the arithmetic of investment expenses recent regulatory changes have brought a renewed focus on the impact of investment expenses on investors financial well being the author offers methods for calculating relative terminal wealth levels for those investing in funds with different expense ratios under plausible conditions a person saving for retirement who chooses low cost investments could have a standard of living throughout retirement more than 20 higher than that of a comparable investor in high cost investments

household demand in rural china a two stage les aids model a complete demand system of chinese rural households is estimated using a two stage les aids model and pooled provincial and time series data from 1982 to 1990 for commodity groups food clothing fuel housing and other commodities demand is price inelastic housing and other commodities are luxury goods while clothing and food are necessities within the food group price elasticities range from 0 005 to 0 63 expenditure elasticities are lower for grains and higher for meat tobacco and alcohol the results imply a gap between food demand and supply growth therefore china will face pressure to import food

population dynamics and consumer demand the authors analyze the effects on consumption in the united states of 11 demographic variables including regional location and the urban rural base of the household its age size race sex and marital characteristics and the education and the employment status of the household head and the spouse data are from the 1972 1973 consumer expenditure survey the expenditure functions are first specified followed by descriptions of the data sources and the empirical estimates of expenditure functions for various items of consumption spending excerpt

pricing of electricity tariffs in competitive markets in many countries electricity supply business has been opened for competition in this paper we analyze the problem of pricing of electricity tariffs in these open markets when both the customers electricity consumption and the market price are stochastic processes specifically we focus on regular tariff contracts which do not have explicit amounts of consumption units defined in the contracts therefore the valuation process of these contracts differs from the valuation of electricity futures and options the results show that the more there is uncertainty about the customer s consumption the higher the fixed charge of the tariff contract should be finally we analyze the indication of our results to the different methods for estimating the customer s consumption in the competitive markets since the consumption uncertainties enter into the tariff prices the analysis indicates that the deterministic standard load curves do not provide efficient methods for evaluating the customers consumption in competitive markets

quasi and simulated likelihood approaches to censored demand systems food consumption by food stamp recipients in the united states a quasi maximum likelihood estimator is proposed and applied to a censored translog demand system for foods using a sample of food stamp recipients in the united states the procedure produces remarkably close parameter and elasticity estimates to those of the simulated maximum likelihood procedure a two step procedure is also considered but it produces different elasticities demands are found to be price elastic for pork and fish but price inelastic for all other food products gross complementarity and net substitutability are obvious but these cross price effects are much less pronounced than own price and total food expenditure effects copyright 2003 oxford university press

agroindustrialization globalization and international development an overview of issues patterns and determinants this paper offers an overview for a special issue on agroindustrialization globalization and international development it sets out a conceptual framework for understanding the links among these three broad phenomena and then discusses emerging issues and evidence concerning the factors conditioning agroindustrialization in developing countries and the subsequent effects on employment poverty and the natural environment we conclude with a research agenda

risk market sensitivity and diversification much can be learned about the risk character of a portfolio by measuring its market sensitivity and diversification the author explains the meaning of these two key measures and shows how to calculate their values using corresponding measures for the individual securities in the portfolio

a generalization of working s model abstract working s 1943 model states that budget shares are linear functions of the logarithm of income it implies constant differences between corresponding marginal and budget shares a one parameter generalization is proposed which allows each marginal share to be a linear function of the corresponding budget share this model can be further extended with one extra parameter so that all goods are either specific substitutes or specific complements

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

a micro analysis of business travel demand this study tests two hypothesis 1 that tax deductibility and the dual benefit nature of goods on the business pleasure borderline increases the demand for business travel and 2 that this dual benefit decreases price elasticity the study uses expenditure microdata and contrasts the behaviour of business travellers and pleasure travellers both groups are assumed to have indentical tastes but the expenditure behaviour of business travellers is modified by the role of the business trip as a factor of production the linear expenditure system les allocation model is applied to expenditures on individual goods at a particular tourist destination business travellers are shown to have higher expenditures than pleasure travellers for food lodging and local transportation minimum quantities estimated by the les are also higher for business travellers uncompensated price elasticities of business travellers are significantly smaller than that of pleasure travellers for local transportation clothing a

an exogeneity test for a simultaneous equation tobit model with an application to labor supply a test of weak exogeneity in the simultaneous equation tobit model is proposed and illustrated using a female labour supply model estimated using cross section data the test statistic can be simply output from any standard tobit maximum likelihood package and is asymptotically efficient the procedure provides consistent estimators for the simultaneous tobit model whose asymptotic covariance matrix is a simple extension of the usual tobit formula we also provide the lagrange multiplier test of weak exogeneity this abstract was borrowed from another version of this item

