an overview of experimental u s consumer price indexes the consumer price index cpi has come under intense scrutiny in recent years to help assess potential differences between what the cpi measures and how it is used for various purposes the bureau of labor statistics has created a series of experimental price indexes this article contrasts how the cpi is currently constructed with those experimental indexes specifically experimental cpps have been constructed for two population groups older americans and poor americans in addition experimental geometric mean and superlative indexes have been developed that move the cpi away from its traditional fixed market basket concept

on the estimation of an implicitly additive demand system motivated by a lack of engel flexibility in commonly used demand systems rimmer and powell developed a new demand system this system referred to aidads is implicitly directly additive possesses marginal budget shares and thus engel elasticities that vary nonlinearly with expenditure such that predicted budget shares are restricted to the 0 1 interval due to these attractive engel properties aidads represents a significant contribution to the literature on demand analysis this paper presents an alternative estimation procedure to the one used by rimmer and powell and examines its properties via a case study the proposed approach avoids a linear approximation employed in rimmer and powell s estimation framework based on a small monte carlo study it appears that the approach produces more accurate estimates of the parameters and engel elasticities

productivity growth catching up and uncertainty in china s meat trade abstract the potential role of china as a major importer of agricultural products and the likely impact on world markets has been a topic of considerable debate over the past decade in this paper we focus specifically on the livestock sector and develop a detailed analysis of productivity growth in china s pig and poultry production along with projections of china s likely meat trade in the year 2010 we use a general equilibrium model which permits us to explore the sensitivity of our projections to macro economic uncertainty as well as uncertainty in livestock productivity growth rates our analysis shows that china s net trade position is very sensitive to both of these factors with high livestock productivity growth and a slow down in the rest of the economy china could be a substantial competitor in export markets by 2010 on the other hand slow productivity growth in livestock production coupled with a rapidly growing macro economy could transform china into a major market for future meat exports

understanding the determinants of structural change in world food markets american journal of agricultural economics 80 december 1052 1062 this study assesses the interaction between climate change and agricultural trade policies we distinguish between two dimensions of agricultural trade policy market insulation and subsidy levels building on the previous work of tsigas frisvold and kuhn 1997 we find that in the presence of current levels of agricultural subsidies increased price transmission as called for under the uruguay round agreement on agriculture reduces global welfare in the wake of climate change this is due to the positive correlation between productivity changes and current levels of agricultural support increases in subsidized output under climate change tend to exacerbate inefficiencies in the global agricultural economy in the absence of market insulation however once agricultural subsidies have also been eliminated price transmission via the global trading system contributes positively to economic adaptation under climate change products this may partially explain the relatively slow growth of world grain import demand in recent years in addition bilateral agreements with east asia nafta and the evolution of the cap have all had important impacts on the structure of world food and agricultural trade the objective of this paper is to assess the relative role of each of the major forces consumer demand factor accumulation transport costs and policy change in driving changes in the composition of world food trade in 1980 1995 to do so we employ a modified version of the global trade analysis project gtap model of world trade which permits us to isolate the contribution of each of these related factors to the changing composition of world food trade in a general equilibrium context we evaluate the relative role of each of these factors by simulating the model backwards in time from 1995 to 1980 under different assumptions this general approach termed backcasting i e backwards forecasting takes as exogenous the basic drivers of change and attempts to explain the resulting change in food trade composition the model produced changes in the composition of agricultural and food trade are compared with historical trade data to determine the relative importance of each factor on the changing composition of food trade given limited space our focus will be on explaining the changes in the global composition of food and agriculture trade a natural follow on effort would target specific markets in more detail this type of backcasting approach was first employed by gehlhar 1997 who sought to explain the shift in exports of primary commodities to manufactures in east asia in the 1980 s he calibrated the gtap model to 1992 data then implemented shocks to factor endowments and economywide total factor productivity tfp in order to force each economy back to its 1982 levels of population land labor human capital physical capital and technology by comparing actual and predicted changes in export shares in this period he found human capital accumulation played a key role in explaining the change in the aggregate composition of east asian exports gehlhar hertel and martin 1994 built on this work in an effort to predict future changes in the pattern of agricultural trade from 1992 2002 they also emphasized the importance of supply side determinants of agricultural trade in this paper we go beyond this earlier work in a number of ways first we focus on the composition of agricultural exports rather than simply looking at the share of agriculture in total trade secondly we incorporate the cranfield et al estimates of rimmer and powell s recently developed implicitly directly additive demand system nicknamed aidads into the gtap model this permits us to better capture the impact of demand side changes on the pattern of global tr

