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

empirical implications of equilibrium bidding in first price symmetric common value auctions this paper studies federal auctions for wildcat leases on the outer continental shelf from 1954 to 1970 these are leases where bidders privately acquire at some cost noisy but equally informative signals about the amount of oil and gas that may be present we develop tests of rational and equilibrium bidding in a common values model that are implemented using data on bids and ex post values we also use data on tract location and exposr values to test the comparative static prediction that bidders may bid less aggressively in common value auctions when they expect more competition we find that bidders are aware of the winner s curse and their bidding is largely consistent with equilibrium

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

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

auctioning incentive contracts this paper draws a remarkably simple bridge between auction theory and incentive theory it considers the auctioning of an indivisible project among several fi rms the firms have private information about their future cost at th e bidding stage and the selected firm ex post invests in cost reduct ion the authors show that 1 the optimal auction can be implemented by a dominant strategy auction that uses information about both the first bid and the second bid 2 the winner faces a linear incenti ve contract 3 the fixed transfer to the winner decreases with his announced expected cost and increases with the second lowest announce d expected cost and 4 the share of cost overruns borne by the winn er decreases with the winner s announced expected cost copyright 1987 by university of chicago press

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

dynamic taxation of non renewable natural resources under asymmetric information about reserves optimal regulation is developed for a case with type dependent dynamics in costs in exploiting nonrenewable natural resources a government faces the problem that extraction companies possess private information about the size of the reserves optimal contracts in a two period framework distort both the extent and the pace of depletion the regulatory optimum is implementable by a menu of tangent planes generated by license fees and royalties or by a corporate income tax system containing type dependent depletion allowances and tax exempted income levels if the terminal time is endogenized it is optimal also to distort the number of extraction periods

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

natural resource economics under the rule of hotelling abstract natural resource stocks held in situ are physical assets equilibrium in the assets market requires that their rates of return be such that their owners are just willing to hold on to them rather than invest elsewhere i discuss a number of factors relating to the evolution of extraction costs to the durability of the resource to market structure and to uncertainty that are important in correctly characterizing the rate of return on holding exhaustible natural resource stocks the emphasis is put on how those factors can potentially help bridge the gap between the basic hotelling s rule of natural resource exploitation and the historical behaviour of the flow price of a number of resources i also highlight some theoretical and empirical issues that need further attention

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

awarding monopoly franchises the authors analyze how to award a monopoly franchise when the objective is to maximize expected consumers surplus net of transfer payments to the producer potential producers initially possess independent private information about uncertain production costs only the chosen producer subsequently observes realized production costs after awarding the franchise to the producer with the lowest expected costs prices are optimally set above realized marginal cost these ex post distortions foster more competitive bidding ex ante the distortions for any bid cost pair are invariant to the number of bidders n though expected distortions and profits decline with n copyright 1987 by american economic association

renegotiation and information revelation over time the case of optimal labor contracts the paper analyzes the issue of commitment in grossman and hart s model of optimal labor contracts under asymmetric information about firm profitability we extend their framework by allowing employment to vary over time at equidistant intervals when both parties can precommit ex ante not to renegotiate the contract this replicates the grossman hart outcome each subperiod when precommitment is not possible information revealed through the contract can create pareto improving renegotiation opportunities and the issue of optimal information revelation arises the paper analyzes the impact of ex post pareto improving renegotiations on the optimal contract

extracting information or resource the hotelling rule revisited under asymmetric information we characterize the optimal extraction path when a concessionaire has private information on the initial stock of resource under asymmetric information a virtual hotelling rule describes how the resource price evolves over time and how extraction costs are compounded with information costs along an optimal extraction path in sharp contrast with the case of complete information elds which are heterogeneous in terms of their initial stocks follow di erent extraction paths some resource might be left unexploited in the long run as a way to foster incentives the optimal contract may sometimes be implemented through royalties and license fees with a market of concessionaires asymmetric information leads to a virtual her ndahl principle and to a new form of heterogeneity across active concessionaires under asymmetric information the market price converges faster to its long run limit exhibiting more stability

on countervailing incentives abstract this paper extends and unifies previous work on optimal contracts under countervailing incentives shedding light in particular on the relation between countervailing incentives and pooling inflexible rules our main result is that the nature of the optimal contract depends crucially on whether the agent s utility is quasiconcave or quasiconvex in the private parameter the optimal contract is separated in the former case and it may entail pooling in the latter case journal of economic literature classification number d82

