the demand for food products an analysis of interpurchase times and purchased quantities in this paper we study household purchase behaviour of storable food products an inventory model is developed in which the household chooses an optimal stock level of the product storage of the product is costly there is a fixed cost per purchase occasion and the market price is sometimes discounted because of price promotions we show that the optimal purchase policy is an s s policy the model is used to derive predictions on the correlations between interpurchase times and purchased quantities on the one hand and prices on the other these predictions are empirically verified using consumer panel data

structural interpretation of vector autoregressions with incomplete identification revisiting the role of oil supply and demand shocks traditional approaches to structural vector autoregressions vars can be viewed as special cases of bayesian inference arising from very strong prior beliefs these methods can be generalized with a less restrictive formulation that incorporates uncertainty about the identifying assumptions themselves we use this approach to revisit the importance of shocks to oil supply and demand supply disruptions turn out to be a bigger factor in historical oil price movements and inventory accumulation a smaller factor than implied by earlier estimates supply shocks lead to a reduction in global economic activity after a significant lag whereas shocks to oil demand do not

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

savings and stabilization policy in a pre post socialist economy a simple macroeconomic model of a reforming socialist economy is presented with queuing in period one but market clearing prices in period two if queues grow longer each household chooses to save more not because it is forced but to economize on queuing effort for the benchmark case perfect foresight immediate price liberalization is the government s optimal policy it raises welfare the more so the greater is the monetary overhang and in terms of full prices it is deflationary at least eventually the model then is modified to allow for indexation a resale market adaptive expectations and limited credibility copyright 1995 by ohio state university press

modeling food consumption decisions as a two step process this article evaluates the suitability of tobit analysis of food consumption patterns by comparing results generated by a tobit model and a modification with a two step decision process two samples of adult women were selected from the 1977 78 nationwide food consumption survey and the 1985 continuing survey of food intakes by individuals results show strong statistical evidence for questioning tobit analysis in examining food consumption decisions determinants of the decision to consume food within a particular food group often differ from the determinants of how much to consume particularly for more highly defined food groupings analysis of u s food consumption patterns and their dietary aspects with respect to consumer behavior has a long history traditionally ordinary least squares ols or some variant has been used in many studies where ols was not appropriate the tobit method was applied tobit allows for a discrete mass point for observations as well as a continuous range of values for the dependent variable this nonlinear method has yielded good results in a variety of studies e g mccracken and brandt lane and devaney and fraker this article examines the suitability of the tobit method for analysis of food consumption patterns the tobit method assumes that the decision to consume a given food item is the same as the decision about the amount of the food to consume ignoring the two step nature of the decision process may hamper understanding of true behavioral patterns lead to erroneous conclusions and generate incorrect policy recommendations this article compares results generated by a tobit model and a modification with a two step decision process in the next section the statistical methods used to test whether food consumption is a one or two step decision process are described the following sections discuss the variables and data present the results and consider the conclusions

a double hurdle approach to modelling tobacco consumption in italy this article analyzes the determinants of tobacco expenditures for a sample of italian households a box cox double hurdle model adjusted for heteroscedasticity is estimated to account for separate individual decisions concerning smoking participation and tobacco consumption and to correct for nonnormality in the bivariate distribution of the error terms nested univariate and bivariate models are found to be excessively restrictive supporting the adequacy of a generalized specification estimation results show that consumption decisions are significantly affected by income and demographic characteristics in particular income positively impacts tobacco expenditure while participation probability substantially declines as age increases the existence of significant gender differences in both smoking participation and tobacco consumption patterns is found while high education and white collar occupation reduces the likelihood to smoke and tobacco expenditure levels single adult households have a lower

estimating consumption from expenditure data abstract most studies of distributional issues have focused on the distribution of income but the income information usually available suffers from well known deficiencies this paper explores an alternative approach to distributional analysis based instead on expenditure data in many countries including the united kingdom available household budget data provides information on expenditures only over a short period the problems that consequently arise in interpreting data of this sort are emphasised a general specification for the stochastic structure of expenditure data is presented and a procedure for estimating participant households underlying consumption from their observed expenditures developed and discussed