short versus long run implications of trade liberalization for poverty in three developing countries the impacts of global trade reform on poverty are a key concern in the current trade negotiations under the doha development agenda the aggregate poverty impacts of trade reform are in turn strongly linked to the impacts of such reforms on the rural population as they constitute the overwhelming majority of the poor in almost all developing countries this paper uses a new micro simulation methodology designed to analyze this critical issue the methodology is first explained and then applied to three developing countries of particular interest chile malawi and vietnam a key feature is the distinction between the short run impacts of reform where many factors most importantly selfemployed labor of the poor tend to be immobile between sectors and the longer run impacts when factors find their highest return regardless of the sector of employment this distinction makes an enormous difference and

the future of food demand understanding differences in global economic models understanding the capacity of agricultural systems to feed the world population under climate change requires projecting future food demand this article reviews demand modeling approaches from 10 global economic models participating in the agricultural model intercomparison and improvement project agmip we compare food demand projections in 2050 for various regions and agricultural products under harmonized scenarios of socioeconomic development climate change and bioenergy expansion in the reference scenario ssp2 food demand increases by 59 98 between 2005 and 2050 slightly higher than the most recent fao projection of 54 from 2005 2007 the range of results is large in particular for animal calories between 61 and 144 caused by differences in demand systems specifications and in income and price elasticities the results are more sensitive to socioeconomic assumptions than to climate change or bioenergy scenarios when considering a world with higher population and lower economic growth ssp3 consumption per capita drops on average by 9 for crops and 18 for livestock the maximum effect of climate change on calorie availability is 6 at the global level and the effect of biofuel production on calorie availability is even smaller

distributional effects of wto agricultural reforms in rich and poor countries rich countries agricultural trade policies are the battleground on which the future of the wto s troubled doha round will be determined subject to widespread criticism they nonetheless appear to be almost immune to serious reform and one of their most common defenses is that they protect poor farmers the authors findings reject this claim the analysis uses detailed data on farm incomes to show that major commodity programs are highly regressive in the united states and that the only serious losses under trade reform are among large wealthy farmers in a few heavily protected subsectors in contrast analysis using household data from 15 developing countries indicates that reforming rich countries agricultural trade policies would lift large numbers of developing country farm households out of poverty in the majority of cases these gains are not outweighed by the poverty increasing effects of higher food prices among other households agricultural reforms that appear feasible even under an ambitious doha round achieve only a fraction of the benefits for developing countries that full liberalization promises but protect u s large farms from most of the rigors of adjustment finally the analysis indicates that maximal trade led poverty reductions occur when developing countries participate more fully in agricultural trade liberalization

the effects of environmental fiscal reform in germany a simulation study this paper presents the first comprehensive model based impact analysis of the german environmental fiscal reform addressing the effects on co2 emissions economic growth employment and personal income distribution both an econometric input output model and a dynamic computable general equilibrium model are applied in order to enhance the credibility of our results the macroeconomic results are linked with a micro simulation model of the household sector so that detailed household data can be used to determine the effect of the environmental fiscal reform on personal income distribution we find a small double dividend in that energy consumption and co2 emissions decrease while employment rises the impact on economic growth is found to be minimal the fear that the environmental fiscal reform might interfere with the goals of social and income distribution policy is found to be largely unjustified

economic growth and the changing structure of trade and production in the pacific rim growth have been in the range of 6 7 young during this period production and trade patterns in the pacific basin have undergone profound structural changes in the last two decades south korea has moved from the production of labor intensive manufactures to more capital and skill intensive sectors thailand traditionally an exporter of natural resource based commodities showed a sharp fall in its export share of agriculture and a sharp rise in the share of manufactures such as textiles and simple electronics gehlhar in contrast while the importance of agriculture in total north american output has fallen its share in exports has remained stable in recent years as export volumes continue to increase the growth of total east asian exports naturally coincides with rapid import growth in order to expand their manufacturing capacity east asian countries have imported massive amounts of capital equipment but expansion of the manufacturing sector also pulls labor away from agriculture at the very time income growth is leading to increased per capita food demands therefore we have seen a strong rise in the demand for farm and food imports in east asia indeed during the 1980s this region emerged as the fastest growing market for agricultural commodities accounting for the bulk of the increase in u s exports usda 1993a

an analysis of substitution bias in measuring inflation 1959 851 we analyze the substitution bias in laspeyres type price indexes such as the cpi using 1959 1985 nipa consumption data for 101 commodities we employ two methodological approaches to calculation of the bias first we construct the tightest theoretical bounds on the col by applying nonparametric methods using algorithms developed by afriat and by varian second following diewert we construct superlative price index formulas namely tomqvist and fisher s ideal indexes under a chain as well as a fixed base specification homothetic preferences are found to be consistent with the data and sensitivity tests indicate that this result is not vacuous if the hypothesis of homotheticity is maintained the col bias has upper and lower limits of 0 22 and 0 14 percent per year respectively using the superlative indexes as the measure of the col the bias is about 0 18 percent per year for the period 1959 85 this estimate is somewhat larger than found in earlier studies our use of more disaggregated data is found to be responsible for part of the difference with the size of the estimated bias directly related to the extent of the aggregation