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

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

fruit and vegetable consumption patterns a segmentation approach in this article we study the heterogeneity of fruit and vegetable consumption patterns in france a finite mixture of aids models is used to describe food demand patterns revealing different preferences over distinct classes we obtained six different clusters which reflect specific socio demographic characteristics and different income and price elasticities this approach is appropriate for targeting specific public nutritional policies our main results show that unlike the other clusters in which the usual price and income policy tools may be used the lowest income cluster with the lowest consumption remains insensitive to economic variables

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

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

on monopoly power in extractive resource markets abstract potential monopoly power in extractive resource markets is reduced by the depletability of reserves this paper examines the dependence of monopoly power on resource rent and on uncertainty over future reserve levels a model is developed that treats reserves as inventories that fluctuate stochastically over time as a result of exploration development and production activities solutions of the model illustrate how output and monopoly power vary with the elasticity of demand rent as a fraction of price and the variance of reserve fluctuations it is shown that uncertainty over future reserves can speed up production and by reducing resource rent restore part of the monopoly power otherwise lost because of depletion antitrust implications are discussed with reference to several resources

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

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

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

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

adjustment costs and threshold effects in factor demand relationships abstractit has been recently argued that producers may not respond to every input price change in the way that a linear factor demand model would predict this lumpy response is due to adjustment costs that are inherent in the act of adjusting the mix of inputs applied in the underlying production technologies this study aims to provide a solid conceptual framework for these nonlinearities in factor demand relationships industry specific implications of convex and non convex adjustment costs for the linearity of the factor demand relationships as well as price and substitution elasticities are explored a two regime threshold system of factor demand equations is estimated for several manufacturing industries in the united states empirical results suggest significant threshold effects in the factor demand relationships in most nondurable goods sectors the size and the nature of thresholds depend upon industry characteristics including input composition and non convexity of underlying adjustment costs

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

bayesian estimation of a censored linear almost ideal demand system food demand in pakistan a censored linear almost ideal demand system for food is estimated with a bayesian markov chain monte carlo procedure using a sample of urban households from pakistan all own price elasticities but one are found to be negative and all total food expenditure elasticities are found to be positive with a high posterior probability there is a mix of gross complements and substitutes among the food products while net substitution is the predominant pattern household characteristics play a role in food expenditures and regional differences exist these demand elasticities can inform policy deliberations by the national government and international organizations welfare policy and market analyses require estimation of a complete system of demand equations often from household survey data unlike aggregate time series which are often not conducive to precise estimation of crossprice effects due largely to collinearity of prices cross sectional data offer an important advantage in deriving better elasticity estimates detailed demographic characteristics collected in cross sectional surveys allow accommodation of heterogeneous preferences and the typically large sample also provides the degrees of freedom to estimate a large and disaggregate demand system the use of microdata however is often complicated by censoring in the dependent variables this censored data feature most notable in demand estimation at the disaggregate level needs to be accommodated in order to obtain consistent parameter and elasticity estimates deaton 1986 p 1809 noted that the issue of zero observations is one of the most pressing panagiotis kasteridis is postdoctoral research associate and steven t yen is a professor at the university of tennessee cheng fang is an economist at the global information and early warning service food and agriculture organization fao of the united nations research was supported in part by usda s cooperative agreements nos 58 5000 7 0123 and 43 3aem 2 80063 the authors benefited from constructive comments by two anonymous reviewers and a blueprint for the monte carlo simulation by editor jeffrey h dorfman the article reflects the views of the authors not necessarily those of the usda or fao or its member

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

british tourism demand elasticities in mediterranean countries we use the almost ideal demand system aids model developed by deaton and muellbauer 1980 to estimate tourism demand elasticities for a number of mediterranean countries cyprus greece italy malta portugal spain and turkey in relation to tourists originating from the united kingdom during the period 1963 to 2009 using the restrictions imposed by theory we find that the model is able to explain developments in market shares reasonably well despite the large and at times sudden changes in market shares over the sample period our share estimates indicate that while spain and portugal managed to keep a stable market share over time malta and especially italy lost market share to cyprus greece and turkey overall we observe that italy and spain have the lowest own price elasticities whereas greece portugal spain and turkey are expenditure inelastic holiday destinations we also improve over the traditional treatment of the aids model in the literature by studying the stability of the estimat

