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Sample records for price elasticity income

  1. Brazilian sawn wood price and income elasticity

    Directory of Open Access Journals (Sweden)

    Rommel Noce

    2010-09-01

    Full Text Available This study estimated the sawn wood demand price and income elasticity. Specifically it was estimated the priceelasticity of sawn wood, the cross price elasticity of wood panels and the income elasticity of Brazilian GDP. A log-log model withcorrection through outline of the mobile average (MA(1 was used, adjusted for the period of 1971 to 2006, which showed to bestable, with satisfactory significance levels. It was observed that sawn wood demand is inelastic in relation to price and elastic inrelation to income.

  2. Price and Income Elasticities of Russian Exports

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    Bernardina Algieri

    2004-12-01

    Full Text Available The paper gauges export demand elasticities for Russia using an Error Correction technique within a cointegration framework. An extended version of the Imperfect Substitutes Model has been implemented to estimate the sensitivity of Russian exports without oil components to price and to Russian and world income. Our results suggest a robust and negative long run cointegration relationship between the real effective exchange rate, defined as the weighted average of the rouble’s exchange rates versus a basket of the three currencies with the largest share in the trade turnover adjusted to incorporate inflation rate differences (the ratio of the domestic price indices to the foreign price indices, and Russian exports. An increase in exports by 24% is caused by a real depreciation by 10%. Furthermore, a 10% growth in world income leads to a 33% rise in exports. Finally, exports drop by 14% whenever a 10% increase in domestic income occurs

  3. Measuring global gasoline and diesel price and income elasticities

    International Nuclear Information System (INIS)

    Dahl, Carol A.

    2012-01-01

    Price and income elasticities of transport fuel demand have numerous applications. They help forecast increases in fuel consumption as countries get richer, they help develop appropriate tax policies to curtail consumption, help determine how the transport fuel mix might evolve, and show the price response to a fuel disruption. Given their usefulness, it is understandable why hundreds of studies have focused on measuring such elasticities for gasoline and diesel fuel consumption. In this paper, I focus my attention on price and income elasticities in the existing studies to see what can be learned from them. I summarize the elasticities from these historical studies. I use statistical analysis to investigate whether income and price elasticities seem to be constant across countries with different incomes and prices. Although income and price elasticities for gasoline and diesel fuel are not found to be the same at high and low incomes and at high and low prices, patterns emerge that allow me to develop suggested price and income elasticities for gasoline and diesel demand for over one hundred countries. I adjust these elasticities for recent fuel mix policies, and suggest an agenda of future research topics. - Research highlights: ► Surveyed econometric studies of transport fuel demand. ► Developed price elasticities of demand for gasoline and diesel fuel for 120 countries. ► Developed income elasticities of demand for gasoline and diesel fuel for 120 countries. ► Suggested a research agenda for future work.

  4. Price and income elasticities of residential energy demand in Germany

    International Nuclear Information System (INIS)

    Schulte, Isabella; Heindl, Peter

    2017-01-01

    We apply a quadratic expenditure system to estimate price and expenditure elasticities of residential energy demand (electricity and heating) in Germany. Using official expenditure data from 1993 to 2008, we estimate an expenditure elasticity for electricity of 0.3988 and of 0.4055 for space heating. The own price elasticity for electricity is −0.4310 and −0.5008 in the case of space heating. Disaggregation of households by expenditure and socio-economic composition reveals that the behavioural response to energy price changes is weaker (stronger) for low-income (top-income) households. There are considerable economies of scale in residential energy use but scale effects are not well approximated by the new OECD equivalence scale. Real increases in energy prices show a regressive pattern of incidence, implying that the welfare consequences of direct energy taxation are larger for low income households. The application of zero-elasticities in assessments of welfare consequences of energy taxation strongly underestimates potential welfare effects. The increase in inequality is 22% smaller when compared to the application of disaggregated price and income elasticities as estimated in this paper. - Highlights: • We estimate price, income, and expenditure elasticities for residential energy demand in Germany. • We differentiate elasticities by income groups and household type. • Electricity and space heating are necessary goods since the expenditure elasticities are smaller than unity. • Low-income households show a weaker reaction to changing prices when compared to high-income households. • Direct energy taxation has regressive effects, meaning that larger burdens fall upon low-income households.