the impacts of china s household consumption expenditure patterns on energy demand and carbon emissions towards 2050 abstract this paper explores how china s household consumption patterns over the period 2005 2050 influence the total energy demand and carbon dioxide co2 emissions in two baseline scenarios and how it influences carbon prices as well as the economic cost in the corresponding carbon mitigation scenarios to this end we first put forward two possible household consumption expenditure patterns up to 2050 using the working leser model taking into account total expenditure increase and urbanization for comparison both expenditure patterns are then incorporated in a hybrid recursive dynamic computable general equilibrium model the results reveal that as income level increases in the coming decades the direct and indirect household energy requirements and co2 emissions would rise drastically when household expenditure shifts from material products and transport to service oriented goods around 21 000 mtce 1 of primary energy and 45 billion tons of co2 emissions would be saved over the 45 year period from 2005 to 2050 moreover carbon prices in the dematerialized mitigation scenario would fall by 13 in 2050 thus reducing the economic cost

environmental and economic effects of post kyoto carbon regimes results of simulations with the global model ginfors abstract using the extensive and disaggregated global ginfors model consequences of different possible post kyoto regimes on the german and european economy and other major economies in the medium run until 2020 are depicted the approach is very extensive and detailed in comparison to already existing analyses this holds for the number of explicitly modelled countries 50 and 2 regions and 41 economic sectors input output tables the bilateral trade flows the detailed coverage of behavioural parameters the coverage of energy balances and co 2 emissions as well as for the number and precise economic political design of simulation runs global emissions will double until 2030 compared to 1990 levels without the existence of a far reaching climate regime after 2012 a unilateral commitment of the eu would only be a drop in the bucket which solely strengthens the credibility of the eu in international negotiations a stabilisation of global emissions in 2020 compared to 2010 which is consistent with the 2 target of the eu can only be achieved if all developed and at least the large emerging economies participate and if all possible existing market ready reduction technologies are used

changes in the structure of global food demand may 1998 purdue agec staff paper 98 5 a newly developed demand system is used to estimate the response of food and food product demand to per capita expenditure changes the resulting engel elasticities are then used to project food and food product demand in 2020 assuming per capita expenditure and population changes results suggest that while food expenditure is projected to grow it accounts for a smaller proportion of total expenditure further analysis indicates change in the composition of food demand away from a grain and towards livestock is projected to occur in lower income countries in 2020

on why agriculture declines with economic growth abstract when economic growth is characterised by a slow rise in the demand for food and rapid growth in farm relative to non farm productivity it is understandable that agriculture in a closed economy declines in relative terms as that economy develops but why should agriculture decline in virtually all open growing economies as well including those able to retain a comparative advantage in agricultural products a key part of the answer is that the demand for non tradable goods tends to be income elastic so resources are diverted to their production even in open economies

estimating consumer demands across the development spectrum maximum likelihood estimates of an implicit direct additivity model abstract this paper characterizes consumer demand patterns across the development spectrum using elasticity estimates from a demand system possessing non linear engel effects demands for six broadly defined goods are then projected under the assumption that per capita expenditure growth rates differ across the development spectrum such projections illustrate the extent to which non linear income effects generate more plausible demand responses estimated marginal budget shares for food decline in a logistical manner and range from about 0 5 for ethiopia to less than 0 05 for the usa engel elasticities for food range from 0 95 for ethiopia to less than 0 1 for the usa