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

simple menus of contracts in cost based procurement and regulation in an influential paper jean jacques laffont and jean tirole 1986 formulated a principal agent model of cost based procurement and regulation and showed that the principal can implement the optimal mechanism by offering the agent a menu consisting of a continuum of linear contracts two related problems with applying this theory in practice have been that the economic logic and the underlying mathematics involved in calculating the optimal menu are quite complex and the principal must be able to specify the agent s entire disutility of effort function in order to calculate the optimal menu as a result the model has not been widely used in practice to either calculate actual incentive contracts or even to develop useful qualitative guidance about the nature of the optimal solution and how it is affected by various economic factors the purpose of this paper is to show that dramatically simpler menus which are easy to understand and calculate and which have lower informational requirements can at least in some cases capture a substantial share of the gains achievable by the fully optimal complex menu in particular this paper considers two item menus where one item is a cost reimbursement contract and the other item is a fixed price contract such menus are called fixed price cost reimbursement fpcr menus for the case where the agent s utility is quadratic and the agent s type is distributed uniformly it is shown that the optimal fpcr menu always captures at least three quarters of the gain that the optimal complex menu achieves where the gain is measured relative to the result of using a cost reimbursement contract this paper s research was originally motivated by a policy issue in defense procurement in the united states the department of defense dod purchases almost all major weapons systems from sole source contractors using contracting methods that essentially amount to using cost reimbursement contracts the best way to understand why dod uses costreimbursement contracting methods is that they perform precisely the function identified in laffont and tirole s principal agent model they guarantee in a situation that amounts to a bilateral monopoly that dod and the firm can reach an agreement i e they guarantee that the agent will always produce the good of course the use of cost reimbursement contracting methods

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

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

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

adverse selection and renegotiation in procurement as was shown by dewatripont optimal long term contracts are generally not sequentially optimal the parties ex post renegotiate them to their mutual advantage this paper fully characterizes the equilibrium of a simple two period procurement situation and studies the extent to which renegotiation reduces ex ante welfare i a central result is that like in the non commitment case the second period allocation is optimal for the principal conditionally on his posterior beliefs about the agent ii the first period allocation exhibits an increasing amount of pooling when the discount factor grows iii with a continuum of types it is never optimal to induce full separation the paper also analyzes whether renegotiated long term contracts yield outcomes resembling those under either unnegotiated long term contracts or a sequence of short term contracts and it links the analysis with the multiple unit durable good monopoly problem

demand for differentiated products price and advertising evidence from the u s beer market abstract this paper employs a nation wide sample of supermarket scanner data to estimate a large brand level demand system for beer in the u s using the distance metric method of pinkse slade and brett pinkse j slade m brett c 2002 spatial price competition a semiparametric approach econometrica 70 1111 1155 unlike previous studies this work estimates the own and cross advertising elasticities in addition to price elasticities positive and negative cross advertising elasticities imply the presence of both cooperative and predatory effects of advertising expenditures across brands however the former effect appears to dominate suggesting that advertising increases the overall demand for beer we discuss the implications of these results in this industry

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

on optimal extraction under asymmetric information over reclamation costs abstract polluting exhaustible resource extraction ends with costly reclamation and producers have better information about future reclamation costs than the regulator this paper analyzes optimal contract between the regulator and the mining firm in a two stage model in which extraction and pollution generation is followed by reclamation with asymmetric information over reclamation costs the contract consists of a pollution tax and a mechanism used for cost information revelation and it extracts all the profit from the highest cost type leaves profits for the more efficient types and dictates a reclamation effort that is lower than the complete information effort it is further shown that the optimal pollution tax under asymmetric information can be lower or higher than the tax under complete information in addition the exclusion of the most expensive types is analyzed the results can help to design policies that improve the existing ones by saving public funds by improving the state of the environment and by excluding those mining operations that do not produce net benefits for the society

exploration and exhaustible resources the microfoundations of aggregate models the appropriate specifications for aggregate extraction and exploration cost functions are derived from a disaggregate model of the search for low cost deposits of an exhaustible resource the common practice of combining the no discovery extraction cost function with exploration is shown to result in a misspecified model for which the total cost of extracting the resource is not well defined the widely accepted prediction that the anticipated discovery of low cost deposits results in a u shaped price path appears to be an artifact of this misspecification for the authors properly specified cost functions the predicted resource price always rises copyright 1989 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

