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Demand Models (demand + models)

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Business, Economics, Finance and Accounting100%

Selected Abstracts

Latent Separability: Grouping Goods without Weak Separability

ECONOMETRICA, Issue 1 2000
Richard Blundell
This paper develops a new concept of separability with overlapping groups,latent separability. This is shown to provide a useful empirical and theoretical framework for investigating the grouping of goods and prices. It is a generalization of weak separability in which goods are allowed to enter more than one group and where the composition of groups is identified by the choice of group specific exclusive goods. Latent separability is shown to be equivalent to weak separability in latent rather than purchased goods and provides a relationship between separability and household production theory. For the popular class of linear, almost ideal and translog demand models and their generalizations, we provide a method for choosing the number of homothetic separable groups. A detailed method for exploring the composition of the separable groups is also presented. These methods are applied to a long time series of British individual household data on the consumption of twenty two nondurable and service goods. [source]

Tourism demand response by residents of Latin American countries

INTERNATIONAL JOURNAL OF TOURISM RESEARCH, Issue 1 2009
Manuel Vanegas Sr
Abstract A general-to-specific methodology was used to build international tourism demand models by residents from Argentina, Brazil, Colombia and Venezuela to Aruba. We seek to evaluate demand parameters, especially elasticity values, which were disaggregated on a country-to-country basis. We also aim to learn more about the structure and important variables and investigate the process of adjustment. The study has provided new and compelling evidence that, in the short run, residents in developing countries respond rationally and substantially to economic stimulus. The short-run income elasticity ranges from the low of 1.52 for Venezuela to the high of 2.34 for Argentina. These results indicate that Aruba will benefit differently from income increases in these four Latin American countries. The coefficients of the price variable had the expected negative signs, inelastic in the short-run for all countries but significant at the 5% level for Venezuela only. Any deliberate effort to expand tourist arrivals will require a much larger decline in prices than would be the case in the presence of short-run elastic response. The adjustment elasticity, being less than one, suggests that a period of more than one year is required for Latin American residents to fully adjust their tourism decisions in response to demand shocks. This study would seem to provide some useful information about international tourism demand from developing to developing countries that could form a very good and solid basis for analyses and policy action. Copyright © 2008 John Wiley & Sons, Ltd. [source]

Quadratic Differential Demand Systems and the Retail Demand for Pork in Great Britain

JOURNAL OF AGRICULTURAL ECONOMICS, Issue 3 2003
Panos Fousekis
The primary objective of this paper is to derive a general synthetic quadratic (rank 3) differential demand system which nests within it a range of testable differential demand models including the quadratic AIDS, CBS, Rotterdam and NBR systems. A model selection test procedure is also outlined. These differential systems are then applied and tested to analyse the monthly retail demand for cuts of pork in Great Britain over the period 1989,2000. The empirical results suggest that a quadratic differential AIDS model is most appropriate for the pork demand system studied, but that the need for inclusion of quadratic income/expenditure terms is not universal for every cut within the demand system. Quadratic expenditure effects were appropriate for pork chops and leg roasts, but log linear expenditure effects were adequate for bellies, shoulders and loin roasts. Roasting cuts were expenditure and own price elastic, with pork loins, chops and bellies all expenditure and own price inelastic. [source]

Food Import Demand in the Czech Republic

JOURNAL OF AGRICULTURAL ECONOMICS, Issue 1 2000
Karel Janda
This paper provides an overview of Czech food import demand in the transition period of the 1990s. It provides econometric estimates of own- and cross-price elasticities as well as group expenditure elasticities of Czech import demand for sixteen lower level and four upper level food groups. Based on the Hausman test for endogeneity, which supported the hypothesis that Czech import prices were exogenously determined outside of the Czech economy, we estimated five demand models as direct-demand systems of the AIDS type. The econometric estimation of elasticities used bimonthly data from March 1993 to August 1997. [source]

Econometric evidence of cross-market effects of generic dairy advertising

AGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 1 2010
Metin Cakir
We estimate a dairy demand system to evaluate generic dairy advertising in the US, 1990,2005. Previous empirical studies of generic dairy advertising focus only on the market of the advertised good, ignoring potential spill-over and feedback effects. We specify an LA/AIDS model of dairy demand, which allows consistent estimation of cross-price and cross-advertising effects across dairy product markets, and is flexible and satisfies the axioms of consumer theory. We use the non-linear 3SLS estimator to address endogenous prices and serial correlation, and conduct bootstrapping to generate empirical distributions of elasticity estimates. Results suggest that cross-market effects are economically and statistically important. Thus, econometric dairy demand models that ignore cross-advertising and cross-price effects are mis-specified. Previous work that ignores substitution between fluid milk and cheese overstates producers' returns to generic advertising for either product. © 2010 Wiley Periodicals, Inc. [source]

Constrained price, address, or logit brand demand models: An econometric comparison in the Boston fluid milk market

AGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 2 2005
Li Tian
This article estimates a general linear demand model for three fluid milk brands. It finds perverse signs and complementarity among these substitutes. We develop three constrained models to eliminate perverse signs: a price conduct constraint in the linear model that links private label and Garelick pricing, a generalized Mills address model, and the logit model. Statistical tests indicate that each of the three constrained models produces acceptable substitution patterns and that none is preferred to the other two. On nonstatistical grounds, however, the Mills and price-constrained models perform best. This is the first empirical study of the Mills address model of private-label pricing. Finally, we demonstrate that estimated price-reaction functions and the corresponding total elasticities, which capture only strategic non-collusive interaction in these Nash Bertrand models, provide interesting insight into competition among brands. EconLit citation: L670, L130.] © 2005 Wiley Periodicals, Inc. Agribusiness 21: 149,166, 2005. [source]

Intra-Household Resource Allocation, Consumer Preferences and Commodity Tax Reforms: Australian Evidence

THE ECONOMIC RECORD, Issue 247 2003
Paul Blacklow
Empirical analysis of household expenditure behaviour has traditionally ignored the issue of resource allocation between household members, assuming that they have identical or unitary preferences. This paper relaxes that assumption, develops a household sharing rule and proposes intra-household demand systems that are able to identify differences in the preferences of members from conventional data. The resulting price and expenditure elasticities are used to demonstrate that collective demand models suggest different directions for commodity tax reforms to those implied by the traditional unitary model. [source]

Lifetime Earnings, Discount Rate, Ability and the Demand for Post,compulsory Education in Men in England and Wales

BULLETIN OF ECONOMIC RESEARCH, Issue 3 2002
Daniel JohnsonArticle first published online: 16 DEC 200
Human capital theory suggests educational investments are made based on expected returns over the lifetime. Most other work in this field, particularly using British data, is based on demand models estimated in reduced form, with no earnings measures, or crudely constructed earnings measures, based on one or two earnings observations per individual. We present a structural model of demand for educational investment which includes estimates of earnings paths for educational options as determinants of educational choice. This provides us with directly interpretable parameter estimates. The discount rate is also determined within our demand model. Ability controlled earnings profiles are estimated by matching individuals from the General Household Survey to individuals in similar occupations from the National Child Development Survey (NCDS). Our results show that expected earnings profiles vary according to observed ability and educational choice. Results from the demand model show that expected lifetime earnings have a significant impact on educational choice. Other socio,demographic factors, particularly social class, also exhibit significant influences on the education decision. We estimate the discount rate to be lower than reported in other studies. [source]