consumption and demand during the recent economic downturn anec dotal reports in the press indicate that some demands are recession resistant beer while others are very procyclical e g wine this naturally causes economists to attempt to infer something about engel curves just as macroe conomists think differently about growth and business cycles so it seems should microe conomists think differently about how con sumption responds to growth and business cycles using quarterly national income and product account nipa data figure 1 depicts consumption and food expenditure growth mean percentage growth rates for food con sumption was 2 3 in the period 1948 1977 and 1 85 in the period 1978 2009 while the standard deviation of growth rates fell from 0 37 in the earlier period to 0 27 in the later pe riod consistent with engel s law the growth rate of food consumption has fallen over time in either total or per capita forms unsur prisingly the quarterly growth rate of medical consumption not shown is higher than food with a mean growth of 5 97 in the earlier period and reduced growth of 3 4 and de clining in the later period interestingly stan dard deviation d of medical growth rate has fallen substantially from 0 51 to 0 18 the mean growth of overall consumption expendi tures was 3 9 d 4 15 in the earlier period and 3 1 d 2 62 in the later period finally housing expenditure growth rates not shown halved from 5 04 in the early period to 2 51 in the latter period with very stable rates of growth d 0 15 however negative growth rates occur during recessions 2001 is an ex ception indeed food expenditures fell almost 15 in the recent quarter from the previous quarter which was also negative growth sim ilar patterns of negative growth rates during re cessions occur for the other two categories of consumption in the period 1978 2009 and for total consumption as expected consumption and consumption growth behave very differ ently in recessions the question is are the negative growth rates just due to a fall in cur rent income or do they reflect uncertainty if uncertainty is key then one must funda mentally think about model future expecta tions in order to understand measure current demand as simple as these basic engel curve consid erations are one of the liveliest debates in eco nomics centers on consumption in response to income for decades there has been the steady accumulation of evidence for and against a keynesian type view that people consume out of current income the contrary view is most commonly called the permanent income hypothesis or pih due to modigliani and brumberg 1954 friedman 1957 and oth ers generally forward looking intertemporal models of consumption and savings might be called the life cycle hypothesis with pih as a special case yet economists have not been particularly successful at amassing convincing evidence that is consistent with the life cycle model of behavior in all of its ramifications and many find models of conventionally ra tional economic agents wanting e g laibson 1998 the pih is that individuals consume out of an annuity derived from expected lifetime wealth this is particularly relevant when dis cussing the effects of countercyclical fiscal pol icy john taylor 2008 recently sided with the pih against the keynesian or neo keynesian view a second major issue is whether liquid ity constraints mitigate the forward looking life cycle predictions a third issue is how un certainty affects consumption and saving pre cautionary behavior much research has focused on the demand response to changes in total expenditure or even food expenditure allocations to particu lar foods engel curve notions of this research could be stated as dqt dc 1 n where c is real total consumption expenditures c j2 i piqi where qt and pt are the th quantity and real price respectively macroeconomics fellows address rulon d pope is professor of economics at brigham young university the author would like to thank daniel sullivan for assistance fellows address was presented at the 2008 aaea annual meet ing in milwaukee wi august 2009 invited addresses are not sub jected to the journal s standard refereeing process

economic growth convergence and world food demand and supply in projecting global food demand to 2050 much attention has been given to rising demand due to the projected population increase from the current 7 4 billion to more than 9 billion an increasingly important source of the increase in food demand is per capita demand growth induced by rising income per person since the proportion of income spending on food decreases as incomes rise growth in global food demand will be greater if incomes grow faster in developing countries than in high income countries such a pattern of income convergence has become established in recent years making it important to assess the implications for food demand and supply using a resource based measure of food that accounts for the much higher production costs associated with dietary upgrading this paper concludes that per capita demand growth is likely to be a more important driver of food demand than population growth between now and 2050 using the middle ground international institute for applied systems analysis shared socioeconomic pathway projections to 2050 which assume continued income convergence the paper finds that the increase in food demand 102 percent would be roughly a third greater than without convergence 78 percent since the impact of convergence on the supply side is much more muted convergence puts upward pressure on world food prices partially offsetting a baseline trend toward falling world food prices to 2050

the effect of the german and british environmental taxation reforms a simple assessment abstract this article implements a simple econometric approach to assess the effect of the environmental tax reforms introduced in germany and the uk despite the very simple econometric approach adopted in this paper in the case of the energy demand our results do not differ markedly from those obtained from complicated multi sectoral econometric models in the case of the labour demand our results differ from the estimates obtained from econometric models where the employment level is not directly influenced by the energy price on the other hand our results are more similar to those obtained from models where the level of employment is directly influenced by the energy price confirming the findings of bosquet 2000 environmental tax reform does it work a survey of the empirical evidence ecological economics 34 19 32 and oecd 2004 environment and employment an assessment working party on national environmental policy oecd paris we conclude that environmental tax reforms can deliver substantial reductions in energy consumption while having small effects on the level of employment effect which can be positive depending on the size of the reduction in the labour costs and the value of cross price elasticities

toward a new conception of the environment competitiveness relationship accepting a fixed trade off between environmental regulation and competitiveness unnecessarily raises costs and slows down environmental progress studies finding high environmental compliance costs have traditionally focused on static cost impacts ignoring any offsetting productivity benefits from innovation they typically overestimated compliance costs neglected innovation offsets and disregarded the affected industry s initial competitiveness rather than simply adding to cost properly crafted environmental standards can trigger innovation offsets allowing companies to improve their resource productivity shifting the debate from pollution control to pollution prevention was a step forward it is now necessary to make the next step and focus on resource productivity

