defined in terms of it jel a13

video game demand in japan a household data analysis various economic studies of the video game industry have focused on intra industry details this article complements the approach by highlighting broader budget allocation by households using the total households data of the family income and expenditure survey this article estimates the demand model for video games estimation results show the effects of household income and demographic factors and prices of goods on the expenditure share of video games these results indicate the importance of explicitly considering a households budget allocation or at least including information on households

the relevance of attitudinal factors for the acceptance of energy policy measures a micro econometric analysis abstract this paper empirically examines the individual support of the german energy transition in total and especially of six single energy policy measures which are components of the energy transition our micro econometric analysis with binary and ordered probit models on the basis of data from a broad survey of citizens reveals the important role of several attitudinal factors with respect to our indicators for perceived personal costs of the energy transition the estimation results point to a weak evidence for economic self interest due to some negative correlations between expected energy price increases due to the energy transition and the support of single energy policy measures interestingly however the concern that the energy transition alone causes strong energy price increases is not shared by the majority of the respondents the estimation results also suggest that the support of several energy policy measures is strongly correlated with environmental values however the most important attitudinal factor is obviously political identification the econometric analysis suggests that an overall left green policy identification is positively correlated with the support of the energy transition in total and an identification with ecological policy is positively correlated with the acceptance of several single energy policy measures the econometric analysis especially supports the more sophisticated categorization of political orientation since for example a liberal conservative policy orientation is not significantly correlated with the support of the energy transition in total

demand estimation in the presence of stochastic trend and seasonality the case of meat demand in the united kingdom if budget shares have stochastic trend or seasonality or both then demand equations based on the assumption of deterministic trend and deterministic seasonality will be mis specified we test this proposition by estimating a linearized almost ideal lai demand system for meat demand in the united kingdom using harvey s structural time series methodology we demonstrate that the model specification allowing for stochastic trend and deterministic seasonality performs best in terms of diagnostic tests and goodness of fit measures it is also shown that the model with stochastic trend is better at out of sample forecasting

testing and incorporating seasonal structures into demand models for fruit it is widely recognized that purchases of perishable agricultural products are affected by the seasonal cycles of production when there are seasonal effects where seasonal buying is not explained by prices alone the seasonal component can be captured using appropriate dummy variables in a demand model however over time the introduction of different varieties and foreign sources of supply in the market may affect the seasonal structure in unknown ways and because of this it becomes important to identify and test for characteristics of seasonal structure in demand models in this article we set out to measure and test the various characteristics of the seasonal component of fruit demand we model seasonality in the context of an almost ideal demand system aids model where we consider several types of fruit demand in the united states

a cointegrated vecm demand system for meat in italy this article applies cointegration techniques to estimate a monthly demand system for meat in italy in contrast to existing studies where engle and granger s two step procedure and triangular vector error correction model tvecm representations are usually exploited it applies a cointegrated vector error correction model vecm where also prices and expenditure enter endogenously the system and the cointegration rank is not assumed to be known a priori but subject to inference it highlights some of the advantages of using the vecm compared to the tvecm including the possibility of testing the cointegration rank of the system and the weak and strong exogeneity of prices and expenditure within a well specified statistical model this may lead to remarkable improvements in the efficiency of parameters system estimates

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

lithuania s food demand during economic transition the linear approximate version of the almost ideal demand system la aids model is estimated using data from the lithuanian household budget survey hbs covering the period from july 1992 to december 1994 price and real expenditure elasticities for 12 food groups were estimated based on the estimated coefficients of the model very little or nothing is known about the demand parameters of lithuania and other former socialist countries so the results are of intrinsic interest estimated expenditure elasticities were positive and statistically significant for all food groups while all own price elasticities were negative and statistically significant except for that of eggs which was insignificant results suggest that lithuanian household consumption did respond to price and real income changes during their transition to a market oriented economy

does everyone lose through a short term trough in oil prices abstract the recent collapse in oil prices is predicted to have rapid and disastrous effects on the world economy