aggregate consumer behaviour and the measurement of inequality this paper presents an approach to inequality measurement based on an econometric model of aggregate consumer behaviour the novel feature of this model is that systems of individual demand functions can be recovered uniquely from the system of aggregate demand functions we present methods for evaluating social welfare based on an explicit social welfare function this social welfare function incorporates measures of individual welfare based on indirect utility functions for all consumer units we develop indexes of inequality based on actual and potential levels of social welfare

an empirical assessment of endogeneity issues in demand analysis for differentiated products this article explores the issue of price and expenditure endogeneity in empirical demand analysis the analysis focuses on the u s carbonated soft drink market we test the null hypothesis that price and expenditures are exogenous in the demand for carbonated soft drinks using an almost ideal demand system aids specification we strongly reject exogeneity for both prices and expenditures we find that accounting for price expenditures endogeneity significantly impacts demand elasticity estimates we also evaluate the implications of endogeneity issues for testing weak separability over the last few decades strong linkages between economic theory and econometric methods have stimulated much empirical analysis of consumer behavior e g deaton and muellbauer 1980b the basic approach involves estimating marshallian demand functions expressing quantities consumed as functions of prices and household expenditures the usual practice is to treat prices and expenditure as exogenous variables in this article we question the validity of these exogeneity assumptions especially when focusing on the demand for differentiated products 1 this is particularly important to the extent that food consumption typically involves differentiated products in market economies we also examine the interactions between endogeneity of prices expenditure in demand systems and the testing for weak separability of consumer preferences

expected utility asset allocation most asset allocation analyses use the mean variance approach for analyzing the trade off between risk and expected return analysts use quadratic programming to find optimal asset mixes and the characteristics of the capital asset pricing model to determine reasonable optimization inputs this article presents an alternative approach in which the goal of asset allocation is to maximize expected utility where the utility function may be more complex than that associated with mean variance analysis inputs for the analysis are based on the assumption of asset prices that would prevail if there were a single representative investor who desired to maximize expected utility

real time pricing when some consumers resist in saving electricity successful real time electricity pricing depends firstly upon consumers willingness to subscribe to such terms and secondly on their ability to curb consumption levels the present paper addresses both issues by considering consumers differentiated by their electricity saving costs half of whom resist saving electricity we demonstrate that when consumers are free to adopt real time prices producers prefer charging inefficient prices and in so doing discriminate against that portion of the consumer population which faces no saving costs we also find that efficient marginal cost pricing is feasible but is incompatible with mass adoption of real time prices

an emprical model of the demand for a varied diet this study attempts to measure some aspects of the household s demand for a varied die by invesigaing how he number of individual foods consumed b he household is affeced b is preferences and food expendiure a heoriical model suggesed b household production theory is adopted to empirical data from a cross section of households it is found that the number of individual foods consumed is strongly responsive to househjold expenditure on all foods

ethical differentiation and market behavior an experimental approach abstract does ethical differentiation of products affect market behavior we examined this issue in triopolistic experimental markets where producers set prices one producer s costs were higher than the others in two treatments the additional costs were attributed to compliance with ethical guidelines in the third no justification was provided many consumers reduced their experimental gains by purchasing the ethically differentiated products at higher prices individual differences were important business economics students paid smaller premia finally we speculate about the observed demand function for ethics and emphasize using experimental methodology to complement empirical studies in assessing markets for ethically differentiated products

past present and future financial thinking at the 67th cfa institute annual conference held 4 7 may 2014 in seattle robert litterman interviewed william f sharpe to elicit his perspective on a number of investment issues including the capital asset pricing model asset allocation behavioral finance and retirement income

on using linear regressions in welfare economics this article consists of two parts the first part shows that the ordinary least squares regression coefficient is a weighted average of slopes between adjacent sample points when applied to a linear regression with income as the independent variable the regression coefficient depends heavily on the slopes of high income groups the weight of the highest income decile may well exceed that of the other nine deciles this may be undesirable especially if the regression is used for welfare analysis because the marginal propensities to consume attributed to the commodities are determined by the high income groups the second part of the article proposes alternative estimators the extended gini estimators that enable investigators to control the weighting scheme and to incorporate their social views into the weighting scheme of the estimators