carbon tax simulations using a household demand model abstract the main objective of this paper is to analyse consumer response and welfare effects due to changes in energy or environmental policy to achieve this objective we formulate and estimate an econometric model for non durable consumer demand in sweden that utilises micro and macro data in the simulations we consider two revenue neutral scenarios that both imply a doubling of the co2 tax one that returns the revenues in the form of a lower vat and one that subsidise public transport one conclusion from the simulations is that the co2 tax has regional distribution effects in the sense that household living in sparsely populated areas carry a larger share of the tax burden

demand for nondurable goods a shortcut to estimating long run price elasticities when consumers stockpile static demand models overestimate long term price responses this article presents a dynamic model of demand with consumer inventories and proposes a shortcut to estimate the long run price elasticities without having to solve the dynamic program using french data on food purchases i find elasticities consistent with those that result from the full blown estimations found in the literature

a test of the habit formation hypothesis using household data numerous studies have confirmed the importance of habit formation as represented by a lagged dependent variable in demand analysis although all work to date has been based on aggregate time series data this study uses household level bls interview panel data to test the habit hypothesis an interrelated demand system for seventeen goods is estimated from cross section data and compared with a similar system based on time series data the results show that the habit component is significantly different between the two data sets and much smaller in the cross section data habit effects while not as large in cross section data as time series are still highly significant several explanations are offered concerning why the two sets of estimates differ copyright 1991 by mit press

testing the infrequent purchases model using direct measurement of hidden consumption from food stocks survey reports of zero expenditure result from either genuine non consumption or purchases undertaken too infrequently to observe during a survey with hidden consumption from stocks infrequent purchase models rely on untested hypotheses to distinguish these types of zeros we test such models with data from an unusual survey where food stocks are measured at the start and end of the survey reference period parameter estimates using these direct measures of hidden consumption out of stocks are compared with estimates from infrequent purchase models that attempt to recover this hidden consumption the results suggest considerable bias when using the infrequent purchase models copyright 2012 oxford university press

patterns of transition from plan to market patterns of transition from plan to market martha de melo cevdet denizer and alan gelb hungary s bankruptcy experience 1992 1993 cheryl w gray sabine schlorke and miklos szanyi why and when do governments initiate public enterprise reform jose edgardo campos and hadi salehi esfahani roads land use and deforestation a spatial model applied to belize kenneth m chomitz and david a gray industrial centralization in indonesia j vernon henderson and ari kuncoro guidlines on searching for a dalton improving tax reform an illustration with data from indonesia shlomo yitzhaki and jeffrey d lewis a new data set measuring income inequality klaus deininger and lyn squire

do consumers correctly expect price reductions testing dynamic behavior the assumption that consumers are fully rational and hold correct price expectations is demanding in dynamic settings we claim that it is testable provided that market level data on prices and purchases are available we find that consumers hold simple expectations regarding the timing of promotions for music albums consumers act as if they were aware of reductions but did not revise their beliefs over time the anticipation effect due to strategically delaying purchase amounts to 1 5 of the decision to purchase during regular periods these results have implications in terms of demand estimation optimal pricing and welfare computations

price distortion and shortage deformation or what happened to the soap the model of this paper generalizes the classical theory of consumer behavior to the more general case of prices that are not necessarily market clearing suppose that in addition to the money cost some sort of search waiting or other quasi fixed effort cost is needed to obtain goods the presence of this quasi fixed cost element will trigger an inventory policy a shortage equilibrium occurs when effort costs are such that in the corresponding inventory policy the flow of desired consumption does not exceed the available supply flow stock hoarding a critical phenomenon in the economics of shortage emerges as a natural component of this model a complete characterization of a stationary shortage equilibrium is given comparative statics and welfare analysis are performed the dynamic transition between steady states is analyzed to give insight into the mechanics of how shortages develop copyright 1991 by american economic association

