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Demand Elasticity (demand + elasticity)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	91%

Selected Abstracts

US aggregate demand for clothing and shoes: effects of non-durable expenditures, price and demographic changes

INTERNATIONAL JOURNAL OF CONSUMER STUDIES, Issue 2 2003
Kisung KimArticle first published online: 4 MAR 200
Abstract The main objective of this study was to evaluate the effects of the changes in total non-durables expenditures, prices and US demographics on demand for different clothing categories and shoes in a time-series framework. The basis for the demand model was the almost ideal demand system model. Demographic variables included in the model were age distribution of US population (median age and variance) and proportion of non-white population to the total US population. The results indicate that total non-durable expenditures and price variables are significantly related to consumers' non-durable budget allocations for clothing categories and shoes. The results of the study also show that, among the demographic variables examined in the study, the median age and non-white population were significant variables affecting US aggregate non-durable expenditure allocation on men's and boy's clothing and shoes. All the demand elasticities with respect to total expenditures, own, cross-price and demographics were also estimated. [source]

Household vegetable demand in the Philippines: Is there an urban-rural divide?

AGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 4 2007
Maria Erlinda M. Mutuc
A Nonlinear Quadratic Almost Ideal Demand System (NQAIDS) that accounts for censoring and endogeneity problems is used to assess the vegetable demand behavior of rural and urban households in the Philippines. Detailed household consumption data for a number of vegetable commodities are utilized in the analysis. The results show that most of the expenditure and own-price elasticities of the vegetables analyzed are near or larger than unitary in both rural and urban areas. For majority of the vegetable commodities examined, only the expenditure elasticity is significantly different between rural and urban households. On the other hand, own-price and cross-price elasticities of most vegetables do not significantly differ between rural and urban households. The disaggregate vegetable demand elasticities in this study, as well as the insights from the rural/urban comparisons, provide valuable information that can be utilized for the analysis and design of various food-related policies in the Philippines. [JEL Classification: R21; Q11] © 2007 Wiley Periodicals, Inc. Agribusiness 23: 511,527, 2007. [source]

Estimating price and income elasticities in the presence of age-cohort effects

AGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 2 2006
Hiroshi Mori
Individual consumption of most food products varies by age, and in countries like Japan that have experienced drastic social and economic changes during the past several decades, it also differs from generation to generation. Unless proper measures are taken to account for these factors, estimates of demand elasticities could be severely biased. In this study, individual consumption of fresh fruit was derived from Japanese household data classified by age of household head for the years 1979,2001. Individual consumption was then decomposed by age, cohort, and period effects using Bayesian cohort analysis. Pure period effects thus determined were regressed against changes in price and income, to obtain less biased estimates for demand parameters than non- or partially age-compensated analysis. [Econlit citations: Q110]. © 2006 Wiley Periodicals, Inc. Agribusiness 22: 201,217, 2006. [source]

Oil demand in transportation sector in Iran: an efficiency and income asymmetric modelling approach

OPEC ENERGY REVIEW, Issue 4 2007
Mohammad Mazraati
The transportation sector in Iran consumed about 52 per cent of oil demand in 2005. This high consumption rate of oil in the sector is fuelled by many factors including fiscal policies structural, as well as infrastructural factors. The vehicle ownership (intensity), efficiency of vehicles, public transportation, transport infrastructure, per capita income, cost of vehicle use, and fuel prices are among the factors which are shaping the trend of oil demand in this very important sector. Energy in Iran is heavily subsidized and in the transportation sector, the subsidy amounted to $3.59 billion in 1996, rising to $12.43 billion in 2005. Logistic model of vehicle ownership is estimated as a function of real per capita income, length of roads and other explanatory variables. Per capita income is a cumulative non-declining variable incorporating the idea of income asymmetric. Oil demand is estimated as a function of fuel efficiency, age of car fleet, per capita income and vehicle ownership per 1,000 inhabitants. Oil demand elasticities of vehicle ownership and fuel efficiency are 1.29 and 1.11, respectively, confirming that these variables have major impacts on oil demand in the transportation sector. It is concluded that rationing of fuel or upward price adjustment merely cannot curb the fast growth of oil demand in the sector. A policy package including mandatory fuel efficiency standards, scraping of old vehicles, upward fuel price, and development of public transportation could lead to better management of fuel consumption in this sector. [source]