variance estimation for price indexes from a two stage sample with rotating panels estimation of price indexes in the united states is generally based on complex rotating panel surveys the sample for the consumer price index for example is selected in three stages geographic areas establishments and individual items with 20 of the sample being replaced by rotation each year at each period a time series of data is available for use in estimation this article examines how to best combine data for estimation of long term and short term changes and how to estimate the variances of the index estimators in the context of two stage sampling i extend the class of estimators introduced by valliant and miller of laspeyres indexes formed using sample data collected from the current period back to a previous base period linearization estimators of variance for indexes of long term and short term change are derived the theory is supported by an empirical simulation study using two stage sampling of establishments and items from a population derived from u s bureau of labor statistics

economic growth and world food insecurity a parametric approach abstract this paper focuses on the feasibility of reducing the number of individuals that are food insecure to about 700 million by 2015 a sufficient statistic to characterize the level and distribution of income in 134 countries is developed and regressed on variables hypothesized to be its major determinants a global general equilibrium model is then calibrated to data and experiments performed that change the levels of these variables the results show that attaining the 700 million target is feasible but unlikely growth in economy wide total factor productivity agricultural factor productivity and labor productivity is analyzed

a system of demand equations satisfying effectively global regularity conditions a parametric specification of an indirect utility function in terms oaf expenditure and two unit cost functions is proposed specification of these unit cost functions in terms of regular functions leads to the notion of an effectively globally regular system of demand equations that is a system of demand equations that is regular over a cone in expenditure price space and for which the regular region includes all points in any given sample and all values of nominal expenditure and prices generating higher values of real expenditure than the sample minimum this general model nests a number of popular demand systems such as the linear expenditure system as special cases an empirical application illustrates some of these ideas copyright 1996 by mit press

a modified implicit directly additive demand system a recently developed demand system nicknamed aidads an implicit directly additive demand system offers an approach to capturing consumer preferences across a wide range of expenditure levels aidads generalizes the les by assuming marginal budget shares vary with utility and hence with expenditure like the les aidads includes subsistence parameters that define minimum consumption levels here we present a modified aidads maidads that replaces the constant subsistence parameters with functions that also vary with utility these transformed subsistence levels are referred to as minimum consumption quantities this model is applied to the 1996 international consumption project data as these data span a wide range of expenditure levels maidads offers a viable alternative for the estimation of a global demand system results suggest minimum consumption quantities for staple grains livestock other food products alcohol and tobacco clothing and footwear and transport and transport services vary

causes of world trade growth in agricultural and food products 1951 2000 a demand function approach the objective of the present study is to analyse the causes of the growth of international agricultural and food trade in volume terms from 1951 to 2000 the results suggest that income growth has been the principal reason for this expansion while exchange rate stability and the real price of agricultural products played only a minor role multilateral trade liberalization and trade costs given their long term stability are not elements that could have stimulated their growth finally the intensive liberalization of trade which took place in various economic regions especially in europe became a key factor in promoting agricultural trade among the countries participating in regional trade agreements the study results also indicate that the determinants of trade growth for these goods were different to those for other goods and other periods

an implicitly additive demand system the problem of endowing large applied general equilibrium models with numerical values for parameters is formidable for example a complete set of own and cross price elasticities of demands for the monash model of the australianeconomy involves in excess of 50000 items invoking the minimal assumptions that demand is generated by utility maximization reduces the load to about 26000 obviously still a number much too large for unrestrained econometric estimation to obtain demand systems estimates for a dozen or so generic commodities at a top level of aggregation categories like food clothing and footwear etc typically johansen s lead has been followed and directly additive preferences imposed upon the underlying utility function with the move beyond one step linearized solutions of applied general equilibrium models the functional form of the demand system adopted becomes an issue the most celebrated of the additive preference demand systems the linear expenditure system les has one

formula bias and within stratum substitution bias in the u s cpi in 1978 bls adopted an estimator for u s cpi component indexes that incorporates scientific samples of outlets and varieties and that allows the calculation of reliable standard errors consumer substitution of outlets and varieties offering better values could cause bias in these indexes a more important source of bias is however a tendency to give excessive weight to items whose initial price is temporarily low the empirical evidence is striking average price series and matched food cpis grew at almost the same rate before 1978 but between 1980 and 1992 the cpis average about 1 4 per year more growth for unleaded gasoline the discrepancy averages 0 8 per year