on price indices in the almost ideal demand system a number of papers have discussed the relationship between the almost ideal demand system aids and its linear approximation la aids in this paper it is shown that if the prices in the system are normalized to one the aids and la aids representations are identical at the point of normalization also at the point of normalization the expressions for price and expenditure elasticities from both systems are identical

five a day a price to pay an evaluation of the uk program impact accounting for market forces we provide an ex post assessment of the uk 5 a day information campaign where the positive effects of information are disentangled from potentially conflicting price dynamics using 4 years of data from the expenditure and food survey between 2002 and 2006 we estimate that the 5 a day program has lifted fruit and vegetable consumption by 0 3 portions on average we also provide quantitative evidence of a differentiated impact by income group ranging from 0 2 to 0 7 portions all impacts are larger than those observed by simply comparing pre policy and post policy intakes

dynamic model of fresh fruit promotion a household production approach many studies consider the dynamic effects of commodity promotion on demand but few derive the theoretical basis for these effects in a model of optimal consumer behavior this study develops a dynamic household production model of u s fresh fruit consumption which it uses to evaluate the effectiveness of advertising and promotion expenditures by the washington apple commission estimates from a dynamic dual generalized leontief system show direct advertising to be marginally more effective than retail promotion in increasing apple sales but advertising has positive spillover effects to sales of other fruits whereas promotion reduces sales of competing products

estimates from a consumer demand system implications for the incidence of environmental taxes abstract most studies suggest that environmental taxes are regressive making them less attractive policy options we consider the distributional effects of a gasoline tax increase using four incidence measures and under three scenarios for gas tax revenue use to incorporate behavioral responses we use consumer expenditure survey data to estimate a consumer demand system that includes gasoline other goods and leisure our estimates confirm that when revenues are not recycled a gasoline tax is regressive use of incidence measures that ignore demand responses however will substantially overstate this regressivity in contrast the differences between the equivalent variation and easier to implement consumer surplus measures are relatively small in addition our results suggest that using the additional gas tax revenue to fund labor tax cuts makes the policy substantially less regressive while using the revenue to fund lump sum transfers actually makes it progressive

the joint demand for health care leisure and commodities implications for health care finance and access in vietnam abstract this paper explores linkages between the demand for health care providers and the consumption of food non food goods and leisure in vietnam using a mixed continuous discrete dependent variable model cross price elasticities calculated from the model suggest there are strong substitution effects between health care leisure and certain commodities the model allows us to explore the implications of replacing user fees with alternative forms of health care finance such as commodity taxes in particular the results suggest financing public health care services with a non food sales tax rather than user fees would be more progressive and would improve access to care

price and prospects for oil carrying the burden of excess capacity in the 1980s and beyond abstract the continuing decline in world oil prices will not be halted in the short term and prospects for the long run are not encouraging there is a problem of unprecedented gravity in the surplus capacity of the oil industry a glut of 10 million bbl day of crude oil remains unsold the cohesion of the opec cartel is becoming more strained and a sizeable proportion of refinery plant has been taken off stream the basic difficulty is that high interest rates have curbed international capital formation and depressed demand upward pressures on the us dollar have been created by the deficit on us domestic and external accounts and have retarded the recovery of the global economy today the cost of money exceeds the factor price of oil and the market is highly unstable the devastating costs of carrying surplus capacity are likely to survive through the 1980s

price competition in u s brewing this study utilizes a brand level dataset that captures a unique natural experiment a 100 increase in the excise tax to evaluate different pricing models in the u s beer industry to assess the plausibility of different models the increase in marginal cost resulting from the tax increase is exploited observed prices in the post increase period are compared to the prices that should be observed under various pricing models three types of models are analyzed bertrand nash leadership and collusion results indicate that extreme cases of collusion can be confidently ruled out while several models may explain the observed prices equally well