modelling demand systems with demographic effects based on the modifying function approach abstract we follow review of economic studies 52 1985 1 approach to modify the standard consumer demand theory so that socio demographic variables can be formally incorporated into the demand systems our modified theory not only includes all previous approaches to this problem as special cases but also allows the useful interpretations of household production and subsistence expenditure

the efficiency of demand oriented housing programs generalizing from experimental findings typical production oriented housing programs offer potential recipients a highly limited set of previously unattainable commodity bundles from the household s viewpoint such programs have been highly inefficient from society s viewpoint such housing programs are generally horizontally inequitable and inefficient given that housing programs are not likely to be fully cashed out and incorporated into general income maintenance could housing programs be restructured to increase their efficiency this paper examines this question results indicate that demand oriented housing programs are substantially more efficient than are production oriented programs in fact in the aggregate the former programs approach unrestricted cash payments in their transfer efficiency

the welfare effects of disarmament on the united states under nato and the warsaw pact this paper develops a model of disarmament by incorporating rationing theory into the economic theory of alliance in order to provide an econometric measure of welfare gain from a disarmament treaty the author employs the cost functions predicated on rationed and unrationed demand systems by combining the economic theory of foreign aid with that of alliance the author examines the impact of disarmament on the developed economies foreign aid to developing countries as a peace dividend the model is applied to the case of the u s economy under mutual disarmament between nato and the warsaw pact copyright 1996 by mit press

optional time of use prices for electricity econometric analysis of surplus and pareto impacts we estimate a model of time of use tou consumption and choice among optional tou tariffs in which the customer s choice among tariffs is based on its demand parameters which vary in the population we simulate the impact on consumption consumer surplus and profit of several optional tou rates that were offered experimentally in northern california the analysis suggests that with one possible exception the offering of these optional rates did not constitute a pareto improvement however total surplus excluding measurement costs is estimated to have risen by 1 41 to 2 55 per month per customer who chose the tou rates

recovering individual preferences for non market goods a collective travel cost model traditional recreation demand models do not make a distinction between a household and an individual as the reference decision making unit thus assuming that a family maximizes a single utility function even if the family consists of different individuals such models ignore the possibility of family members divergent preferences for non market goods this study proposes a novel approach the collective travel cost model ctcm to eliciting individual preferences for a non market good such as a recreation site by using revealed preference data this approach accounts for the intra household resource allocation and the role of each household member s preferences we show that the collective travel cost model can be applied to estimating a recreation demand model that yields individual welfare estimates appropriate for policy analysis of non market goods such as the willingness to pay to access a recreation site we find that how resources are distributed within the household reflects significant differences in welfare measures

consumer demand for fair trade evidence from a multistore field experiment abstract we provide new evidence on consumer demand for ethical products from experiments conducted in a u s grocery store chain we find that sales of the two most popular coffees rose by almost 10 when they carried a fair trade label as compared to a generic placebo label demand for the higher priced coffee remained steady when its price was raised by 8 but demand for the lower priced coffee was elastic a 9 price increase led to a 30 decline in sales while consumers attach value to ethical sourcing there is significant heterogeneity in willingness to pay for it

are stated preferences confirmed by purchasing behaviours the case of fair trade certified bananas in switzerland as the market share of fair trade food products in countries of the north grows understanding consumer preferences with regard to this recent label is becoming increasingly important this article reports on a test of the consistency of consumers stated preferences for which a survey was conducted at the place and time of actual purchase decisions the aim of the survey was to further improve the understanding of consumers stated motivations for buying fair trade and organic fair trade bananas in switzerland hypothetical questions with double dichotomous choices were used to compare two types of bananas conventional and labelled and to assess the average stated willingness to pay wtp for fair trade labelled bananas the results show that fair trade is largely accepted in switzerland and that the premium for purchasing such products is influenced by age the number of young children and the perception of the fair trade label i then used a comparative test of field observations and stated preferences for bananas to measure inconsistency in choices this comparison reveals that less than one fifth of the answers are in principle inconsistent these results point to the importance of confidence in the fair trade labels if consumers purchases are to increase

does local labeling complement or compete with other sustainable labels a conjoint analysis of direct and joint values for fresh produce claim as a way to explore the increasing use of sustainability labels in the marketplace this study analyzes the differential values and interactive effects of sustainable production claims organic fair trade and carbon footprint and location claims through a conjoint choice experiment included in a 2008 u s survey locally grown is the highest valued claim and its value is further enhanced with fair trade certification but carbon intensive local products are discounted more severely than those sourced from other locations some negatively valued claims imports and carbon footprint can be mitigated by combining them with other claims organic and fair trade copyright 2011 oxford university press