probability of purchase amount of purchase and the demographic incidence of the lottery tax abstract when consumers indifference curves are discontinuous at zero perhaps due to stigma or fixed costs of purchase then factors influencing the amount purchased will have a different effect on the probability of purchase estimation of the demand for a commodity like lottery tickets requires a procedure that accounts for this tobit estimation commonly used in this literature does not allow for this generalization we investigate individual lottery ticket purchases using data from a survey of households our results are quite disparate from earlier studies regarding the effects of many demographic variables on probability of play level of play and expected lottery ticket purchases and imply a different demographic incidence of the lottery tax than previous studies suggest

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

determinants of dietary quality evidence from bangladesh summary whereas a large number of studies have been devoted to analyzing consumer demand for dietary quantity much less attention has been paid to the demand for dietary quality to address this gap in the literature this paper explores the determinants of dietary quality in bangladesh using data from a nationally representative household expenditure survey conducted in 2000 we find that while male education plays a positive role female education has a substantially stronger influence further female household headship is associated with lower dietary quality than male headship thus promoting female education and addressing the unique constraints faced by female headed households with respect to diet quality could be a significant policy instrument for addressing food insecurity in bangladesh

the impact of tax reforms designed to encourage healthier grain consumption in this paper we simulate the effects of tax reforms aimed at encouraging healthier grain consumption we use a rich data set on household grain consumption in 2003 from the market research institute gfk sweden combined with information on the nutritional content of the consumption we estimate behavioral parameters which are used to simulate the impact on the average household of tax reforms entailing either a subsidy on commodities particularly rich in fiber or a subsidy of the fiber density in grain products our results suggest that to direct the fiber intake towards nutritional recommendations reforms with a substantial impact on consumer prices are required regardless of the type of subsidy implemented the increase in the intake of fiber is accompanied by unwanted increases in nutrients that are often overconsumed fat salt and sugar funding the subsidies by taxing these nutrients or less healthy commodities helps to counteract such developments

the effects of additive outliers on tests for unit roots and cointegration this article discusses the properties of the univariate dickey fuller test and the johansen test for the cointegrating rank when there exist additive outlying observations in the time series we provide analytical as well as numerical evidence that additive outliers may produce spurious stationary hence the dickey fuller test will reject a unit root too frequently and the johansen test will indicate too many cointegrating vectors the results easily generalize to models with temporary change outliers through an empirical example we discuss how additive and temporary change outliers can be detected in practice and we show how dummy variables can be used to remove the influence of such extreme observations

household saving in developing countries first cross country evidence although most studies have relied on domestic or private sector saving data this article uses household data available from the u n system of national accounts for a sample of 10 countries household saving functions are estimated using combined time series and cross country observations in order to test households responses to income and growth rates of return monetary wealth foreign saving and demographic variables the results show that income and wealth variables affect saving strongly and in ways consistent with standard theories inflation and the interest rate do not show clear effects on saving which is also consistent with their theoretical ambiguity foreign saving and monetary assets have strong negative effects on household saving which suggests the importance of liquidity constraints and monetary wealth in developing countries

an analysis of under reporting for micro data sets the misreporting or double hurdle model abstract this paper analyzes under reporting through the two extended tobit models p tobit and double hurdle models the empirical results clarify the characteristics of under reporting misreporting plays an important role in under reporting

terms of trade and real exchange rates the canadian evidence abstract this paper presents empirical evidence linking the canada us real exchange rate with the terms of trade using recently developed econometric methods for nondashstationary data we find that the real exchange rate is cointegrated with terms of trade variables and that causality runs from the terms of trade to the exchange rate we then construct a simple exchange rate equation that satisfies several specification tests and performs better than a random walk in post sample forecasting experiments the results suggest that much of the variation in the real exchange rate is attributable to movements in the terms of trade and that the influence of monetary factors is secondary