  5. Relationship between the Uncompensated Price Elasticity and the Income Elasticity of Demand under Conditions of Additive Preferences.

    Science.gov (United States)

    Sabatelli, Lorenzo

    2016-01-01

    Income and price elasticity of demand quantify the responsiveness of markets to changes in income and in prices, respectively. Under the assumptions of utility maximization and preference independence (additive preferences), mathematical relationships between income elasticity values and the uncompensated own and cross price elasticity of demand are here derived using the differential approach to demand analysis. Key parameters are: the elasticity of the marginal utility of income, and the average budget share. The proposed method can be used to forecast the direct and indirect impact of price changes and of financial instruments of policy using available estimates of the income elasticity of demand.

  6. Relationship between the Uncompensated Price Elasticity and the Income Elasticity of Demand under Conditions of Additive Preferences.

    Directory of Open Access Journals (Sweden)

    Lorenzo Sabatelli

    Full Text Available Income and price elasticity of demand quantify the responsiveness of markets to changes in income and in prices, respectively. Under the assumptions of utility maximization and preference independence (additive preferences, mathematical relationships between income elasticity values and the uncompensated own and cross price elasticity of demand are here derived using the differential approach to demand analysis. Key parameters are: the elasticity of the marginal utility of income, and the average budget share. The proposed method can be used to forecast the direct and indirect impact of price changes and of financial instruments of policy using available estimates of the income elasticity of demand.

  7. Analysis of price and income elasticities for cereals food crops in an ...

    African Journals Online (AJOL)

    The objective of the study is to estimate the price and income elasticities of cereals food crops in the study area. The results of the price and income elasticities of demand suggest that urban households in general are responsive to changes in own price and income in adjusting their consumption patterns. It was shown that ...

  8. Income inequality and price elasticity of market demand: the case of crossing Lorenz curves

    OpenAIRE

    Ibragimov, M; Ibragimov, R; Kattuman, Paul Antony; Ma, J

    2017-01-01

    This paper extends Ibragimov and Ibragimov (Econ Theory 32:579–587, 2007) in which the effect of changes income inequality on the price elasticity of market demand is characterized for the class of income distribution changes occurring through non-intersecting Lorenz curve shifts. We derive sufficient conditions for increase/decrease in price elasticity of market demand, under general changes in income distribution, allowing Lorenz curves to intersect as they shift. We conclude by drawing out...

  9. Price and income elasticities of demand for alcoholic beverages.

    Science.gov (United States)

    Ornstein, S I; Levy, D

    1983-01-01

    Estimating the demand for alcoholic beverages represents a difficult statistical problem. A number of studies have attempted to estimate the demand for beer, wine, distilled spirits, or total alcohol consumption. The results vary widely according to country of study, data used, and model and statistical technique. For the United States, most studies find the demand for beer to be relatively price inelastic, at around -0.3. The demand for distilled spirits appears to be unitary price elasticity or somewhat greater, around -1.5. The evidence on wine is too sketchy to draw any conclusions. There is no strong evidence of substitutability among beer, wine, and distilled spirits based on econometric models, nor evidence that advertising plays a strong role in the aggregate demand for beer, wine, or distilled spirits. The main policy implication is that price increases to control consumption will have a stronger impact on the consumption of distilled spirits than on beer.