a cross country tabulation of own price elasticities of demand abstract this paper tabulates frisch slutsky and cournot own price elasticities for each of 10 goods at the per capita real income levels of 30 countries ranging from india to the united states

do ethical values work a quantitative study of the impact of fair trade coffee on consumer behavior this study investigates the large french fair trade ft market and the importance of ft coffee within it in an attempt to identify some general features of ft consumers on the basis of 7 587 transactions the authors also determine the impact of ft characteristics on customer behavior the main result is somewhat surprising ft coffee purchases seem to involve a temporary commitment as ft coffee consumers appear less loyal than traditional coffee consumers the authors derive some business and academic implications

fiscal and spending behavior of local governments identification of price effects when prices are not observed this paper analyzes local public fiscal andspending behavior in a setting where localgovernments represented by the dominantparty or coalition are treated as utilitymaximizing agents the econometricanalysis which is based on a modifiedversion of eles recognizes total spendingas well as total income as endogenousvariables identification of the priceeffects is achieved by utilizing data onenvironmental cost factors and localtastes the performance of the estimatedmodel is investigated by testing itsability to make out of sample predictionsof local government behavior

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

optimal tariff design under consumer self selection abstract this paper considers the design of electricity tariffs to guide an individual consumer to select the tariff designed for his her consumption pattern in our model the utility maximizes the weighted sum of individual consumers benefits of electricity consumption subject to the utility s revenue requirement constraints the consumers free choice of tariffs is ensured with the so called self selection constraints we analyze the relationship between the consumers optimal choice of tariffs and the weights in the aggregated consumers benefit function if such weights exist then they will guarantee the consumers optimal choice of tariffs and the efficient consumption patterns we also analyze the welfare effects by using demand parameters estimated from a finnish dynamic pricing experiment the results indicate that it is possible to design an efficient tariff menu with the welfare losses caused by the self selection constraints being small compared with the costs created when some consumers choose tariffs other than those assigned for them

green recovery policies for the covid 19 crisis modelling the impact on the economy and greenhouse gas emissions the covid 19 pandemic induces the worst economic downturn since the second world war requiring governments to design large scale recovery plans to overcome this crisis this paper quantitatively assesses the potential of government investments in eco friendly construction projects to boost the economy and simultaneously realise environmental gains through reduced energy consumption and related greenhouse gas emissions the analysis uses a computable general equilibrium model that examines the macroeconomic impact of the covid 19 crisis in a small open economy belgium subsequently the impact of the proposed policy is assessed through comparative analysis for macroeconomic parameters as well as co2 equivalent emissions for four scenarios our findings demonstrate that the covid 19 pandemic damages economies considerably however the reduction in emissions is less than proportionate still well designed public policies can reverse this trend achieving both economic growth and a disproportionally large decrease in emissions moreover the positive effect of such a decoupling policy on gdp is even stronger during the pandemic than compared to the pre covid 19 period this is the result of a targeted investment induced green transition towards low energy intensive economic activities finally this paper describes how the net effect on the government budget is positive through the indirect gains of the economic uptake

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

quality signaling through certification in developing countries this paper studies how signaling the credence attributes of consumer goods distorts their market equilibrium in developing countries costs of certification sunk in order to achieve credibility play a key role in producing an oligopolistic market leading to high prices that form a barrier for consumers in the south to lower the cost certification is better achieved by a single independent body which can be financed either by end consumers through a fee or by public subsidies the paper identifies the conditions under which each funding mechanism is most efficient taking into account the government s budget constraint the theoretical analysis is motivated with reference to agricultural seed certification

determinants of food consumption in rural sierra leone abstract this paper reports the application of a quadratic expenditure system with demographic variables to the household consumption leisure choice component of a household firm model a system of seven commodities is estimated including five foods non food and leisure appropriate for such a level of disaggregation a demand system is used the quadratic expenditure system which allows for a flexible relationship between full income and commodity expenditures without sacrificing parsimony in parameters demographic data on households are explicitly incorporated into the model allowing for a richer specification than can be achieved by using per capita variables the data are from a cross section survey of households in rural sierra leone price variation exists by region permitting estimation of a complete demand system engel curves are found to be significantly non linear with marginal expenditure on rice the major staple declining with higher income most foods are found to be reasonably price responsive with sizeable own price substitution effects declining with higher income aggregate labor supply is found to be price inelastic