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

valuation of new products in attribute space we contribute to the literature on new product valuation by presenting a model of new product introduction based on the distance metric dm approach of pinkse slade and brett 2002 models based on the dm approach are capable of dealing with highly differentiated food categories that are often responsible for the lion s share of new product activity furthermore since new products are typically characterized by differences in observable attributes the dm approach is appropriate in that it directly accounts for such differences our findings reveal that consumers benefit from new products even when the number of alternatives is already high copyright 2007 oxford university press

choices without prices without apologies valuing is usually regarded as a process of compressing information about attributes into a single metric armed with this reduced form of compact information the consumer can consider a particular object with a particular price attached or implied and make an informed decision but the process of valuing is less straightforward than we ordinarily suppose when environmental goods and services become the object of information compaction it is possible that important information is lost we comment on the choice problem germane to environmental goods and services and challenge the presumption that environmental choices made without explicit pricing are inferior to those in which hypothetical valuation studies are undertaken

tariff quota administration in china s grain markets an empirical assessment in 2016 the u s launched a trade dispute against china at the world trade organization arguing that china has been restricting its grain imports via tariff quota administration despite sharp criticisms by the u s the extent to which the grain imports were restricted in china remains largely unknown primarily due to that china s grain import behaviors are still under researched the u s grain export sector might actually gain little from china s grain trade liberalization in the short run since china has become less import dependent on the u s through the pursuit of import diversification in this context this article aims to quantify impacts of the tariff quota administration on china s grain imports from its trading partners we calculate ad valorem tariff equivalents of the tariff quota administration and then estimate import demand elasticities using a source differentiated import demand model we find that the tariff quota administration might have reduced china s quota fill rates for the grain commodities by 10 35 during 2013 2017 in particular the u s wheat exports to china were largely negatively affected we also find that the tariff quota administration in china acts like a variable import levy its import restrictiveness varies negatively with world prices leading to lower import demand elasticities

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

price premium for high efficiency refrigerators and calculation of price elasticities for close substitutes a methodology using hedonic pricing and demand systems this article uses the hedonic pricing method to estimate the price premium paid for the highest energy efficiency label a in the refrigerators market of the basque autonomous community spain the estimated figure is 8 9 of the final price or about 60 euro which represents one third of the energy savings that a consumer gets during the lifetime of a refrigerator with the highest energy efficiency label this figure is then combined with the linear version of the almost ideal demand system la aids to obtain own and cross price elasticities of demand the information presented here is useful for policy design and analysis the results indicate that the demand for refrigerators with the highest energy efficiency label is highly sensitive to price variations

an error correction almost ideal demand system for meat in greece this paper represents a dynamic specification of the almost ideal demand system aids based on recent developments on cointegration techniques and error correction models based on greek meat consumption data over the period 1958 1993 it was found that the proposed formulation performs well on both theoretical and statistical grounds as the theoretical properties of homogeneity and symmetry are supported by the data and the lechatelier principle holds regardless of the time horizon beef and chicken may be considered as luxuries while mutton lamb and pork as necessities in the short run beef was found to have price elastic demand pork an almost unitary elasticity whereas mutton lamb chicken and sausages had inelastic demands in the long run beef and pork were found to have a demand elasticity greater than one whereas mutton lamb chicken and sausages still had inelastic demands all meat items are found to be substitutes to each other except chicken and mutton lamb and pork and chicken

estimating and testing the compensated double log demand model in spite of the proliferation of flexible functional forms for consumer demand systems the double log demand model continues to be popular especially in applied work calling for single equation models it is usually estimated in uncompensated form it can also be estimated in compensated form by deflating the income variable alone using stone s price index the compensated form has the same right hand side as a single equation version of the popular linear approximation to the almost ideal demand model facilitating the construction of a test for choosing between the two alternatives this paper demonstrates these results develops the specification test and illustrates its application using us meat consumption data simulations suggest that the test is well behaved with good power in typical applications