  10. Trends in income and price elasticities of transport demand (1850–2010)

    International Nuclear Information System (INIS)

    Fouquet, Roger

    2012-01-01

    The purpose of this paper is to estimate trends in income and price elasticities and to offer insights for the future growth in transport use, with particular emphasis on the impact of energy and technological transitions. The results indicate that income and price elasticities of passenger transport demand in the United Kingdom were very large (3.1 and −1.5, respectively) in the mid-nineteenth century, and declined since then. In 2010, long run income and price elasticity of aggregate land transport demand were estimated to be 0.8 and −0.6. These trends suggest that future elasticities related to transport demand in developed economies may decline very gradually and, in developing economies, where elasticities are often larger, they will probably decline more rapidly as the economies develop. Because of the declining trends in elasticities, future energy and technological transitions are not likely to generate the growth rates in energy consumption that occurred following transitions in the nineteenth century. Nevertheless, energy and technological transitions, such as the car and the airplane, appear to have delayed and probably will delay declining trends in income and price elasticity of aggregate transport demand. - Highlights: ► Estimates trends in income and price elasticities of aggregate UK land transport demand (1850–2010). ► Income and price elasticities were very large in late 1800s and declined since then. ► In 2010, they were estimated to be 0.8 and −0.6. ► Future elasticities are likely to decline gradually in developed economies and faster in developing economies. ► Energy transitions may delay the decline in elasticities.

  11. Income and price elasticities of electricity demand: Aggregate and sector-wise analyses

    International Nuclear Information System (INIS)

    Jamil, Faisal; Ahmad, Eatzaz

    2011-01-01

    Cointegration and vector error correction modeling approaches are widely used in electricity demand analysis. The study rigorously examines the determinants of electricity demand at aggregate and sectoral levels in Pakistan. In the backdrop of severe electricity shortages, our empirical findings give support to the existence of a stable long-run relationship among the variables and indicate that electricity demand is elastic in the long run to both income and price at aggregate level. At sectoral level, long-run income and price elasticity estimates follow this pattern except in agricultural sector, where electricity demand is found elastic to output but inelastic to electricity price. On the contrary, the coefficients for income and price are rather small and mostly insignificant in the short run. We employed temperature index, price of diesel oil and capital stock at aggregate and sectoral levels as exogenous variables. These variables account for most of the variations in electricity demand in the short run. It shows that mechanization of the economy significantly affect the electricity demand at macro level. Moreover, elastic electricity demand with respect to electricity price in most of the sectors implies that electricity price as a policy tool can be used for efficient use and conservation. - Highlights: → The study conducts analysis for aggregate and four sectors. → Sectoral analyses are for residential, commercial, manufacturing and agricultural sectors. → We obtained higher positive income and negative price elasticity in the long run. → The higher price elasticity implies that price can be used as a policy tool. → Capital stock and temperature variables explain most of the short-run demand fluctuations.

  12. Income and price elasticities of electricity demand: Aggregate and sector-wise analyses

    Energy Technology Data Exchange (ETDEWEB)

    Jamil, Faisal, E-mail: fsljml@hotmail.com [School of Economics, Quaid-e-Azam University, Islamabad (Pakistan); Ahmad, Eatzaz, E-mail: eatzaz@qau.edu.pk [School of Economics, Quaid-e-Azam University, Islamabad (Pakistan)

    2011-09-15

    Cointegration and vector error correction modeling approaches are widely used in electricity demand analysis. The study rigorously examines the determinants of electricity demand at aggregate and sectoral levels in Pakistan. In the backdrop of severe electricity shortages, our empirical findings give support to the existence of a stable long-run relationship among the variables and indicate that electricity demand is elastic in the long run to both income and price at aggregate level. At sectoral level, long-run income and price elasticity estimates follow this pattern except in agricultural sector, where electricity demand is found elastic to output but inelastic to electricity price. On the contrary, the coefficients for income and price are rather small and mostly insignificant in the short run. We employed temperature index, price of diesel oil and capital stock at aggregate and sectoral levels as exogenous variables. These variables account for most of the variations in electricity demand in the short run. It shows that mechanization of the economy significantly affect the electricity demand at macro level. Moreover, elastic electricity demand with respect to electricity price in most of the sectors implies that electricity price as a policy tool can be used for efficient use and conservation. - Highlights: > The study conducts analysis for aggregate and four sectors. > Sectoral analyses are for residential, commercial, manufacturing and agricultural sectors. > We obtained higher positive income and negative price elasticity in the long run. > The higher price elasticity implies that price can be used as a policy tool. > Capital stock and temperature variables explain most of the short-run demand fluctuations.