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

using cost observation to regulate firms the paper emphasizes the use of accounting data in regulatory or procurement contracts when the supplier 1 has superior information about the cost of the project and 2 invests in cost reduction the main result states that under risk neutrality the supplier announces an expected cost and is given an incentive contract linear in cost overruns this optimal contract moves toward a fixed price contract as the announced cost decreases an investment choice is then introduced and the use of a rate of return regulation is studied

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

dynamic regulation of quality we develop a dynamic regulation model of quality provision where maintenance efforts and quality shocks have a durable impact when the regulator contracts with a sequence of agents asymmetric information can lead to overprovision of quality reflecting a dynamic rent extraction effect when the regulator contracts with a single agent the efficiency of their relationship depends on the regulator s ability to transfer rents across periods hiring a single agent with unlimited liability is socially preferable to hiring a sequence of agents even when no commitment is feasible by contrast shorter franchises are socially preferable if the agent has limited liability

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

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

estimating the effect of financial aid offers on college enrollment a regression discontinuity approach an important problem faced by colleges and universities that of evaluating the effect of their financial aid offers on student enrollment decisions is complicated by the likely endogeneity of the aid offer variable in a student enrollment equation this article shows how discontinuities in an east coast college s aid assignment rule can be exploited to obtain credible estimates of the aid effect without having to rely on arbitrary exclusion restrictions and functional form assumptions semiparametric estimates based on a regression discontinuity rd approach affirm the importance of financial aid as an effective instrument in competing with other colleges for students

countervailing incentives in agency problems abstract we analyze countervailing incentives in agency problem countervailing incentives exist when the agent has an incentive to understate his private information for some of its realizations and to overstate it for others when countervailing incentives arise pooling generally characterizes the equilibrium contract furthermore performance is distorted both above and below efficient levels in addition the agent s rents generally increase with the realization of his private information over some ranges and decrease over other ranges we demonstate that the creation of countervailing incentives can enhance aggregate welfare

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

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

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

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

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

native american obesity an economic model of the thrifty gene theory native american obesity is hypothesized to result from three potential causes 1 a genetic predisposition or the thrifty gene 2 a rational addiction to nutrients and 3 dietary adjustment costs these hypotheses are tested using a two stage household production approach and scanner data from a panel of native and non native supermarkets nutrient intake for both groups is strongly influenced by adjustment costs native americans tend to place higher implicit valuations on protein relative to fats and carbohydrates compared to non natives consequently reductions in real carbohydrate prices over time may be a cause of high incidence of native american obesity

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

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

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

price formation of fish an application of an inverse demand system inverse demand systems explain price variations as functions of quantity variations they have properties analogous to those of regular demand systems there are very few examples of their empirical application in part this is due to lack of data for which price is the decision variable and the quantity given the case of fish landed at belgian sea ports appears to suit an inverse demand system well a rotterdam variant of such a system in estimated allais interaction intensities have been derived and show a reasonable pattern

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

learning by doing and dynamic regulation from experience regulated monopolists learn to employ cost reducing innovations we characterize the optimal regulation of an innovating monopolist with unknown costs regulatory policy is designed to minimize current costs of service while encouraging development of cost saving innovations we find that under optimal regulation i innovation is encouraged by light handed regulation allowing the monopolist to earn greater information rents while providing greater service ii innovation occurs in the absence of long term agreements when private information is recurring and iii innovation is more rapid in a durable franchise and the regulator prefers durable franchises for exploiting learning economies

partially verifiable information and mechanism design in a principal agent model with adverse selection we study the implementation of social choice functions when the agent s message space is a correspondence which depends on this true characteristic we characterize such correspondence for which the revelation principle is valid returns must not contradict easily observable elements of the taxpayer s lifestyle in this paper we present a model of two person organizations in which these considerations are important we ask whether the restrictions on fallacious statements inherent in the system are sufficient to achieve the goals of the organization we show that the optimal way of eliciting the agent s response may not be to establish incentives for truthtelling in all instances in our model there is one player the agent who observes the state of the economic system another player the principal takes an action based on the information presented to him by the agent this class of models is often referred to as the principal agent problem in the extensive and growing literature on this problem it has always been assumed that the agent could lie to the principal and therefore that he had to be properly motivated to act at least partially in the principal s interest our formal way of modelling the partial verifiability of information is to introduce the restriction that the agent s responses must lie in a set m o that varies with the true state 0 it is assumed that this set always admits the possibility of responding with the true state the way in which the allowable response set varies with the true state is known to the principal in other respects we retain the usual principal agent formalization in particular the principal is the stackelberg leader in this game he can commit himself to choose a collective action as a function of the message transmitted by the agent whether the variation of the message space with the true observation is purely technological or whether it is induced by the severity of potential actions of the principal