outlook for the international oil market and options for opec abstract a fundamental misinterpretation of post 1970 events in the international oil market has severely curbed oil demand and led to conditions in which much of the world s lowest cost reserves of energy are in danger of remaining unexploited there is instead an increasing use of inherently higher cost sources of energy so undermining world economic growth prospects a return to the preferential use of low cost oil and gas without further exacerbating already strained north south relationships can now only be achieved in the context of a difficult to negotiate opec oecd agreement on a long term development strategy

demand for meat and dairy products by turkish households a bayesian censored system approach we extend the tobit censored linear equation system procedure to utility theoretic demand functions along with a mapping mechanism to impose the adding up restriction implied by consumer utility maximization theory a theoretical restriction very often ignored in previous empirical studies with censored demand systems in this context the bayesian markov chain monte carlo mcmc procedure is applied to the censored linear approximate almost ideal demand system laids for 12 food products using data from the turkish household expenditure survey all own price elasticities are negative and expenditure elasticities positive uncompensated own price elasticities for rural households are generally much higher than those for their urban peers though demand for most food products are own price elastic for both types of households the differential patterns in demand elasticities between urban and rural households become even more evident almost twice as relatively more expensive foodstuffs are consumed showing that accessibilities to alternative products have made rural turkish households more cognizant toward price changes in foods household characteristics play a key role in food expenditures notably so in urban areas and regional and seasonal differences are also present

determinants of price elasticities for private labels and national brands of cheese an almost ideal demand system model is developed and used to estimate price elasticities for us cheese sold at retail growing consumption of cheese coupled with fierce competition between private labels and national brands serves as motivating factors for this study per capita consumption of cheese grew by 75 during 1980 2004 and private labels captured a rising share of this growth private labels today account for 35 of market share national brands for the remaining 65 kraft accounts for 45 of national brands but price increases for kraft brands led to a sizeable price gap between its brands and private labels this gap helped to stimulate growth of private labels marketing managers seek to capitalize on both growing cheese sales and price gaps for brands relevant information for marketing managers is consumer sensitivity to price changes this study uses 69 weeks of scanner data with consumers segmented by income levels to derive price elasticities for both lower and higher income consumer

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

modeling the demand for alcoholic beverages and advertising specifications in this paper the demand for beer wine spirits and soft drinks in ontario is modeled in two parts an equation is specified to endogenize group expenditures and a demand system is set up to allocate budgeted group expenditures across types of beverages advertising is allowed to influence both the level of group expenditures and its allocation three popular advertising specifications are compared using the j test and the likelihood dominance criterion even though all three specifications fitted well according to standard criteria the calculated expenditure price and advertising elasticities were sensitive to the manner with which advertising is specified this clearly highlights the need to rely on a sound criterion to identify a dominant specification from the identified dominant specification we found that advertising has very subtle effects on expenditures on alcoholic beverages group and individual beverages thus advertising is not effective in enlarging markets and this suggests that firms especially breweries use advertising to compete in zero sum market share games from a public policy perspective our results are comforting but future research should investigate whether the neutral effect of advertising on aggregated expenditures hide substantial offsetting changes in the drinking habits of individuals 2000 elsevier science b v all rights reserved

consistent estimation of censored demand systems using panel data we derive a joint continuous censored commodity demand system for panel data applications unobserved heterogeneity is controlled for using a correlated random effects specification and a generalized method of moments framework used to estimate the model while relatively small differences in elasticity estimates are found between a flexible random effects specification and one that restricts the random effect coefficient to be time invariant larger differences are observed when comparing the flexible model to a pooled cross sectional estimator the results suggest the limited ability of such estimators to control for preference heterogeneity and unit value endogeneity leads to parameter bias