  13. Price and income elasticities of crude oil import demand in South Africa. A cointegration analysis

    Energy Technology Data Exchange (ETDEWEB)

    Ziramba, Emmanuel [Department of Economics, University of South Africa, P.O Box 392, Unisa 0003 (South Africa)

    2010-12-15

    This paper examines the demand for imported crude oil in South Africa as a function of real income and the price of crude oil over the period 1980-2006. We carried out the Johansen co integration multivariate analysis to determine the long-run income and price elasticities. A unique long-run cointegration relationship exists between crude oil imports and the explanatory variables. The short-run dynamics are estimated by specifying a general error correction model. The estimated long-run price and income elasticities of -0.147 and 0.429 suggest that import demand for crude oil is price and income inelastic. There is also evidence of unidirectional long-run causality running from real GDP to crude oil imports. (author)

  14. Price and income elasticities of crude oil import demand in South Africa: A cointegration analysis

    Energy Technology Data Exchange (ETDEWEB)

    Ziramba, Emmanuel, E-mail: zirame@unisa.ac.z [Department of Economics, University of South Africa, P.O Box 392, Unisa 0003 (South Africa)

    2010-12-15

    This paper examines the demand for imported crude oil in South Africa as a function of real income and the price of crude oil over the period 1980-2006. We carried out the Johansen co integration multivariate analysis to determine the long-run income and price elasticities. A unique long-run cointegration relationship exists between crude oil imports and the explanatory variables. The short-run dynamics are estimated by specifying a general error correction model. The estimated long-run price and income elasticities of -0.147 and 0.429 suggest that import demand for crude oil is price and income inelastic. There is also evidence of unidirectional long-run causality running from real GDP to crude oil imports. - Research Highlights: {yields}The paper examines the demand for imported crude oil in South Africa over the period 1980-2006. {yields} The estimated long-run price and income elasticities are -0.147 and 0.429, respectively. {yields} There is evidence of unidirectional long-run causality running from real GDP to crude oil imports.

  15. Price and income elasticities of crude oil import demand in South Africa: A cointegration analysis

    International Nuclear Information System (INIS)

    Ziramba, Emmanuel

    2010-01-01

    This paper examines the demand for imported crude oil in South Africa as a function of real income and the price of crude oil over the period 1980-2006. We carried out the Johansen co integration multivariate analysis to determine the long-run income and price elasticities. A unique long-run cointegration relationship exists between crude oil imports and the explanatory variables. The short-run dynamics are estimated by specifying a general error correction model. The estimated long-run price and income elasticities of -0.147 and 0.429 suggest that import demand for crude oil is price and income inelastic. There is also evidence of unidirectional long-run causality running from real GDP to crude oil imports. - Research Highlights: →The paper examines the demand for imported crude oil in South Africa over the period 1980-2006. → The estimated long-run price and income elasticities are -0.147 and 0.429, respectively. → There is evidence of unidirectional long-run causality running from real GDP to crude oil imports.

  16. Price and Income Elasticity of Australian Retail Finance: An Autoregressive Distributed Lag (ARDL Approach

    Directory of Open Access Journals (Sweden)

    Helen Higgs

    2014-03-01

    Full Text Available This paper models the price and income elasticity of retail finance in Australia using aggregate quarterly data and an autoregressive distributed lag (ARDL approach. We particularly focus on the impact of the global financial crisis (GFC from 2007 onwards on retail finance demand and analyse four submarkets (period analysed in brackets: owneroccupied housing loans (Sep 1985–June 2010, term loans (for motor vehicles, household goods and debt consolidation, etc. (Dec 1988–Jun 2010, credit card loans (Mar 1990–Jun 2010, and margin loans (Sep 2000–Jun 2010. Other than the indicator lending rates and annual full-time earnings respectively used as proxies for the price and income effects, we specify a large number of other variables as demand factors, particularly reflecting the value of the asset for which retail finance demand is derived. These variously include the yield on indexed bonds as a proxy for inflation expectations, median housing prices, consumer sentiment indices as measures of consumer confidence, motor vehicle and retail trade sales, housing debt-to-housing assets as a measure of leverage, the proportion of protected margin lending, the available credit limit on credit cards, and the All Ordinaries Index. In the long run, we find significant price elasticities only for term loans and margin loans, and significant income elasticities of demand for housing loans, term loans and margin loans. We also find that the GFC only significantly affected the longrun demand for term loans and margin loans. In the short run, we find that the GFC has had a significant effect on the price elasticity of demand for term loans and margin loans. Expected inflation is also a key factor affecting retail finance demand. Overall, most of the submarkets in the analysis indicate that retail finance demand is certainly price inelastic but more income elastic than conventionally thought.