how to set the proper level of carbon tax in the context of chinese construction sector a cge analysis abstract under global warming and severe environmental problems the paris agreement urges china to accelerate the pace of the low carbon economy improving the energy efficiency of the construction sector may be an important way to reduce co2 emissions as a reasonable energy policy instrument a carbon tax can effectively improve energy efficiency and reduce co2 emissions in this study a dynamic computable general equilibrium model is developed to explore the possible impacts of different carbon tax conditions on the energy consumption of the construction sector and the macroeconomy of china results show that the appropriate carbon tax is 60 rmb t which cannot only achieve the emission reduction target but also minimize the negative impact on the macroeconomy however the proper level of the carbon tax varies by building stage under the proper carbon tax level the peak of carbon emissions could be reached in 2025 the main purpose of this paper is to provide a theoretical basis for the government in formulating different energy policies

hybrid modeling to support energy climate policy effects of feed in tariffs to promote renewable energy in portugal abstract feed in tariffs have been the main policy instrument applied in portugal for the promotion of electricity produced from renewable energy sources under the eu directives on energy and climate regulation in this paper we provide an empirical impact assessment of the economic and environmental effects of portugal s fits policy to promote res e generation impact assessment of policy instruments plays a crucial role on decision making process for numerical simulations we make use of a hybrid top down bottom up general equilibrium modeling approach which represents a reliable tool to analyze the complex interactions between economic energy and environmental issues related to energy policies numerical simulations confirm the empirical evidence that the fits policy implemented by portugal was both an effective and a cost efficient way to increase the generation of electricity from renewable energy sources and thus to achieve the national res e target of 45 in 2010 results show relatively modest macroeconomic impacts indicating potentially low economic adjustment costs from an environmental perspective the deployment of renewable energy source results in significant carbon emissions reductions

towards a more general approach to testing the time additivity hypothesis a new procedure is proposed for re examining the assumption of additivity of preferences over time which although untenable is usually maintained in intertemporal analyses of consumption and labour supply the method is an extension of a famous work by browning however it is more general in permitting the estimation of intertemporal demand systems which are explicit in an unobservable variable price of utility but may lack a closed form representation in terms of observable variables such as prices and total outlay it also makes extensive use of duality theory to solve the endogeneity problem encountered in browning s study applying this method with an appropriate estimator to the australian aggregate data it is found that the time additivity hypothesis is decisively rejected which is consistent with browning s conclusion

nutrition transition and the structure of global food demand estimating future demand for food is a critical aspect of global food security analyses the process linking dietary changes to wealth is known as the nutrition transition and presents well identified features that help to predict consumption changes in poor countries this study proposes to represent the nutrition transition with a nonhomothetic flexible in income demand system known as the modified implicitly directly additive demand system maidads the resulting model is transparent and estimated statistically based on cross sectional information from faostat it captures the main features of the nutrition transition rise in demand for calories associated with income growth diversification of diets away from starchy staples and a large increase in caloric demand for animal based products fats and sweeteners the estimated model is used to project food demand between 2010 and 2050 based on a set of plausible futures trend projections and shared socioeconomic pathways scenarios the main results of these projections are as follows 1 global food demand will increase by 46 less than half the growth in the previous four decades 2 this growth will be attributable mainly to lower middle income and low income countries 3 the structure of global food demand will change over the period with a 95 increase in demand for animal based calories and a much smaller 18 increase in demand for starchy staples and 4 the analysis of a range of population and income projections reveals important uncertainties depending on the scenario the projected increases in demand for animal based and vegetal based calories range from 78 to 109 and from 20 to 42 respectively

the reliability of ml estimators of systems of demand equations evidence from oecd countries in large demand systems when the unknown error covariance matrix is approximated by its usual maximum likelihood estimator the coefficient estimates are known to suffer from two problems 1 the asymptotic standard errors severely understate the sampling variability of the estimates and 2 the efficiency of the maximum likelihood coefficient estimates is greatly impaired in this paper the author proposes an alternative estimator for the covariance matrix and evaluates its performance using time series data for oecd countries the author finds that there is a spectacular improvement copyright 1991 by mit press

economic welfare and environmental impact of feed in tariff policy a case study in iran following a particular attention given to environmental issues over the last few decades establishing proper developmental policies to increase electricity production from renewable energy re has not only been an important issue but also a challenge for many countries feed in tariff fit policy is one of the tools that is being used to facilitate the development of re this research evaluated the economic welfare and environmental impact of this policy on iran s economy therefore after developing an economic energy environmental e3 type of hybrid general equilibrium model the effect of fit policy was examined under different scenarios in order to find an optimal condition in which 10 of electrical energy could be produced from renewable resources the comparison between the results showed that the application of subsidies to re and the way the government finances these subsidies can affect the results of fit policy meanwhile regardless of the role considered for the impact of environmental factors our policies under the scenario of technology neutral is the most efficient as it has less impact on the decline of gdp of different sectors and also has less financial cost for government