household labour supply with rationing in spain this paper provides new empirical evidence on household labour supply with rationing to that end we use the latest spanish data in order to estimate three flexible functional forms namely the nles the quadratic and the hausman ruud forms and calculate the income and wage elasticities we find that the number of dependants has a negative effect on the labour supply of the female moreover the north and the east spanish regions have a clearly positive effect on the labour supply of the female whilst the north has the same effect on that of the male the elasticities of three functional forms are very similar male labour supply is slightly decreasing with the wage whilst for the female it is increasing leisure is a normal good for both spouses as expected whilst the labour hours are net substitutes

price and income elasticities of residential energy demand in germany we apply a quadratic expenditure system to estimate price and expenditure elasticities of residential energy demand electricity and heating in germany using official expenditure data from 1993 to 2008 we estimate an expenditure elasticity for electricity of 0 3988 and of 0 4055 for space heating the own price elasticity for electricity is 0 4310 and 0 5008 in the case of space heating disaggregation of households by expenditure and demographic composition reveals that the behavioural response to energy price changes is weaker stronger for low income top income households there are considerable economies of scale in residential energy use but scale effects are not well approximated by the new oedc equivalence scale real increases in energy prices show a regressive pattern of incidence implying that the welfare consequences of direct energy taxation are larger for low income households the application of zero elasticities in assessments of welfare consequences of energy taxation strongly underestimates potential welfare effects the increase in inequality is 22 smaller when compared to the application of rich and disaggregated behavioural response patterns as estimated in this paper

an adjustment scheme for nonlinear pricing problem with two buyers we examine a contracting problem with asymmetric information in a monopoly pricing setting traditionally the problem is modeled as a one period bayesian game where the incomplete information about the buyers preferences is handled with some subjective probability distribution here we suggest an iterative online method to solve the problem we show that when the buyers behave myopically the seller can learn the optimal tariff by selling the product repeatedly in a practical modification of the method the seller offers linear tariffs and adjusts them until optimality is reached the adjustment can be seen as gradient adjustment and it can be done with limited information and so that it benefits both the seller and the buyers our method uses special features of the problem and it is easily implementable

a survey of the economics of fair trade fair trade has spread in developing countries as an initiative aimed at lifting poor smallholder farmers out of poverty by providing them with premium prices availability of credit and improved community development and social goods fair trade is also viewed as a niche market for high value products in a context of globalization and trade liberalization policies that affect smallholder farmers in developing countries the question of whether fair trade affects the welfare of rural farmers however is particularly contentious this paper provides a review of the fair trade literature both theoretical and empirical with a specific focus on the analysis of small scale producer s welfare in developing countries our review shows that while most empirical papers have focused on the impacts of fair trade on prices and income our review highlights the importance of limited market access and changes in productivity likewise little is known about the impacts of fair trade on labor markets and human capital investments persistent methodological challenges make it challenging however to assess the causal impact of this certification and labelling initiative

a complete solution to a class of principal agent problems with an application to the control of a self managed firm this paper considers a class of principal agent problems which have the following features 1 there is adverse selection because the principal ignores the value of one parameter of the agent s true characteristics 2 leaving aside the information parameter the principal s welfare as well as the agent s welfare depend on two types of variables observable to both of them the first ones possibly multidimensional are called action variable s and the second one which is one dimensional has in general the meaning of a money transfer 3 the principal is a stackelberg leader of the two person game he can commit himself to decision rules which are admissible on informational grounds he optimizes within the adequate class taking into account besides the agent s reaction one constraint which has generally the meaning of an individual rationality constraint and sometimes of a feasibility constraint the optimization is limited to the class of non stochastic mechanisms 4 the problem can also receive an alternative interpretation the principal faces a continuum of agents of unknown characteristics the distribution being known however stylized principal agent problems of this type have often been considered in the economic literature in particular the reader will later be able to recognize that the standard income tax model a la mirrlees 1971 the quality or quantity choice model of the monopolist a la mussa and rosen 1978 or maskin and riley 1982 and the model of government regulation of the private monopolist of baron and myerson 1982 all belong to

the effects of price aggregation bias in systems of demand equations this article illustrates the importance of maintaining consistent levels of aggregation between prices and quantities when estimating consumer demand functions the impact of violating this condition is quantified by using summary performance measures and estimates of demand elasticity biases results derived from an application of 1972 1973 consumer expenditure survey data and supported with a quasi monte carlo experiment consistently indicate that the point estimates of demand elasticities are significantly biased thus the study indicates the importance of developing and maintaining price indexes disaggregated to the same level as the expenditure data in consumer expenditure and budget surveys