  17. Teaching Price, Income, and Cross Elasticity of Demand: Another Approach.

    Science.gov (United States)

    Zahka, William J.

    One of the most important, yet difficult concepts to teach in an undergraduate course in intermediate microeconomics is the all-embracing concept of elasticity of demand. This paper details a four part teaching approach developed to make this most important aspect of microeconomic theory more understandable. Part 1 develops the approach for…

  18. Price and income elasticities of demand for passenger transport fuels in Spain. Implications for public policies

    International Nuclear Information System (INIS)

    Romero-Jordan, Desiderio; Del Rio, Pablo; Jorge-Garcia, Marta; Burguillo, Mercedes

    2010-01-01

    The significant increase in passenger transport activity (cars) experienced by Spain and its associated increase in energy consumption have several associated negative aspects, including a greater dependence on foreign energy sources and higher GHG emissions. Therefore, reducing the level of transport activity would bring important socioeconomic and environmental benefits. The aim of this paper, which focuses on energy consumption in the passenger transport, is fourfold: (1) to provide a diagnostic of energy consumption in the Spanish passenger transport system and the related problems; (2) to develop a model to calculate price and income elasticities of demand for transport fuel; (3) to apply this model to the Spanish passenger transport sector; (4) to infer policy recommendations derived from the results of the diagnostic and the model. It is claimed that, in view of those low price elasticities and high income elasticities and if a reduction in the scale of transport activity is deemed socially desirable, a combination of instruments is necessary. Fuel taxes play an important role within this combination. Apart from their long-term effects, the low price elasticity of demand for transport fuel would allow the collection of a significant amount of revenues, which could eventually be earmarked to encourage reductions in private transport demand and modal shifts with other instruments. (author)

  19. Price and income elasticities of demand for passenger transport fuels in Spain. Implications for public policies

    Energy Technology Data Exchange (ETDEWEB)

    Romero-Jordan, Desiderio [Universidad Rey Juan Carlos, Madrid (Spain); Del Rio, Pablo [Institute for Public Goods and Policies (IPP), Consejo Superior de Investigaciones Cientificas (CSIC), C/Albasanz, 26-28, Madrid 28037 (Spain); Jorge-Garcia, Marta [Universidad de Leon (Spain); Burguillo, Mercedes [Universidad de Alcala (Spain)

    2010-08-15

    The significant increase in passenger transport activity (cars) experienced by Spain and its associated increase in energy consumption have several associated negative aspects, including a greater dependence on foreign energy sources and higher GHG emissions. Therefore, reducing the level of transport activity would bring important socioeconomic and environmental benefits. The aim of this paper, which focuses on energy consumption in the passenger transport, is fourfold: (1) to provide a diagnostic of energy consumption in the Spanish passenger transport system and the related problems; (2) to develop a model to calculate price and income elasticities of demand for transport fuel; (3) to apply this model to the Spanish passenger transport sector; (4) to infer policy recommendations derived from the results of the diagnostic and the model. It is claimed that, in view of those low price elasticities and high income elasticities and if a reduction in the scale of transport activity is deemed socially desirable, a combination of instruments is necessary. Fuel taxes play an important role within this combination. Apart from their long-term effects, the low price elasticity of demand for transport fuel would allow the collection of a significant amount of revenues, which could eventually be earmarked to encourage reductions in private transport demand and modal shifts with other instruments. (author)

  20. Industrial and residential electricity demand dynamics in Japan: How did price and income elasticities evolve from 1989 to 2014?

