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Income Elasticities (income + elasticity)
Selected AbstractsThe income elasticity of tax revenue: estimates for income and consumption taxes in the United KingdomFISCAL STUDIES, Issue 1 2004John Creedy Abstract This paper provides estimates of individual and aggregate revenue elasticities of income and consumption taxes in the UK over the period 1989,2000. It shows how budgetary changes, including changes to income-related deductions, have substantially affected income elasticities. The estimates of consumption tax revenue elasticities show that changes in consumption patterns over time are important. A merit of the approach used here is that elasticity estimates can be calculated readily from official published sources. [source] Explaining the differences in income-related health inequalities across European countriesHEALTH ECONOMICS, Issue 7 2004Eddy van Doorslaer Abstract This paper provides new evidence on the sources of differences in the degree of income-related inequalities in self-assessed health in 13 European Union member states. It goes beyond earlier work by measuring health using an interval regression approach to compute concentration indices and by decomposing inequality into its determining factors. New and more comparable data were used, taken from the 1996 wave of the European Community Household Panel. Significant inequalities in health (utility) favouring the higher income groups emerge in all countries, but are particularly high in Portugal and , to a lesser extent , in the UK and in Denmark. By contrast, relatively low health inequality is observed in the Netherlands and Germany, and also in Italy, Belgium, Spain Austria and Ireland. There is a positive correlation with income inequality per se but the relationship is weaker than in previous research. Health inequality is not merely a reflection of income inequality. A decomposition analysis shows that the (partial) income elasticities of the explanatory variables are generally more important than their unequal distribution by income in explaining the cross-country differences in income-related health inequality. Especially the relative health and income position of non-working Europeans like the retired and disabled explains a great deal of ,excess inequality'. We also find a substantial contribution of regional health disparities to socio-economic inequalities, primarily in the Southern European countries. Copyright © 2004 John Wiley & Sons, Ltd. [source] AN EMPIRICAL SURVEY OF RESIDENTIAL WATER DEMAND MODELLINGJOURNAL OF ECONOMIC SURVEYS, Issue 5 2008Andrew C. Worthington Abstract The increased reliance on demand-side management policies as an urban water consumption management tool has stimulated considerable debate among economists, water utility managers, regulators, consumer interest groups and policymakers. In turn, this has fostered an increasing volume of literature aimed at providing best-practice estimates of price and income elasticities, quantifying the impact of non-price water restrictions and gauging the impact of non-discretionary environmental factors affecting residential water demand. This paper provides a synoptic survey of empirical residential water demand analyses conducted in the last 25 years. Both model specification and estimation and the outcomes of the analyses are discussed. [source] Household demand analysis of organic and conventional fluid milk in the United States based on the 2004 Nielsen Homescan panelAGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 3 2010Pedro A. Alviola IV Using the 2004 AC Nielsen panel consisting of over 38,000 households, the authors ascertain the influence of selected demographic variables associated with the purchase of organic fluid milk through the estimation of a probit model. From the use of the Heckman two-step procedure, they also calculate own-price, cross-price, and income elasticities by estimating demand relationships for both organic and conventional milk. They find that demographic factors play a crucial role in the household choice of purchasing organic milk. Furthermore, households are more sensitive to own-price changes in the case of organic milk versus conventional milk. Evidence from estimated cross-price elasticities indicates that organic and conventional milk are substitutes. However, quantities purchased of organic milk are more sensitive to changes in prices of conventional milk than vice versa. Consequently, an asymmetric pattern exists with regard to the substitution patterns of the respective milk types. Moreover, evidence indicates that organic milk is responsive to income changes, but conventional milk is not responsive to income changes. Finally, a 1% increase in the price of organic milk reduces total milk sales by 0.20%, but a 1% increase in the price of conventional milk raises total milk sales by 0.31%. [EconLit citations: C25, D12]. © 2010 Wiley Periodicals, Inc. [source] Estimating price and income elasticities in the presence of age-cohort effectsAGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 2 2006Hiroshi 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] Underlying consumer preferences and their contribution to energy demandOPEC ENERGY REVIEW, Issue 3-4 2009Olutomi I. Adeyemi The demand for energy is not simply a function of price and income, but can be shown to also be a function of the underlying energy demand trend (UEDT). The UEDT not only captures behavioural responses to non-fiscal instruments, including technological change, but also encapsulates attitudinal responses/changes in demand that might result, for instance, from increased public awareness of how environmentally damaging energy use can be; hence, reflecting underlying consumer preferences. This study estimates a longitudinal econometric model for the aggregate demand functions of a sample of 17 Organisation for Economic Co-operation and Development countries for the period 1960,2005. This approach to modelling will enable UEDTs to be observed for each of the countries, as well as normal price and income elasticities. The model results will provide an indication of the extent to which price/income-based instruments can be used to reduce the demand for energy, as well as indicating the extent to which consumers have responded to non-price/income instruments. [source] Aviation fuel demand modelling in OECD and developing countries: impacts of fuel efficiencyOPEC ENERGY REVIEW, Issue 1 2009Mohammad Mazraati On the quest for reducing the fuel consumption per passenger per flight for economical and environmental reasons, commercial aircraft manufacturers are implementing new strategies for optimising aircraft performance by using new lighter and stronger materials and enhancing engines' efficiencies in terms of fuel consumption and maintenance requirements. With the rising and falling of economies, whether in the Organization for Economic Cooperation and Development (OECD) countries or other developing countries, the aviation industry has been affected by multiple factors such as passenger traffic, freight traffic, airport capacities and oil prices. Aircraft manufacturers have worked on improving the engine efficiency of their newly built airplanes (e.g. Airbus's A-380 and Boeing's B-787), and many airports in the world have increased the number of their runways to face the increasing demand for air traffic in the world. Aviation efficiency can also be achieved through better load management, which in return enables airliners to cope with higher oil prices or rising costs. Aviation fuel demand is modelled in OECD North America, Europe and Pacific regions and some selected developing countries. Price elasticities of fuel demand in all regions are low, while income elasticities are high. The elasticity of aviation fuel demand on passenger kilometre performed (PKP) is considerably low. One per cent increase in PKP leads to less than half a per cent increase in aviation fuel demand, confirming an ongoing fuel efficiency in aviation industry. [source] The demand for electricity in PakistanOPEC ENERGY REVIEW, Issue 1 2009Muhammad Arshad Khan This paper examines the patterns of electricity demand in Pakistan over the period 1970,2006 using autoregressive distributed lag technique to cointegration. Long run and short-run price and income elasticities are examined for the national level and for the three major consumer's categories,households, industry and agriculture. The overall results suggest that income and price elasticities possess expected signs at aggregate and disaggregate levels in the long run as well as in the short run. The error correction terms possess expected negative signs and are highly significant with reasonable magnitudes. Furthermore, the estimated long run and short-run electricity demand functions remains stable over the sample period. The results thus convey important information to the agents operating in the electricity market regarding the pricing policies and helps in planning the future strategy of electricity demand management. [source] Calorie intake and income elasticities in EU countries: A convergence analysis using cointegration,PAPERS IN REGIONAL SCIENCE, Issue 2 2001Ana M. Angulo European food demand; calorie intake; cointegration; convergence Abstract. We want to determine here whether the trans-European consumer reacts to changes in total food consumption or changes in income equalise in the long run. Do total calorie intake elasticities and income elasticities converge in the long-run? A demand system is estimated for each European country. The proportional caloric intakes of the various food groups are analyzed as endogenous variables, and two exogenous variables (total calorie intake and income), are both defined in log terms. As all variables are I(1) and non-cointegrated, demand systems are specified in first differences. Finally, we use Johansen and Juselius's multivariate cointegration tests to test for the convergence of calorie intake and income elasticities. Empirical results indicate a very limited convergence between certain products and countries considered, suggesting that country idiosyncrasies still play an important role in consumer behavior. [source] The income elasticity of meat: a meta-analysisAUSTRALIAN JOURNAL OF AGRICULTURAL & RESOURCE ECONOMICS, Issue 4 2010Craig A. Gallet The demand for meat has been estimated by many studies utilizing various data and estimation methods. In this study, we perform a meta-analysis of the income elasticity of meat that involves regressing 3357 estimated income elasticities, collected from 393 studies, on variables that control for study characteristics. Across several meta-regression specifications, we find significant differences in income elasticities tied to the type of meat being studied, as well as a few functional forms, data