cross country differences in the effects of oil shocks abstract we compare the macroeconomic consequences of several types of oil shocks across a set of industrialized countries that are structurally very diverse with respect to the role of oil and other forms of energy in the economy the results crucially depend on the underlying source of the oil price shift when a rise in oil prices is caused by increased global economic activity or a rise in oil specific demand almost all countries experience respectively a temporary increase and transitory decline of real gdp the role of oil and other forms of energy cannot explain the differences in the effects of both shocks across countries in contrast this role is very important to explain asymmetries in the effects of exogenous oil supply shocks whereas net oil and energy importing countries typically face a permanent fall in economic activity the impact is insignificant or even positive in net energy exporting countries in addition countries that improved their net energy position the most over time became less vulnerable to oil supply shocks relative to other countries

spending on alcohol evidence from the family expenditure survey 1970 1983 this paper reports on the investigation of a model of the determination of the share of household expenditure on alcohol using fes data for the united kingdom 1970 83 i e a time series of cross sections the authors pay special attention to the occurrence of zero expenditure variations in characteristics across the population and the modeling and interpretation of the stochastic term this term is modeled using the gamma distribution replacing the normal in tobit estimated parameters indicate strong positive skewness interactions between household characteristics and expenditure propensities are important copyright 1990 by royal economic society

latent consideration sets and continuous demand systems this paper develops a theoretically consistent continuous demand system model that incorporates latent probabilistic consideration sets in contrast to existing discrete choice consideration models the proposed model is econometrically tractable with consumption data for many goods the model s empirical properties are illustrated with an 89 site recreation data set from the 1994 national survey of recreation and the environment nsre parameter and welfare estimates suggest that the latent consideration set models fit the data better and may imply a bias variance tradeoff relative to traditional models

oil price drivers geopolitical uncertainty and oil exporters currencies abstract empirical relationships between crude oil prices and exchange rates of oil exporting countries tend to vary over time i use econometric models of the norwegian and canadian nominal exchange rates to investigate whether such time variation could reflect shifts in the key drivers of oil prices over time results suggest that demand and supply driven oil price increases strengthen these currencies to different extents in contrast heightened geopolitical uncertainty and associated oil price increases go together with a weakening of oil exporters currencies the latter result may explain coincidences of higher oil prices and a weakening of oil exporters currencies

trade linkages and macroeconomic effects of the price of oil in this paper we assess the impact of oil price shocks on oil producer and oil consuming economies var models for different countries are linked together via a trade matrix as in abeysinghe 2001 as expected we find that oil producers here russia and canada benefit from oil price shocks for example a large oil shock leading to a price increase of 50 boosts russian gdp by about 6 however oil producers are hurt by indirect effects of positive oil price shocks as economic activity in their exporter countries suffers for oil consumers the effects are more diverse in some countries output falls in response to an oil price shock while other countries seem to be relatively immune to oil price changes finally indirect effects are also detected for oil consumer countries those countries which trade more with oil producers gain indirect benefits via higher demand from oil producing countries in general the largest negative total effects from positive oil price shocks are found for japan china the usa finland and switzerland while other countries in our sample seem to have fared quite well during recent positive oil price shocks the indirect effects are negative for russia finland germany and netherlands

selection effects and heterogeneous demand responses to the berkeley soda tax vote early evidence from household level surveys suggests that the one cent per ounce tax on sugar sweetened beverages that took effect on march 1 2015 in berkeley california has decreased consumption of sugar sweetened beverages dramatically even if these findings are robust the public policy implications of expanding the berkeley soda tax policy to a national level are complicated by selection effects inherent in the populations of both voters and consumers we find that consumption responses related to the tax interact nontrivially with consumer heterogeneity some of these responses directly counter the public policy goals of a soda tax for example high consuming households are less price sensitive and therefore less responsive to price changes following a tax further reactance among high consuming populations led to increases in soda consumption immediately following the passage of the tax partially mitigating reductions in soda consumption