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

an error corrected almost ideal demand system for major cereals in kenya despite significant progress in theory and empirical methods the analysis of food consumption patterns in developing countries particularly those in sub saharan africa ssa has received very limited attention an attempt is made in this article to estimate an error corrected almost ideal demand system for four major cereals consumed in kenya employing annual data from 1963 to 2005 this demand system performs well on both theoretical and empirical grounds the symmetry and homogeneity conditions are supported by the data and the le chatelier principle holds empirically all own price elasticities are negative and significant at 5 level and irrespective of the time horizon maize wheat rice and sorghum may be considered as necessities in kenya while the expenditure elasticities of all four cereals are positive they are inelastic both in the short run and in the long run finally wheat and rice complement maize consumption in kenya while sorghum acts as a substitute since cereal consumers have price and income inelastic responses a combination of income and price oriented policies could improve cereal consumption in kenya

regulating a monopolist with unknown costs we consider the problem of how to regulate a monopolistic firm whose costs are unknown to the regulator the regulator s objective is to maximize a linear social welfare function of the consumers surplus and the firm s profit in the optimal regulatory policy prices and subsidies are designed as functions of the firm s cost report so that expected social welfare is maximized subject to the constraints that the firm has nonnegative profit and has no incentive to misrepresent its costs we explicitly derive the optimal policy and analyze its properties in their classic papers dupuit 2 and hotelling 5 considered pricing policies for a bridge that had a fixed cost of construction and zero marginal cost they demonstrated that the pricing policy that maximizes consumer well being is to set price equal to marginal cost and to provide a subsidy to the supplier equal to the fixed cost so that a firm would be willing to provide the bridge this first best solution is based on a number of informational assumptions first the demand function is assumed to be known to both the regulator and to the firm while the assumption of complete information may be too strong the assumption that information about demand is as available to the regulator as it is to the firm does not seem unnatural a second informational assumption is that the regulator has complete information about the cost of the firm or at least has the same information about cost as does the firm this assumption is unlikely to be met in reality since the firm would be expected to have better information about costs than would the regulator as weitzman has stated an essential feature of the regulatory environment i am trying to describe is uncertainty about the exact specification of each firm s cost function in most cases even the managers and engineers most closely associated with production will be unable to precisely specify beforehand the cheapest way to generate various hypothetical output levels because they are yet removed from the production process the regulators are likely to be vaguer still about a firm s cost function 12 p 684 as this observation suggests it is natural to expect that a firm would have better information regarding its costs than would a regulator the purpose of this paper is to develop an optimal regulatory policy for the case in which the regulator does not know the costs of the firm one strategy that a regulator could use in the absence of full information about costs is to give the firm the title to the total social surplus and to delegate the pricing decision to the firm in pursuing its own interests which would then be to maximize the total social surplus the firm would adopt the same marginal cost pricing strategy that the regulator would have imposed if the regulator had

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

willingness to pay and price elasticities of demand for energy efficient appliances combining the hedonic approach and demand systems abstract this article proposes a combined approach for estimating willingness to pay for the attributes represented by energy efficiency labels and providing reliable price elasticities of demand own and cross for close substitutes e g those with low energy efficiency and those with higher energy efficiency this is done by using the results of the hedonic approach together with the quantity based demand system qbds model the elasticity results obtained with the latter are then compared with those simulated using the linear almost ideal demand system la aids the methodology is applied to the dishwasher market in spain it is found that 15 6 of the final price is actually paid for the energy efficiency attribute this accounts for about 80 of the average market price the elasticity results confirm that energy efficient appliances are more price elastic than regular ones

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

distributional effects of maize price increases in malawi abstractin the wake of highly volatile world prices of staple commodities we examine the impacts of increases in maize prices on various categories of households in malawi using household level data changes in household income are calculated taking into account the net maize production status of the household and food price elasticities estimated from a censored demand system while maize price increases have unequivocal deleterious effects on the incomes of urban households rural households experience differential impacts net producing households in rural areas benefit from price increases with households above the poverty line obtaining proportionally higher incomes