aggregations, publication characteristics, and locations of demand. However, many study characteristics do not significantly influence reported income elasticities. Less concern should be given to such characteristics when choosing an income elasticity from the literature. [source] A Simple Test of Friedman's Permanent Income HypothesisECONOMICA, Issue 289 2006JOSEPH P. DEJUAN Friedman's Permanent Income Hypothesis (PIH) predicts that the income elasticity of consumption should be higher for households for which a large fraction of the variation of their income is permanent than for households facing more transitory variations in income. We test this prediction using modern household data from the US Consumer Expenditure Survey. The results offer some support for the PIH. [source] The stabilization properties of fixed and floating exchange rate regimesINTERNATIONAL JOURNAL OF FINANCE & ECONOMICS, Issue 2 2004Keith Pilbeam Abstract This paper investigates the price and output stabilization properties of fixed and floating exchange rates using a small open economy model. The performance of the two regimes is compared in the face of money demand, aggregate demand and aggregate supply shocks. It is shown that the ranking of the two regimes is extremely sensitive to the weighting of the objective function as between price and output stability, the type of shock impinging upon the economy, the values of structural parameters of the economy and institutional features such as the degree of wage indexation within the economy. The results obtained suggest that estimates of the income elasticity of money demand, the elasticity of aggregate demand to changes in both the real exchange rate and the real interest rate, and the degree of openness of the economy are likely to be important to policymakers when making the choice of exchange rate regime. Neither regime can be said to be dominant in all circumstances. Copyright © 2004 John Wiley & Sons, Ltd. [source] The Tax Incidence of Lotteries: Evidence from Five StatesJOURNAL OF CONSUMER AFFAIRS, Issue 2 2000ANN HANSEN The nature of revenue generation for state-sponsored lotteries has been an issue of public debate for quite some time. Although most studies have found lotteries to have a regressive tax incidence, several have concluded otherwise. Unfortunately, the vast majority of academic studies address this concern by examining the tax incidence of only one state's lottery and/or by using only one time period's data. In addition, many assessments of the tax impact of lotteries fail to consider other demographic variables that may influence purchase patterns and, thus, be of interest to policymakers. To remedy this, the current paper assesses the incidence of the lottery excise tax for five states using county level data spanning multiple years. Also assessed are changes in incidence across demographic groups as the lotteries matured. Lottery tax incidence is assessed with multiple regression estimates of the income elasticity of demand for lottery products. The predominant finding is that the lottery tax for these states had a regressive incidence. Otherwise, few consistencies in either change in lottery tax incidence or purchase patterns across demographic variables were found. [source] THE DEMAND FOR BEER, WINE AND SPIRITS: A SURVEY OF THE LITERATUREJOURNAL OF ECONOMIC SURVEYS, Issue 3 2010James Fogarty Abstract The demand for alcohol literature is vast and much conflicting information about the nature of the demand for alcoholic beverages has been published. This paper presents a survey of the literature, and then uses the technique of meta-regression analysis to establish insights into the nature of the demand for beer, wine and spirits. Unlike previous meta-studies of the demand for alcoholic beverages this study adjusts for the precision of each elasticity estimate. The analysis presented suggests reported elasticity estimates will be influenced by such factors as estimation technique, data frequency and time period under consideration. With respect to time, the findings suggest that the demand for alcoholic beverages has become less inelastic since the mid-1950s and that the income elasticity has been falling since the mid-1960s. The analysis also found support for the idea that alcohol as a commodity group is a necessity, and that consumers respond to price discounting with inventory behaviour rather than true substitution behaviour. Little support is found for the idea that the demand for alcoholic beverages varies fundamentally across most countries, although wine may be an exception. [source] Willingness to pay for a hearing aid: comparing the payment scale and open-ended questionJOURNAL OF EVALUATION IN CLINICAL PRACTICE, Issue 1 2009Janneke P. C. Grutters MSc Abstract Rationale & objectives, Different question formats elicit different willingness-to-pay (WTP) results, but there is no consensus on which method elicits the most valid WTP. In spite of the methodological controversies, WTP is a potentially valuable tool in health economics to value health services. Our general objective was to provide additional evidence on the validity of two WTP elicitation formats: the open-ended question and the payment scale. Methods, We elicited WTP for a hearing aid among hearing aid users (n = 108), using both a payment scale and an open-ended question. We compared the results from both formats. We tested criterion validity