studying household purchasing and nonpurchasing behaviour for a frequently consumed commodity two models a panel data double hurdle model is developed to analyse household purchasing behaviour the model a time series extension of cragg s conventional double hurdle model of censored consumption is able to account not only for the censored nature of commodity purchases but also for the temporal linkage of the purchase process the panel data double hurdle model is compared with the marked renewal model that has also been used for studying household purchasing behaviour the empirical results of the double hurdle model show that for household milk purchases hurdle due to noneconomic reasons exists the results of the marked purchase renewal model showed that the duration dependence is positive both models fit the data well the views presented in this paper are those of the authors and not necessarily those of usda ers

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

intertemporal substitution and storable products storable products allow consumers to time their purchases to exploit price fluctuations it has been documented that during promotions consumers buy more the additional purchases are potentially intended not only for current use but to be stockpiled for future consumption this paper discusses the predictions of a consumer inventory model and reviews the available evidence we then discuss the implications for demand estimation and present estimates of jel lo l4 dl d4 the economic magnitude of the dynamic effect of storability jel lo l4 dl d4 jel lo l4 dl d4

distinguishing between market participation and infrequency of purchase models of butter demand household butter expenditures are modeled by market participation and infrequency of purchase specifications the market participation model assumes that zero expenditures represent either traditional corner solutions or consumers who never use the product whereas the infrequency of purchase model assumes that zero expenditures represent either corner solutions or consumption out of storage we determine that the infrequency of purchase specification is preferred to the market participation model by applying a nonnested test based upon likelihood functions if household expenditure surveys contained information about participation and frequency of purchase a likelihood function which contained both models could be written and estimated

time varying dynamics of the norwegian economy we use tvp var models to investigate possible changes in the time series properties of key norwegian macroeconomic variables since the 1980s notably we find that inflation persistence falls during the inflation targeting period while the volatility of inflation and nominal exchange rates increases observed time variation in correlations between interest rates and the macro variables largely reflect prevailing monetary policy regimes an increase in the correlations between oil prices and other macro variables over time is also documented a counterfactual analysis discusses the observed time varying dynamics of the norwegian economy in the light of monetary policy and oil price shocks this article is protected by copyright all rights reserved

the saving collapse during the transition in eastern europe almost all of the transition economies in eastern europe and the former soviet union experienced a severe decline in their national saving rates the saving collapse could be explained by the elimination of involuntary saving a feature of central planning or by a change in equilibrium saving reflecting the new economic circumstances following the end of socialism the predicted saving rates of market economies with the same fundamentals as the transition economies before the transition are computed to test for the presence of involuntary saving the results provide some support for the hypothesis of consumption smoothing also considered is whether differences m the extent of liberalization affected saving rates in the cross section of transition economies this is found to be the case greater liberalization is association with lower saving with a one year lag to the extent that liberalization is associated with future growth this finding is consistent with smoothing m the face of output evolving along j curve

consumer shopping behavior how much do consumers save this paper documents the potential and actual savings that consumers realize from four particular types of purchasing behavior purchasing on sale buying in bulk at a lower per unit price buying generic brands and choosing outlets how much can and do households save through each of these behaviors how do these patterns vary with consumer demographics we use data collected by a marketing firm on all food purchases brought into the home for a large nationally representative sample of u k households in 2006 we are interested in how consumer choice affects the measurement of price changes in particular a standard price index based on a fixed basket of goods will overstate the rise in the true cost of living because it does not properly consider sales and bulk purchasing according to our measures the extent of this bias might be of the same or even greater magnitude than the better known substitution and outlet biases