efficiency equity tradeoffs in targeting payments for ecosystem services this article develops an analytic framework to analyze the tradeoff between economic efficiency and distributional equity in targeting payments for ecosystem services pes it also proposes an empirical procedure to trace out the efficiency equity frontier where the program is pareto optimal in the sense that it cannot be improved upon to achieve either higher efficiency or distributional equity without compromising the other we apply the procedure to the conservation reserve program crp the largest pes program in u s history to analyze a whether it is possible to improve both the efficiency and the distributional equity of the program and b what the choice made by crp administrators implies about the political economic balance results reveal that a crp administrators forfeited about 9 of efficiency for an 18 23 improvement in distributional equity depending on the equity indicator used in the eighteenth signup of the crp b reducing the maximum allowable rental rate for all contracts would improve efficiency at the cost of distributional equity c reducing the maximum county enrollment cap would reduce efficiency without generating much improvement in distributional equity and d the crp targeting criterion could be redesigned to achieve both higher efficiency and higher distributional equity

elasticities in aids models comment green and alston have written two articles 1990 1991 for the journal on the correct method of calculating elasticities for the linear approximate almost ideal demand system la aids their articles are a departure from the typical approach to the la aids the la aids is generally used to estimate the parameters of deaton and muellbauer s almost ideal demand system aids the elasticity formulae for the aids are known green and alston s formulae are relevant only if the la aids is treated as a system in its own right such a treatment has merit however after checking the implications of treating the la aids as a system in its own right we discover that the la aids itself lacks merit

demand for dairy products in the eu abstract in the eu dairy sector given the remaining high protective tariffs and the quota system the main factor that drives dairy product market prices is the demand this paper evaluates the development of demand in the eu and presents estimates of consumption trends and forecasts for the future as well as estimates of elasticity with respect to prices and income in two major eu consumer countries france and italy we use two methods to estimate the development of demand for dairy products one based on a multi stage demand system and another based on a single trend equation the two methods generally lead to the same qualitative results but trend projections are larger using the demand system approach which is based on a shorter data period this difference is thus partly explained by the fact that high trend projections are not sustainable over a long period the results show a decreasing consumption of butter and fluid milk and an overall growth in protein and fat consumption nevertheless the increase in fat consumption should be more moderate than the consumption of protein the results also show that the demand for dairy products is relatively price inelastic but is more sensitive to changes in income especially for butter and cheese categories as shown by the use of a partial equilibrium model of dairy markets the likely impact of the cap reform strongly depends on the development of demand for dairy products in the eu more research effort on demand analysis is therefore crucial in order to assess the impact of reforms or trade negotiations more accurately and effectively

on self interested preferences for burden sharing rules an econometric analysis for the costs of energy policy measures abstract this paper examines the acceptance of burden sharing rules that refer to the costs of the german energy transition which is one of the most challenging and disputed national climate and energy policy measures based on data from a comprehensive survey of more than 2200 citizens the empirical analysis reveals that the polluter pays rule has by far the highest support compared with the ability to pay rule and especially compared with the equal pay rule which is widely refused in the sample since the distribution of the costs of the german energy transition is largely in line with a polluter pays rule its strong support seems to contribute to the high acceptance of the energy transition at all the main result of our econometric analysis with multivariate binary and ordered probit models is that not only some attitudinal factors like environmental values and political identification but especially economic self interest is relevant since equivalent energy expenditures have a significantly negative effect on the support of the polluter pays rule and especially equivalent income has a significantly negative effect on the preference for the ability to pay rule these results suggest that the use of distributional arguments for the criticism of energy policy measures is not necessarily value driven on the basis of real perceptions of distributive justice but can also be strategically motivated to prevent and combat economically unfavorable measures together with the strong general support of the polluter pays rule these results suggest that a sharp reorientation of the german energy transition due to distributional arguments is not very useful

estimating food demand in paraguay from household survey data we estimate a food demand system in paraguay based on the 1997 national household survey considering 12 food categories to obtain demand elasticity estimates from household survey data accounting for quality effects measurement errors and censored observations price indexes are obtained from ordinary least squares predictions of changes in unitary values caused by spatial and temporal variations and the two step estimation procedure shonkwiler and yen 1999 is applied our approach yields reasonable estimates of combined quantity and quality responses with respect to price results suggest distinct consumption behavior in urban and rural areas particularly for chicken eggs dairy and fats and oils which are likely because of differences in the food distribution system and availability of nonmarket food sources