by comparing both formats with the actual out-of-pocket payment. Construct validity was tested by examining whether WTP was consistent with positive income elasticity. Results, The WTP results elicited with the payment scale and open-ended question were not statistically significantly different. Both formats showed good criterion validity, although the open-ended question showed a stronger association with the actual out-of-pocket payment. The open-ended format showed better construct validity, as it was influenced by family income. Conclusion, The results of the present study showed that the open-ended question was more valid than the payment scale question. We, therefore, recommend that in future WTP studies on hearing aids the open-ended question is used to directly elicit WTP values. The same recommendation may apply to other studies where respondents are familiar with costs or payments for the intervention under evaluation. [source] Does increase in women's income relative to men's income increase food calorie intake in poor households?AGRICULTURAL ECONOMICS, Issue 3-4 2010Evidence from Nigeria Nigeria; Intrahousehold redistribution of income; Women's income share elasticity; Calorie consumption Abstract This article addresses the important but not widely investigated question of how calorie consumption in African low-income households would respond to intrahousehold redistribution of income from men to women. Specifically, I use survey data on a sample of 480 households from semirural areas of south-western Nigeria to analyze the response of per capita calorie intake to changes in women's share of household income, after controlling for per capita income and demographic characteristics at individual, household, and community levels. I also examine the effect of marginal increases in household income on per capita calorie intake conditional on the income distribution factor: women's share of income. My results suggest that redistributing household income from men to women would neither raise per capita food energy intake nor increase the quality of food calorie source of households in rural south-western Nigeria. I also find that while the income elasticity of quantity of calorie intake is close to zero, income elasticity for quality of calorie intake is substantially positive. I conclude that neither gender-neutral household income increases nor redistribution of household income in favor of women would substantially motivate increased amounts of food energy intake within households in the population under study. However, gender neutral increase in household income is likely to substantially increase the household demand for high-quality food calorie sources. [source] The Effect of Income Distribution on the Ability of Growth to Reduce Poverty: Evidence from Rural and Urban African EconomiesAMERICAN JOURNAL OF ECONOMICS AND SOCIOLOGY, Issue 3 2010Augustin Kwasi Fosu The present study examines the extent to which income distribution affects the ability of economic growth to reduce poverty, based on 1990s data for a sample of rural and urban sectors of African economies. Using the basic-needs approach, an analysis-of-covariance model is derived and estimated, with the headcount, gap, and squared gap poverty ratios serving as the respective dependent variables, and the Gini coefficient and PPP-adjusted incomes as explanatory variables. The study finds that the responsiveness of poverty to income growth is a decreasing function of inequality, albeit at varying rates for the three poverty measures: lowest for the headcount, followed by the gap and fastest for the squared gap. The ranges for the income elasticity in the sample are estimated at: 0.02,0.68, 0.11,1.05, and 0.10,1.35, respectively, for these poverty measures. Furthermore while, on average, the responsiveness of poverty to income growth appears to be the same between the rural and urban sectors, there are substantial sectoral differences across countries. The results suggest the need for country-specific emphases on growth relative to inequality. [source] Transportation demand for petroleum products in Indonesia: a time series analysisOPEC ENERGY REVIEW, Issue 2 2009Suleiman Sa'ad This paper used annual time series data for the period 1973 to 2007 in two econometric techniques [the structural time series model (STSM) and unrestricted error correction model (UECM)] developed to estimate petroleum products (gasoline and diesel) and demand functions for the transportation sector of Indonesia and make a forecast of per capita consumption of the total products until the year 2030 under three scenarios. The results from both models revealed that the demand for petroleum products are price inelastic, with an estimated long-run price elasticity of ,0.19 in the STSM and ,0.16 in the UECM. However, total petroleum is income elastic in the long run with a long-run income elasticity of 0.97 under the STSM and 0.88 in the UECM. The estimated demand functions are used to construct a projection of future transportation demand for petroleum products until 2030 under three alternative scenarios: business as usual, low case scenario and high case scenario. The results of this exercise suggests that by 2030, the demand for total petroleum products per capita for Indonesia will increase to about 0.498 toe in the STSM and 0.476 toe in the UECM under the baseline scenario, 0.197 toe in the STSM and 0.186 toe in the UECM