fair trade and free entry can a disequilibrium market serve as a development tool abstract the fair trade ft coffee initiative attempts to channel charity from consumers to poor producers via increased prices we show that the rules of the ft system permit this rent to be eliminated due to free entry and costly excess certification of output using data from an association of coffee cooperatives in central america we verify that expected producer benefits are close to 0 when we take into account the output that is certified but not sold as ft our results illustrate how free entry undermines the attempt at extending charity via a price distortion in an otherwise competitive market

disentangling the effects of fair trade on the quality of malian cotton the increasing importance of premium segments and private labels raise skepticism about the ability of fair trade to help smallholders compete in high value added markets using panel data collected in mali this paper contributes to the debate by estimating the impact of fairtrade certification on the quality of malian cotton controlling for the nonrandom certification of producers results show a significant impact on the quality of cotton produced by both certified and geographically close noncertified growers via spillover effects the analysis suggests that contract farming enforced by third parties and demonstration effects foster the adoption of innovative agricultural practices

mainstreaming fair trade coffee from partnership to traceability summary this article analyzes the recent growth of fair trade and the mainstreaming of this previously alternative arena focusing on coffee i identify a continuum of buyers ranging from mission driven enterprises that uphold alternative ideas and practices based on social ecological and place based commitments to quality driven firms that selectively foster fair trade conventions to ensure reliable supplies of excellent coffee to market driven corporations that largely pursue commercial industrial conventions rooted in price competition and product regulation using a commodity network approach my analysis illuminates the impacts of diverse buyer relations on producer groups and how relations are in some cases shifting from partnership to traceability

sustainability standards gender and nutrition among smallholder farmers in uganda abstractsustainability standards are gaining in importance in global markets for high value foods while previous research has shown that participating farmers in developing countries may benefit through income gains nutrition impacts have hardly been analysed we use survey data from smallholder coffee farmers in uganda certified under fairtrade organic and utz to analyse impacts on food security and dietary quality estimates of instrumental variable models and simultaneous equation systems show that certification increases calorie and micronutrient consumption mainly through higher incomes and improved gender equity in certified households women have greater control of coffee production and monetary revenues from sales

pareto optimal electricity tariff rates in the republic of armenia abstract the economic impact of electricity tariff rates on the residential sector of yerevan armenia is examined the effect of tariff design on revenue generation and equity measures is considered and the combination of energy pricing and compensatory social policies which provides the best mix of efficiency and protection for poor households is examined an equity measure is defined in terms of a cumulative distribution function which describes the percent of the population that spends x or less of their income on electricity consumption an optimal pareto efficient tariff is designed based on the analysis of survey data and an econometric model and the armenian tariff rate effective 1 january 1997 to 15 september 1997 is shown to be non optimal relative to this rate

do fair trade and eco labels in coffee wake up the consumer conscience abstract in this study a face to face survey was conducted in order to reveal consumer preferences for ethical and environmentally sound labeling programs in coffee valuation questions regarding the fair trade shade grown and organic coffee labels were asked using a payment card format after consumers were previously informed about each of the labeling programs results suggest that consumers are very receptive toward both fair trade and shade grown coffee labels and consequently are willing to pay higher premiums for these labeling programs than for the organic coffee

adaptive asset allocation policies this article proposes an asset allocation policy that adapts to market movements by taking into account changes in the outstanding market values of major asset classes such a policy considers important information reduces or avoids contrarian behavior and can be followed by a majority of investors

horizontal equity income taxation and self selection with an application to income tax credits abstract this paper investigates the relationship between utilitarianism and horizontal equity in models of income taxation in particular and self selection in general an example involving well behaved individual preferences is constructed in which a maximization of a utilitarian social welfare function leads via income taxation to horizontal inequities sufficient conditions for utilitarianism to bring horizontal equity are derived the results are applied to the question of whether income tax credits are an appropriate way to treat differences in family size

is there curvature in the slutsky matrix d o the poor substitute among commodities more flexibly than the rich when relative prices change even when compensated for the income effects of the price changes is it necessary to add a third dimension to the slutsky substitution matrix to identify household income in short do the terms of the slutsky elasticity matrix curve smoothly from poor households to rich households in such a way that equation 1 is meaningful