the measurement of preferences over the distribution of benefits the importance of the reference point this paper uses the atkinson method which was initially developed to measure the shape of the social welfare function swf in the domain of income to measure the shape of the swf with respect to the distribution of health benefits two separate studies were conducted involving a total of 71 respondents a comparison of the results across the two studies suggests that reference point effects play an important role in determining responses thus more research is needed on the role that reference point effects ought to and do play in determining the nature and extent of the efficiency equity trade off before the results of studies of this kind can be interpreted as equity parameters which may simply be plugged into an appropriately specified swf

economic development and food production consumption balance a growing global challenge abstract rising affluence in major developing countries principally china and india and increasing diversion of agricultural resources for energy production usa and brazil sharply increase agricultural resource demand food consumption and production changes during development are analyzed using resource based cereal equivalent measures diet upgrades to livestock products require fivefold increases in per capita food resource use reflecting a consistent pattern which is only marginally affected by land base food consumption increases exceed production during early development leading to imports consumption eventually stabilizes at high incomes but production falls short in land scarce countries pork and poultry consumption increase the most less efficient beef and dairy production command a majority of agricultural resources

media coverage of biotech foods and influence on consumer choice in the last two decades few issues in the global agrifood sector have attracted as much media attention as biotechnology thousands of brief and in depth articles have been written focusing on diverse issues from the spectacle of ecological disasters to the promise of feeding a burgeoning world population among those accounts of alleged health risks could influence consumer perceptions and behavior directly indeed reporters across the globe have continued to draw parallels between biotechnology and other known food hazards such as mad cow disease and chemical contaminants such as dioxin they have also continued to raise the possibility of unknown long term health effects essentially framing biotechnology as a food safety risk marks and kalaitzandonakes marks et al there is evidence that this broad and often negative media coverage of biotechnology has raised public awareness influenced public perceptions and altered the public agenda on biotech foods in europe and elsewhere bauer durant bauer and gaskell this is not surprising as over 90 of consumers receive information about agrifood biotechnology primarily through the popular press and television hoban and kendall despite the apparent influence of media coverage on public perceptions however the question of whether such coverage has also affected consumer purchasing behavior has not been answered the answer to this question is broadly relevant with less than 2 of the u s population now engaged in agricultural production the average food consumer has diminishing personal experience and knowledge of agriculture

the values jury to aid natural resource decisions congressional legislation emphasizes that public resource allocation should reflect the values citizens assign to those resources yet information about assigned values and preferences of members of the public including economic measures of value required by decision makers is often incomplete or unavailable existing sources of information about the public s values for use in resource allocation decisions and damage assessment include existing markets public surveys including contingent valuation and public involvement each of these sources has serious limitations

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

the measurement of individual utility and social welfare it has been suggested by a number of economists that decisions about how to allocate scarce health care resources should be informed by the cost per quality adjusted life years qalys of the different alternatives one of the criticisms of the qaly approach is that it is based on the measurement of individual utility yet the values elicited are used to inform social choice in this respect it is argued that the qaly approach fails to take account of distributional issues that are known to be important in the context of health care this paper addresses this issue and presents an approach grounded in microeconomic theory that is flexible enough to deal with a wide range of efficiency equity trade offs while making the nature of the trade off transparent in addition it is an approach that is relatively simple to investigate empirically and the results of a preliminary study are presented as illustration of this

the symmetric problem in the linear almost ideal demand system abstract this paper derives a set of linear and nonlinear restrictions to make a n goods linear almost ideal demand system symmetric when all prices are allowed to vary the consequences of imposing such restrictions on the demand elasticities are illustrated using the united states meat consumption data