under low case scenario and finally, 0.976 toe in the STSM and 0.886 toe under high case scenario. [source] Dynamics of petroleum markets in OECD countries in a monthly VAR,VEC model (1995,2007)OPEC ENERGY REVIEW, Issue 1 2008Mehdi Asali This paper contains some results of a study in which the dynamics of petroleum markets in the Organization for Economic Cooperation and Development (OECD) is investigated through a vector auto regression (VAR),vector error correction model. The time series of the model comprises the monthly data for the variables demand for oil in the OECD, WTI in real term as a benchmark oil price, industrial production in OECD as a proxy for income and commercial stocks of crude oil and oil products in OECD for the time period of January 1995 to September 2007. The detailed results of this empirical research are presented in different sections of the paper; nevertheless, the general result that emerges from this study could be summarised as follows: (i) there is convincing evidence of the series being non-stationary and integrated of order one I(1) with clear signs of co-integration relations between the series; (ii) the VAR system of the empirical study appears stable and restores its dynamics as usual, following a shock to the rate of changes of different variables of the model, taking between five and eight periods (months in our case); (iii) we find the lag length of 2 as being optimal for the estimated VAR model; (iv) significant impact of changes in the commercial crude and products' inventory level on oil price and on demand for oil is highlighted in our empirical study and in different formulations of the VAR model, indicating the importance of the changes in the stocks' level on oil market dynamics; and (v) income elasticity of deman for oil appears to be prominent and statistically significant in most estimated models of the VAR system in the long run, while price elasticity of demand for oil is found to be negligible and insignificant in the short run. However, while aggregate oil consumption does not appear to be very sensitive to the changes of oil prices (which is believed to be because of the so-called ,rebound effect' of oil (energy) efficiency in the macro level) in the macro level, the declining trend of oil intensity (oil used for production of unit value of goods and services), particularly when there is an upward trend in oil price, clearly indicates the channels through which persistent changes in oil prices could affect the demand for oil in OECD countries. [source] Oil demand in North America: 1980-2020OPEC ENERGY REVIEW, Issue 4 2001Salman Saif Ghouri This paper first analyses price and income elasticity of oil demand in the United States, Canada and Mexico for the period 1980-99. Economic activity is the main driving force that influences oil consumption in each country. Changes in oil consumption generally lagged by a few years before the full impact of changes in oil prices was realized. Consumers in the short run are constrained by technological and other barriers and, therefore, less sensitive to changes in oil prices; however, they are more responsive in the long run , though response is still inelastic. The use of advanced technology facilitated these countries to use less oil over time. The paper then looks at demand over the next 20 years. The best-fitting model predicts that, by the end of 2020 (reference case), the USA, Canada and Mexico will respectively consume 24,900, 2,596 and 2,321 thousand barrels daily, compared with 19,519, 1,943 and 1,970 thousand b/d in 1999. The model forecasts economic slowdown during 2000/2002. The USA and Canada are expected to recover quickly, while Mexico will take longer. [source] BENCHMARK TWO-GOOD UTILITY FUNCTIONS,THE MANCHESTER SCHOOL, Issue 1 2008Article first published online: 21 DEC 200, KRIS DE JAEGHER Benchmark two-good utility functions involving a good with zero income elasticity and unit income elasticity are familiar. In this paper we derive utility functions for the additional benchmark cases where one good has zero cross-price elasticity, unit own-price elasticity and zero own-price elasticity. It is shown how each of these utility functions arises from a simple graphical construction based on a single given indifference curve. Also, it is shown that possessors of such utility functions may be seen as thinking in a particular sense of their utility, and may be seen as using simple rules of thumb to determine their demand. [source] The income elasticity of meat: a meta-analysisAUSTRALIAN JOURNAL OF AGRICULTURAL & RESOURCE ECONOMICS, Issue 4 2010Craig A. Gallet The demand for meat has been estimated by many studies utilizing various data and estimation methods. In this study, we perform a meta-analysis of the income elasticity of meat that involves regressing 3357 estimated income elasticities, collected from 393 studies, on variables that control for study characteristics. Across several meta-regression specifications, we find significant differences in income elasticities tied to the type of meat being studied, as well as a few functional forms, data aggregations, publication characteristics, and locations of demand. However, many study characteristics do not significantly influence reported income elasticities. Less concern should be given to such characteristics when choosing an income elasticity from the literature. [source] | ||||||||||||||||||||||||||||