    International Nuclear Information System (INIS)

    Wang, Nan; Mogi, Gento

    2017-01-01

    This study estimates the price and income elasticities of industrial and residential electricity demand in Japan with the annual data from 1989 to 2014. A time varying parameter (TVP) model with the Kalman filter is applied to monitor the evolution of consumer behaviors in the “post-bubble” period given the exogenous shock (financial crisis in 2008) and the structural breaks (electricity deregulation and Fukushima Daiichi crisis). The TVP model can provide a robust estimation of elasticities and can detect the outliers and the structural breaks. The results suggest that both industrial and residential consumers become less sensitive to price after the electricity deregulation and the financial crisis, and more sensitive to price after the Fukushima Daiichi crisis. Especially the industrial sector is less sensitive to price after the retail deregulation. By contrast, the income elasticities of industrial and residential sector consumers are stable during the examined period. Results also indicate that a negative relationship exists between the price elasticity of electricity demand and the price level of electricity after the electric sector deregulation. Some insights on the further electric sector reform and the environmental taxation in Japan are also provided. - Highlights: • A time varying parameter model is calculated with the Kalman filter. • Income elasticities are stable while price elasticities are time-varying. • Industrial sector is less sensitive to price change than residential sector. • Negative relationship between price elasticity and price level is found.

  1. A co-integration analysis of the price and income elasticities of energy demand in Turkish agriculture

    International Nuclear Information System (INIS)

    Tuerkekul, Berna; Unakitan, Goekhan

    2011-01-01

    Agriculture has an important role in every country's development. Particularly, the contribution of agriculture to development and competitiveness is increasing with agricultural productivity growth. Productivity, in turn, is closely associated with direct and indirect use of energy as an input. Therefore, the importance of energy in agriculture cannot be denied as one of the basic inputs to the economic growth process. Following the importance of energy in Turkish agriculture, this study aims to estimate the long- and short-run relationship of energy consumption, agricultural GDP, and energy prices via co-integration and error correction (ECM) analysis. Annual data from 1970 to 2008 for diesel and electricity consumptions are utilized to estimate long-run and short-run elasticities. According to ECM analysis, for the diesel demand model, the long-run income and price elasticities were calculated as 1.47 and -0.38, respectively. For the electricity demand model, income and price elasticities were calculated at 0.19 and -0.72, respectively, in the long run. Briefly, in Turkey, support for energy use in agriculture should be continued in order to ensure sustainability in agriculture, increase competitiveness in international markets, and balance farmers' income. - Research highlights: → We estimate the long and short run elasticities for diesel and electricity demands in agriculture. → The long-run income and price elasticities calculated as 1.47 and 0.38, respectively for diesel. → The long run Income and price elasticities calculated as 0.19 and 0.72 for electricity.

  2. A co-integration analysis of the price and income elasticities of energy demand in Turkish agriculture

    Energy Technology Data Exchange (ETDEWEB)

    Tuerkekul, Berna, E-mail: berna.turkekul@ege.edu.t [Department of Agricultural Economics, Faculty of Agriculture, Ege University, 35100 Izmir (Turkey); Unakitan, Goekhan, E-mail: unakitan@nku.edu.t [Department of Agricultural Economics, Faculty of Agriculture, Namik Kemal University, Tekirdag (Turkey)

    2011-05-15

    Agriculture has an important role in every country's development. Particularly, the contribution of agriculture to development and competitiveness is increasing with agricultural productivity growth. Productivity, in turn, is closely associated with direct and indirect use of energy as an input. Therefore, the importance of energy in agriculture cannot be denied as one of the basic inputs to the economic growth process. Following the importance of energy in Turkish agriculture, this study aims to estimate the long- and short-run relationship of energy consumption, agricultural GDP, and energy prices via co-integration and error correction (ECM) analysis. Annual data from 1970 to 2008 for diesel and electricity consumptions are utilized to estimate long-run and short-run elasticities. According to ECM analysis, for the diesel demand model, the long-run income and price elasticities were calculated as 1.47 and -0.38, respectively. For the electricity demand model, income and price elasticities were calculated at 0.19 and -0.72, respectively, in the long run. Briefly, in Turkey, support for energy use in agriculture should be continued in order to ensure sustainability in agriculture, increase competitiveness in international markets, and balance farmers' income. - Research highlights: {yields} We estimate the long and short run elasticities for diesel and electricity demands in agriculture. {yields} The long-run income and price elasticities calculated as 1.47 and 0.38, respectively for diesel. {yields} The long run Income and price elasticities calculated as 0.19 and 0.72 for electricity.