a new market for an old food the u s demand for olive oil while u s consumption of olive oil has tripled over the past two decades nearly all olive oil continues to be imported estimation of a demand system using monthly import data reveals that the income elasticity for virgin oils sourced from eu is above one but demand for nonvirgin oils is income inelastic the demand for olive oil as a single product is price inelastic differentiated by product characteristic and origin olive oils are highly substitutable with each other but not with other vegetable oils news about the health and culinary benefits of olive oil and the spread of mediterranean diet contribute significantly to the rising demand

by ounce or by calorie the differential effects of alternative sugar sweetened beverage tax strategies the obesity epidemic and excessive consumption of sugar sweetened beverages have led to proposals of economics based interventions to promote healthy eating in the united states targeted food and beverage taxes and subsidies are prominent examples of such potential intervention strategies this paper examines the differential effects of taxing sugar sweetened beverages by calories and by ounces on beverage demand to properly measure the extent of substitution and complementarity between beverage products we developed a fully modified distance metric model of differentiated product demand that endogenizes the cross price effects we illustrated the proposed methodology in a linear approximate almost ideal demand system although other flexible demand systems can also be used in the empirical application using supermarket scanner data the product level demand model consists of 178 beverage products with combined market share of over 90 the novel demand model outperformed the conventional distance metric model in non nested model comparison tests and in terms of the economic significance of model predictions in the fully modified model a calorie based beverage tax was estimated to cost 1 40 less in compensating variation than an ounce based tax per 3 500 beverage calories reduced this difference in welfare cost estimates between two tax strategies is more than three times as much as the difference estimated by the conventional distance metric model if applied to products purchased from all sources a 0 04 cent per kcal tax on sugar sweetened beverages is predicted to reduce annual per capita beverage intake by 5 800 kcal

impacts of world prices transmission to domestic rice markets in rural iran abstract this paper attempts to assess the degree to which iranian rural households have responded to the change in price of imported rice due to exchange rate unification and to examine the extent to which the policy has affected the economic welfare of various household income groups particularly the poor utilizing samples of 2472 households selected from national expenditure survey data of 2002 and 2003 armington and pass through elasticities were calculated as two measures of substitutability and are discussed separately for each household group in these areas the findings of this study indicate that domestic rice prices are associated differently with imported rice prices among the households however a price increase in imported rice that is mainly consumed by the poor worsens their position much more severely than for the rich people who mainly prefer domestic rice the findings contribute to the understanding of how price changes resulting from trade liberalization may affect various groups of households and the ways they respond to such changes in prices

the equity efficiency trade off in environmental policy evidence from stated preferences the design of environmental policy raises several equity issues in particular the distribution of benefits and costs at the same time it has often been argued that there is a trade off in environmental policy between equity and efficiency which brings these issues firmly to the attention of environmental economics in this paper we use a simple choice experiment to elicit individual preferences over equity efficiency trade offs in the context of two environmental problems local air pollution and global climate change we find that equity matters to people as much as efficiency does in the design and delivery of environmental policy

evaluating the linearized almost ideal demand system linearizing the almost ideal demand system laids by recourse to the stone share weighted price index is common practice two issues are addressed here first scrutiny of the errors in variables implications of the linearization reveals that not only is the sur estimator inconsistent but a consistent iv estimator cannot be constructed second some alternatives to the green alston elasticities specifically designed for the laids model are developed but neither these nor the green alston elasticities are found to have any advantages over the conventional elasticity formulae some errors in the green alston 1990 paper are corrected the inconsistency and elasticity issues are documented by a monte carlo investigation

petroleum exploration in the non opec ldcs the effects of recent world developments abstract the recent decline in world petroleum prices and the uncertainty with respect to future oil prices is having an adverse effect on exploration in non opec ldcs particularly in the oil importing developing countries the fiscal regimes of ldcs as applied to petroleum investment have tended to limit incentives for foreign investment especially in countries without high reserve potential recent developments have exacerbated these fiscal deterrents to petroleum investment particularly in countries where there is little likelihood of discovering large oil fields in addition the external debt crisis in a number of ldcs where petroleum operations are largely in the hands of government oil enterprises is likely to reduce the availability of external financing for oil exploration and development