can consumers willingness to pay incentivize adoption of environmental impact reducing technologies in meat animal production abstract this study develops a model estimating consumer willingness to pay wtp for environmental meat attributes and uses a multi objective nutritional optimizer to explore the extent to which wtp can offset on farm costs of reducing water use data for the wtp model are sourced from a literature survey of the agricola and google scholar databases yielding 46 studies estimating wtp for pure and impure organic grass fed natural environmental meat attributes bayesian analysis is used to estimate 3 models varying in independent variables models are evaluated by the correlation coefficient r2 root mean squared error of prediction rmspe and posterior model probability the most probable model is then used to estimate a confidence range of wtp for pure environmental beef impure environmental labels result in higher wtp than pure labels non hypothetical wtp for pure environmental labeling for north american consumers ranges from 6 7 to 32 6 a case study is conducted to identify the expected reduction in water use that can be funded from capturing wtp through labeling a multi objective nutritional optimizer is used to identify ideal management of beef cattle to reduce whole system water use in three regions of the united states cost increases from management are varied over the predicted range in wtp and combined with the probability of a consumer purchasing beef at each wtp value to identify the theoretical effect on expected environmental impact reduction a 10 premium is the ideal wtp resulting in water use reductions between 24 4 l and 41 4 l

technological change in economic models of environmental policy a survey this paper provides an overview of the treatment of technological change in economic models of environmental policy numerous economic modeling studies have confirmed the sensitivity of mid and long run climate change mitigation cost and benefit projections to assumptions about technology costs in general technical progress is considered to be a noneconomic exogenous variable in global climate change modeling however there is overwhelming evidence that technological change is not an exogenous variable but to an important degree endogenous induced by needs and pressures hence some environmenteconomy models treat technological change as endogenous responding to socio economic variables three main elements in models of technological innovation are i corporate investment in research and development ii spillovers from r d and iii technology learning especially learning by doing the incorporation of induced technological change in different types of environmental economic models tends to reduce the costs of environmental policy accelerates abatement and may lead to positive spillover and negative leakage

economic implications of alternative allocation schemes for emission allowances political feasibility of emission trading systems may crucially depend on the free initial allocation of emission allowances to energy intensive industries in order to ameliorate adverse production and employment effects we investigate the potential trade off between such compensation and economic efficiency for alternative allocation rules where emission allowances are based on either emissions or output based on analytical partial equilibrium and numerical general equilibrium analysis we show that in open trading systems the trade off becomes the more severe the higher the international permit price is whenever the permit price can be considered exogenous to firms or industries the output based allocation rule is distinctly less costly than the emission based rule to preserve output and employment in energy intensive sectors the reason is that emission based allocation of allowances not only provides an implicit output subsidy but also lowers the effective price of emission inputs to regulated firms emissionbased allocation is particularly expensive towards higher international permit prices where the implicit subsidies to emission use in energy intensive sectors produce drastic efficiency losses since they imply high expenditures for carbon permit imports rather than high net revenues from efficient carbon permit exports

world food demand long term projections of global food demand are heavily dependent on which functional form of the food demand equation is used given that real incomes can change substantially over the long term key elements are the dependence of the income elasticity on income which ensures that the food budget share always lies within the 0 1 range and the role of income inequality this article analyzes these issues proposes a new functional form that deals with them and presents estimates of income and price elasticities for food in 138 countries copyright 2012 oxford university press

an empirically oriented demand system with improved regularity properties while the almost ideal demand system has received increasing attention in empirical studies of consumer demand the fact that the underlying piglog cost function is not globally regular has often led to violation of negative semidefiniteness in the estimated slutsky matrix this paper suggests a modification to the piglog class of preferences termed mpiglog which preserves regularity in a wider region of expenditure price space in an empirical section the almost ideal demand system special case of piglog is compared with the analogous special case of mpiglog which the authors term maids the comparison demonstrates the improved regularity features of maids

confronting the food energy environment trilemma global land use in the long run economic agronomic and biophysical drivers affect global land use so all three influences need to be considered in evaluating economically optimal allocations of the world s land resources a dynamic forward looking optimization framework applied over the course of the coming century shows that although some deforestation is optimal in the near term in the absence of climate change regulation the desirability of further deforestation is eliminated by mid century although adverse productivity shocks from climate change have a modest effect on global land use such shocks combined with rapid growth in energy prices lead to significant deforestation and higher greenhouse gas emissions than in the baseline imposition of a global greenhouse gas emissions constraint further heightens the competition for land as fertilizer use declines and land based mitigation strategies expand however anticipation of the constraint largely dilutes its environmental effectiveness as deforestation accelerates prior to imposition of the target