milk by any other name consumer benefits from labeled milk this article uses revealed preferences of consumers to study the consumer benefits from rbst free and organic labeled milk the article specifies and estimates a quadratic aids demand system model for different milk types using u s supermarket scanner data the introduction of rbst free and organic milk is used to estimate consumer benefits that are decomposed into two components competitive and variety effects results show significant consumer benefits from organic milk and to a lesser extent from rbst free milk based on the findings we explore implications for present u s labeling standards th eu s food sector is going through rapid transformations in terms of new product introduction and innovations organic and genetically modified gm food products are leading the way in changing the landscape of available choices to consumers this rapid expansion of product space has taken place concomitantly with an increase in public policy concerns on issues of standardization labeling health risks and associated consumer welfare in this paper we explore these broader issues in the context of a specific product introduction the introduction of recombinant bovine somatotropin rbst free and organic milk in the u s market from a policy perspective understanding the market for organics and the various components of that demand i e what portion is for gm free and what is for other attributes of organics can help determine the value of creating a national standard and the potential welfare losses to consumers of weakening such a standard are consumers willing to pay extra for organic and rbst free milk if so how

engel curves for fair trade consumption and development perspectives for producers evidence from data on real fairtrade purchases while fairtrade sales have exhibited two digit growth rates over recent decades their capacity to become large enough to generate substantial gains for producers is still uncertain estimating fai

local governments in kind transfers and economic inequality abstract we examine how in kind transfers provided by local governments affect economic inequality the allocation of in kind transfers to households and the adjustment for differences in needs are derived from a model of local government spending behavior the model distinguishes between fixed and variable costs in production as well as mandatory programmatic spending components versus discretionary spending on different service sectors and target groups to estimate the model we combine norwegian data from municipal accounts and administrative registers for the period 1982 2013 we find that economic inequality is considerably lower when taking in kind transfers into account while the poor benefit from receiving a relatively large share of public services the equalizing effect of in kind transfers tends to be smaller than the equalizing contribution from public cash transfers when examining the time trends in inequality we find that local governments attenuated the growth in cash income inequality by re allocating in kind transfers to low income families this reduction in inequality is mostly due to changes in spending priorities across service sectors and target groups while the contribution from re allocation of resources across municipalities is much smaller

the household s decision to accept or reject a conditional transfer offer households deemed by society to have insufficient resources to purchase an adequate commodity bundle are often offered aid i e additional resources conditional upon the households purchasing a given level of some commodity e g food fuel or housing such conditional transfers attempt to modify the households normal behavior i e if the households would normally purchase the required level of the designated commodity upon receipt of the transfer the constraint would not be necessary how these incentives and constraints interact to affect the households behavior determines in large part the number and type of eligibles aided by the program aggregate program costs given payment levels and the types of commodity bundles purchased by the recipient households clearly understanding the decision to accept or reject a conditional transfer offer has widespread implications for the costs of the transfer program the impact on eligible households and the attainment of society s objectives numerous studies have investigated the size and distribution of recipient benefits in conditional transfer programs 1 3 6 8 9 14 16 21 to this author s knowledge however no analysis has estimated a model of the household s decision to participate in a conditional transfer program using household data and a theoretically appropriate measure for the household s net gain to overcome this gap in our understanding of the household s

estimation of complete demand systems from household budget data the linear and quadratic expenditure systems in this paper we explore two issues in empirical demand analysis the estimation of complete systems of demand equations using household budget data section i and the incorporation of demographic characteristics into such systems section ii although there are numerous studies which use time series data to estimate complete demand systems and many which estimate engel curves from household budget data there are virtually none which combine budget data from different periods to estimate complete systems since each budget study corresponds to a single price situation one might conjecture that estimation of complete systems would not be possible unless budget studies were available from a large number of periods this is incorrect in section i we argue that interesting complete demand systems can be estimated from a small number of budget studies despite the limited price variability represented in such data to demonstrate this we use budget study data for two periods to estimate a pair of related demand systems the familiar linear expenditure system les and a quadratic expenditure system qes a generalization of les in which the demand equations are quadratic in total expenditure the inclusion of demographic variables in the analysis of household consumption patterns is desirable because there are likely to be systematic differences in the consumption behavior of households with different demographic characteristics but the effects of demographic characteristics have seldom been studied within the framework of complete demand systems in section ii we propose translating as a general method for incorporating demographic variables into complete systems of demand equations this method has not previously been discussed as a general technique for bringing demographic variables into demand systems although it has been employed in several studies to improve the estimates of the les and the qes presented in section i we reestimate these two systems using translating to incorporate family size