Multinational companies, backward linkages, and labour demand elasticities

CANADIAN JOURNAL OF ECONOMICS, Issue 1 2009
Holger Görg
Abstract This paper investigates the link between nationality of ownership and wage elasticities of labour demand at the level of the plant. In particular, we examine whether labour demand in multinationals becomes less elastic with respect to the wage if the plant has backward linkages with the local economy. Our empirical evidence, based on a rich plant level dataset, shows that the extent of local linkages does indeed generally reduce the wage elasticity of labour demand. This result is economically important and holds for a number of different specifications. Ce mémoire étudie le lien entre la nationalité de la propriété et les élasticités de la demande de travail par rapport aux salaires au niveau de l'établissement. En particulier, on examine si la demande de travail dans les multinationales devient moins élastique par rapport aux salaires si l'établissement a des effets en amont sur l'économie locale. Les résultats, construits à partir d'une base de données très riche au niveau de l'établissement, montrent que l'importance des effets locaux en amont réduit l'élasticité de la demande de travail par rapport aux salaires. Ces résultats sont importants au plan économique et sont robustes pour un nombre de spécifications différentes. [source]

Optimal feeder bus routes on irregular street networks

JOURNAL OF ADVANCED TRANSPORTATION, Issue 2 2000
Steven Chien
The methodology presented here seeks to optimize bus routes feeding a major intermodal transit transfer station while considering intersection delays and realistic street networks. A model is developed for finding the optimal bus route location and its operating headway in a heterogeneous service area. The criterion for optimality is the minimum total cost, including supplier and user costs. Irregular and discrete demand distributions, which realistically represent geographic variations in demand, are considered in the proposed model. The optimal headway is derived analytically for an irregularly shaped service area without demand elasticity, with non-uniformly distributed demand density, and with a many-to-one travel pattern. Computer programs are designed to analyze numerical examples, which show that the combinatory type routing problem can be globally optimized. The improved computational efficiency of the near-optimal algorithm is demonstrated through numerical comparisons to an optimal solution obtained by the exhaustive search (ES) algorithm. The CPU time spent by each algorithm is also compared to demonstrate that the near-optimal algorithm converges to an acceptable solution significantly faster than the ES algorithm. [source]

Advertising's effect on the market demand elasticity: A note

AGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 2 2004
Henry W. Kinnucan
Using a simple market model and Frisch's duality relation, this report develops propositions about the relationship between advertising and the market demand elasticity that may prove useful in empirical research. In particular, we find that a parallel shift in a linear demand function always alters the market demand elasticity unless supply is unitary elastic. However, the elasticity change in most cases will be negligible. We also find that curve rotation does not imply that the demand elasticity has changed, and vice versa. Lastly, if the price level affects advertising's ability to shift the market demand curve, it must also be true that advertising affects the demand elasticity. The converse is also true, i.e., if advertising affects the demand elasticity, the price level must affect advertising's ability to shift the demand curve. [JEL citations: Q130, Q170, Q180.] © 2004 Wiley Periodicals, Inc. Agribusiness 20: 181,188, 2004. [source]

A MODEL OF MONOPOLISTIC COMPETITION WITH PERSONAL INCOME DISPERSION

METROECONOMICA, Issue 3 2005
Corrado Benassi
ABSTRACT We introduce non-homothetic preferences in the Dixit,Stiglitz model of monopolistic competition, and enquire about the effects of a change in income dispersion on the firms' optimal decisions and market equilibrium. Income dispersion, modeled as a mean preserving spread, is shown to affect only the degree of product differentiation under the standard negligibility hypothesis on the firms' decision making process, while it generates a positive co-movement of demand and demand elasticity, when this assumption is removed and the price index effect is taken into account. [source]

Pareto-Improving Redistribution in a Monopoly

THE JAPANESE ECONOMIC REVIEW, Issue 2 2003
Jacques Thépot
This paper discusses the impact of income transfers between consumers of a monopoly. In this context, redistributing the incomes could induce an increase of the demand elasticity which leads to a lower monopoly price, beneficial to any consumer. Under mild assumptions on the demand function, we prove the existence of a transfer maximizing the market coverage which remains advantageous for any contributing consumer. It is proved that the producer is also better off. Then the transfer is Pareto-improving. In the linear demand case, analytical results are found. Extensions to Cournot oligopoly and natural monopoly pricing are considered. JEL Classification Numbers: D31, D64, H2, L13 [source]

Income Distribution, Price Elasticity and the ,Robinson Effect'

THE MANCHESTER SCHOOL, Issue 5 2004
Corrado Benassi
In The Economics of Imperfect Competition, Joan Robinson argued that an increase of the consumers' incomes should make demand less elastic,which, although reasonable about individual demand as an assumption on preferences, suggests a role for income distribution as far as market demand is concerned. We use Esteban's (International Economic Review, Vol. 27 (1986), No. 2, pp. 439,444) income share elasticity to provide sufficient conditions on income distribution that support the ,Robinson effect',i.e. such that a negative (positive) relationship between individual income and price elasticity translates into a negative (positive) relationship between mean income and market demand elasticity. The paper also provides a framework to study the effects of distributive shocks on the price elasticity of market demand. [source]