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

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

assessing health reform in colombia from theory to practice in 1993 colombia implemented an ambitious health reform its key component was a radical transformation of the manner in which health care provision particularly care that was directed toward lower income individuals was financed we first describe the institutional aspects of the reform and discuss the difficulties that transferring funding from supply to demand side channels entailed we emphasize that while the reform substantially increased health insurance coverage progress was slower than forecast and entailed a substantial increase in expenditure the second part of the paper evaluates the impact of the subsidized regime that the reform introduced to benefit the low income population we explore the subsidized regime s effect on health outcomes measured through self reports on health status and on the number of days in which individuals were unable to perform regular activities the use of medical services household consumption of nonhealth goods and labor force participation

simple cost sharing contracts we extend rogerson s 2003 intriguing analysis of the performance of simple procurement contracts to consider settings where the supplier s innate production cost is not necessarily distributed uniformly although the simple contract that rogerson analyzes performs remarkably well when the smaller cost realizations are relatively likely it can perform poorly when the larger cost realizations are relatively likely we show that in all settings under consideration though a fairly simple pair of contracts one that involves linear cost sharing and one that involves full cost reimbursement can always secure more than 73 of the gain achieved with a fully optimal contract

monopolistic screening under learning by doing this article investigates the design of incentives in a dynamic adverse selection framework where agents production technologies display learning effects and agents learning rates are private knowledge in a simple two period model with full commitment available to the principal we show that whether learning effects are over or underexploited crucially depends on whether more effcient agents also learn faster so costs diverge through learning effects or whether it is the less effcient agents who learn faster so costs converge we further show that an overexploitation of learning effects can occur also if the full commitment assumption is relaxed

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

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

optimal resource royalties with unknown and temporally independent extraction cost structures the authors study optimal nonrenewable resource royalty contracts when the extracting agent has private information on costs this is a dynamic incentive problem in which the repeated relationship between the principal and the agent is constrained by initial reserves commitment is limited to one period and costs are intertemporally independent compared with full information extraction information asymmetry shifts production to the future when the optimal contract requires exhaustion in two periods when exhaustion by all types in two periods is not warranted the effect on the terminal period is ambiguous and the output of even the lowest cost firm is always distorted copyright 1995 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

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

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

private storage of common property abstract many resources extracted under the rule of capture are not utilized immediately but are stored instead for later use oil is stockpiled fish are frozen groundwater is bottled rivers are dammed land deforested as the way to establish title remains uncultivated we examine the positive and normative effects of such storage privatization of common property through storage may eliminate inefficiencies altogether but the accelerated extraction it induces may also exacerbate them even if rapid extraction does not reduce ultimate recovery once storage commences extraction accelerates until the open access reserves are drained in limiting cases these speculative acquisitions are instantaneous the naturally occurring analogue of policy induced speculative attacks studied in the international finance literature when some reserves are privately owned while others are open access the order of extraction no longer follows the progression from lowest to highest per unit cost first noted by o c herfindahl in extractive resources and taxation m gaffney ed univ of wisconsin press madism 1997 instead the common property may be extracted in its entirety before any private reserves are extracted even if it has the higher per unit extraction cost

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

health insurance eligibility utilization of medical care and child health two economists applied data from the current population survey and the national health interview survey and state level data on child mortality to a simulation model of utilization of medical care that varies only with the states legislative environment to examine the utilization of medical care and health effects of medicaid eligibility on low income children the models took into consideration the recent expansions of medicaid to low income children 38 of those ineligible for medicaid in 1984 who became eligible due to changes during 1984 1992 were uninsured between 1984 and 1992 expansions of the medicaid program increased the proportion of children eligible for medicaid almost two fold 16 1 vs 31 2 yet coverage rates were always lower than eligibility rates 13 2 vs 16 1 in 1984 and 20 3 vs 31 2 in 1992 and the increase in coverage rates was only about 50 of the increase in eligibility rates during 1984 1992 the probability that a child was eligible for medicaid increased the probability of health insurance coverage by 29 77 when the model considered bias in variables e g a recession in a state the take up rate was only 22 73 nevertheless medicaid markedly increased use of medical care for example eligibility for medicaid increased the likelihood of making a visit to a physicians office in the last two weeks by about 50 it also increased the probability of a child visiting the hospital suggesting inefficiency in the way that providers deliver care to medicaid enrollees medicaid eligibility had a significant effect on reducing child mortality the 15 1 percentage point increase in eligibility during 1984 1992 reduced child mortality by 4 5 when the researchers examined parent assessed subjective health measures medicaid eligibility had no effect on child health medicaid eligibility reduced race and education based disparities in the number of visits and racial differences in mortality yet it may actually intensify current disparities in health care delivery site