the estimation of marginal utility of income for application to agricultural policy analysis abstract a quality of life index qli a proxy measure of utility is constructed by factor weighted and simple summation weighted aggregation of socio psychological measures of well being the socio psychological measures were constructed from quality of life domains taken from selected years of the general social surveys general social surveys 1972 1993 cumulative code book principal investigator james a davis director and co principal investigator tom w smith chicago national opinion research center 1993 national data program for the social sciences series no 13 the quality of life indices qli indices are regressed on selected socio demographic variables using quadratic cobb douglas square root and semilog functional forms qli is much influenced by income education and health as measured here qli is not much influenced by year of measurement sector or by region of residence much variability in the qli is unique to individuals and our results are suited to predict group rather than individual well being practitioners computing the benefit cost ratio for a public program project or policy can weight dollars by income groups with marginal utilities derived from this study that methodology will matter even the conservative quadratic equation indicates that the marginal utility of income mui for families with very low incomes is half as large as for families with median incomes

the efficiency of housing search previous research in the housing market has largely focused on housing market outcomes e g the quantity of housing services demanded or supplied or the determination of equilibrium prices scant attention has been directed at the processes producing these outcomes recently economists have developed models of buyer and seller search processes in housing markets 6 22 but almost no empirical testing of these models has been done the importance of search in economic markets has been discussed by lippman and mccall 15 the difficulties encountered by deterministic theories of economic markets in explaining different prices for identical commodities and persistent positive levels of unemployed resources are overcome when search is introduced search may be of even greater importance in housing markets than in most other economic markets housing generally accounts for the largest item of consumption for most households for homeowners housing is usually the household s largest asset housing is a heterogeneous commodity that is traded in highly decentralized markets 2 the costs of moving can be substantial reducing the gains from relocation the consumption of housing also involves externalities that add to the heterogeneity of the consumption bundle finally recent theoretical work by courant 6 suggests that the rational search behavior of households facing discrimination in housing markets might act to perpetuate adverse market conditions facing such households given the importance of housing as a consumption commodity and as an asset and the above characteristics of housing and housing markets previous descriptive examinations

optimal departures from marginal cost pricing focuses on departures from marginal cost pricing optimal allocation or resources level of tax revenue that will be collected by the government theorems developed for resource allocation ebsco

revisiting the revisited terms of trade will china make a difference in challenging the conventional wisdom at the time singer and prebisch posited a number of explanations for declining terms of trade of developing economies including both country and product specific factors over the past decade we have begun to witness a simultaneous process of price differentiation within commodities with the prices of some commodities increasing and within manufacturing with the price of many manufactures falling these price changes may reverse the decline in the terms of trade of commodity producers the entry of china into the global market has played an important role in this augmenting the demand for many hard commodities its role as an exporter of manufactures coupled with concentration in global buying may undermine the prices of many manufactures

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

a household production specification of demographic variables in demand analysis empirical investigations into the expenditure and time allocation decisions of households usually allow the variation in demographic characteristics across households in particular the number and ages of dependent children to affect these decisions the motivation for allowing such demographic effects is two fold first it permits the researcher to pool observations from households with differing demographic characteristics secondly it has been argued that it allows the researcher to construct an index normally called an equivalence scale to show the full income required by a household with some given composition to attain the same level of utility as some reference household and hence permits comparisons of welfare levels across households there are two areas of controversy surrounding this literature which directly relate to its two sources of motivation first what is the appropriate demographic specification second can the estimated parameters be used to undertake welfare comparisons a series of demand studies including barten 1964 blundell 1980 blundell and walker 1982 gorman 1976 muellbauer 1974 1977 hurd and pencavel 1981 pollak and wales 1978 1981 and ray 1983 have attempted to answer the first problem by considering the current allocation of goods and in some cases household time conditional on demographic structure this literature treats demographic variables as exogenous whereas in contrast the neoclassical fertility literature see for example the contributions in schultz 1973 treats the numbers and ages of children as endogenous nonmarket goods within a lifecycle optimising framework the second problem has been raised by pollak and wales 1979 who argue convincingly whether household composition is the result of endogenous decisions or not it is impossible to compare the welfare of households with different compositions using the results of empirical demand analysis since market decisions do not reveal how the households feel about the presence or absence of children thus estimated equivalence scales are necessarily based on the households preferences conditional on their demographic compositions the object of this paper is to suggest a new approach to the problem of demographic specification and to show that this approach both highlights the problem of making welfare comparisons and at least in part resolves it