what does europe pay for clean energy review of macroeconomic simulation studies this paper analyses the macroeconomic costs of environmental regulation in european energy markets on the basis of existing macroeconomic simulation studies the analysis comprises the european emssion trading scheme energy taxes measures in the transport sector and the promotion of renewable energy sources we find that these instruments affect the european economy in particular the energy intensive industries and the industries that produce internationally tradeable goods from a macroeconomic point of view however the costs of environmental regulation appear to be modest the underlying environmental targets and the efficient design of regulation are key determinants for the cost burden

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

productivity growth technical progress and efficiency change in industrialized countries this paper analyzes productivity growth in 17 oecd countries over the period 1979 1988 a nonparametric programming method activity analysis is used to compute malmquist productivity indexes these are decomposed into two component measures namely technical change and efficiency change we find that u s productivity growth is slightly higher than average all of which is due to technical change japan s productivity growth is the highest in the sample with almost half due to efficiency change jel c43 d24 in this paper we apply recently developed

using scanner data to construct cp1 basic component indexes this article considers how scanner data could be used in constructing component indexes for the u s consumer price index one product coffee in two cities generates over 1 8 million observations in just over two years so coping with the sheer volume of data would be a challenge some other findings are 1 some aggregation of prices into unit value averages is necessary for practical reasons and to avoid bias 2 chained laspeyres indexes are very high 3 modified laspeyres indexes have some upward bias but much less than a true laspeyres index 4 fisher ideal or modified edgeworth indexes perform well and 5 aggregating prices across outlets to form city level unit values reduces the discrepancies between index number formulas

economic impacts of the 1997 eu energy tax simulations with three eu wide models in march 1997 the european commission adopted aproposal that increases existing minimum levels oftaxation on mineral oils by around 10 to 25 andintroduces excises for other energy products thispaper analyses the macroeconomic impacts of theproposal it employs three models hermes gem e3 ande3me all models confirm that the proposal will havepositive macroeconomic impacts when the tax revenuesare used to reduce social security contributions paidby employers for the eu as a whole both gdp andemployment are expected to be higher and co2emissions are 0 9 to 1 6 percent lower the positiveeu wide effects can be observed in practically allmember states the sector impacts are modest with theenergy sector expected to face the most negativeimpacts differences between model results are due tothe model type general equilibrium ormacro econometric the eu countries covered and theway tax exemptions were handled crucial assumptionsto obtain the double dividend are the modelling ofthe labour market and the impacts on eu externaltrade the sensitivity of the results for the use oftax revenues tax exemptions and tax rate increases isassessed

an empirical investigation of the trade benefit function we introduce new definition and estimation procedures of trade benefit functions that allow researchers to generate estimable import share functions the method is based on the work of chau and fare while it is more general in permitting the estimation of hicksian import share systems which are explicit in an unobservable variable but may lack a closed form representation in terms of observable variables an empirical application demonstrates the feasibility of the proposed method

agricultural research spending must increase in light of future uncertainties abstract agricultural productivity depends critically on investments in research and development r d but there is a long lag in this response failing to invest today in improvements of agricultural productivity cannot be simply corrected a few decades later if the world finds itself short of food at that point in time this fundamental irreversibility is particularly problematic in light of uncertain future population income and climate change as portrayed in the ipcc s shared socio economic pathways ssps this paper finds the optimal path of agricultural r d spending over the 21st century for each ssp along with valuation of those regrets associated with investment decisions later revealed to be in error the maximum regret is minimized to find a robust optimal r d pathway that factors in key uncertainties and the lag in productivity response to r d results indicate that the whole of uncertainty s impact on r d is greater than the sum of its individual parts uncertainty in future population has the dominant impact on the optimal r d expenditure path the robust solution suggests that the optimal r d spending strategy is very close to the one that will increase agricultural productivity fast enough to feed the world under the most populous scenario it also suggests that society should accelerate r d spending up to mid century thereafter moderating this growth rate

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

the long run decline in the share of agricultural and food products in international trade a gravity equation approach to its causes the objective of this study is to determine the causes of the loss of share of agricultural products and food in international trade the article compares using a gravity model the impact of various factors upon bilateral trade in agricultural products in manufactures and in total trade between 1963 and 2000 for a representative sample of 40 countries the results clearly demonstrate how the low demand elasticity for agricultural products and food the high degree of protectionism to which they were subjected and their meagre share in intra industrial trade are the principal causes of their relatively slow growth