investment choice and asset allocation of italian households the discrete continuous approach financial and monetary policies are considered to be effective depending on the reaction of financial markets which are increasingly populated by households in this article from intertemporal settings i derive a financial almost ideal fai demand system and i estimate it by highlighting the determinants of both limited participation to financial markets and asset substitutability complementarity in the allocating stage finally the wealth elasticities provide some further insights on the low diffusion of the newer and more complex financial instruments across italian households

oil prices and exchange rates the quotations show a sharply divergent pattern in the response of the foreign exchange market to announcements of oil price increases during the first oil shock news about oil price rises led to a strengthening of the dollar whereas during the i979 surge of oil prices the reverse was generally true when the news was not so bad as feared the dollar fell back in i974 but rose in i979 in 1980 the pattern shifted once again back to dollar appreciation is there a rational fundamental explanation for the behaviour of the foreign exchange market or is it a matter of traders responding to what other traders arbitrarily think it is difficult to resolve this question but some insight can be provided through an analytical examination of the relationship between oil price increases and exchange rates the paper begins with a theoretical framework for analysing the relation between oil prices and exchange rates and then uses the theory to explain the behaviour of the foreign exchange market

sales and consumer inventory temporary price reductions sales are common for many goods and naturally result in a large increase in the quantity sold we explore whether the data support the hypothesis that these increases are at least partly due to demand anticipation at low prices consumers store for future consumption this effect if present has broad economic implications we test the predictions of an inventory model using scanner data with two years of household purchases the results are consistent with an inventory model and suggest that static demand estimates may overestimate price sensitivity

joint purchasing decisions a multivariate negative binomial approach the analysis of household purchasing decisions for understanding consumption behaviour has received much attention recently mainly because of the measurement error problems that appear when using expenditure data to approximate consumption this paper discusses some empirical regularities of the household purchasing behaviour based on information about the number of purchases a household has declared having done during the survey period the concern of this paper is two fold first to show how to recover purchase frequency data from the spanish budget survey 1990 1991 second to discuss some empirical regularities of the joint purchasing decisions based on multivariate negative binomial models

why are latin america s savings rates so low an international comparative analysis abstract this paper presents a theoretical and empirical assessment of the determinants of savings rates with special emphasis on latin american savings rates the study is based on international comparisons using data from 36 countries for 1970 1992 a distinction is made between private and public savings the later are endogenously determined by economic and political variables per capita income growth is the most important determinant of private and public savings public savings are lower in countries with higher political instability public savings crowd out private savings but less than proportionately low latin american savings are due to the magnitudes of their determinants rather than structural differences

econometric analysis of the short run fluctuations of households purchases infrequency of purchase models are alternatives to those derived from the classical utility maximization with binding nonnegativity constraints scheme for modeling purchases that occur at random dates an extension of those models is proposed that takes into account additional information about the exact number of times households purchased during the survey period various methods of estimation are described and an empirical illustration is presented with data drawn from the french food expenditure survey insee copyright 1993 by the review of economic studies limited

what drives private saving around the world the authors investigate the policy and non policy factors behind saving disparities using a large panel data set and an encompassing approach including several relevant determinants of private saving they extend the literature in several dimensions by 1 using the largest data set on aggregate saving assembled to date 2 using panel instrumental variable techniques to correct for endogeneity and heterogeneity 3 performing robustness checks on changes in estimation procedures data samples and model specification their main empirical findings a private saving rates show considerable inertia are highly serially correlated even after controlling for other relevant factors b private sector rates rise with the level and growth rate of real per capita income so policies that spur development are in indirect but effective way to raise private saving rates c predictions of the life cycle hypothesis are supported in that dependency ratios generally have a negative effect on private saving rates d the precautionary motive for saving is supported by the finding that inflation conventionally taken as a summary measure of macroeconomic volatility has a positive impact on private saving holding other facts constant e fiscal policy is a moderately effective tool for raising national saving f the direct effect of financial liberalization are largely detrimental to private saving rates greater availability of credit reduces the private saving rate financial depth and higher real interest rates do not increase saving