  3. Estimates of price and income elasticity in Greece. Greek debt crisis transforming cigarettes into a luxury good: an econometric approach

    Science.gov (United States)

    Tarantilis, Filippos; Athanasakis, Kostas; Zavras, Dimitris; Vozikis, Athanassios; Kyriopoulos, Ioannis

    2015-01-01

    Objective During the past decades, smoking prevalence in Greece was estimated to be near or over 40%. Following a sharp fall in cigarette consumption, as shown in current data, our objective is to assess smokers’ sensitivity to cigarette price and consumer income changes as well as to project health benefits of an additional tax increase. Methods Cigarette consumption was considered as the dependent variable, with Weighted Average Price as a proxy for cigarette price, gross domestic product as a proxy for consumers’ income and dummy variables reflecting smoking restrictions and antismoking campaigns. Values were computed to natural logarithms and regression was performed. Then, four scenarios of tax increase were distinguished in order to calculate potential health benefits. Results Short-run price elasticity is estimated at −0.441 and short-run income elasticity is estimated at 1.040. Antismoking campaigns were found to have a statistically significant impact on consumption. Results indicate that, depending on the level of tax increase, annual per capita consumption could fall by at least 209.83 cigarettes; tax revenue could rise by more than €0.74 billion, while smokers could be reduced by up to 530 568 and at least 465 smoking-related deaths could be averted. Conclusions Price elasticity estimates are similar to previous studies in Greece, while income elasticity estimates are far greater. With cigarettes regarded as a luxury good, a great opportunity is presented for decisionmakers to counter smoking. Increased taxation, along with focused antismoking campaigns, law reinforcement (to ensure compliance with smoking bans) and intensive control for smuggling could invoke a massive blow to the tobacco epidemic in Greece. PMID:25564137

  4. Estimates of price and income elasticity in Greece. Greek debt crisis transforming cigarettes into a luxury good: an econometric approach.

    Science.gov (United States)

    Tarantilis, Filippos; Athanasakis, Kostas; Zavras, Dimitris; Vozikis, Athanassios; Kyriopoulos, Ioannis

    2015-01-05

    During the past decades, smoking prevalence in Greece was estimated to be near or over 40%. Following a sharp fall in cigarette consumption, as shown in current data, our objective is to assess smokers' sensitivity to cigarette price and consumer income changes as well as to project health benefits of an additional tax increase. Cigarette consumption was considered as the dependent variable, with Weighted Average Price as a proxy for cigarette price, gross domestic product as a proxy for consumers' income and dummy variables reflecting smoking restrictions and antismoking campaigns. Values were computed to natural logarithms and regression was performed. Then, four scenarios of tax increase were distinguished in order to calculate potential health benefits. Short-run price elasticity is estimated at -0.441 and short-run income elasticity is estimated at 1.040. Antismoking campaigns were found to have a statistically significant impact on consumption. Results indicate that, depending on the level of tax increase, annual per capita consumption could fall by at least 209.83 cigarettes; tax revenue could rise by more than €0.74 billion, while smokers could be reduced by up to 530 568 and at least 465 smoking-related deaths could be averted. Price elasticity estimates are similar to previous studies in Greece, while income elasticity estimates are far greater. With cigarettes regarded as a luxury good, a great opportunity is presented for decisionmakers to counter smoking. Increased taxation, along with focused antismoking campaigns, law reinforcement (to ensure compliance with smoking bans) and intensive control for smuggling could invoke a massive blow to the tobacco epidemic in Greece. Published by the BMJ Publishing Group Limited. For permission to use (where not already granted under a licence) please go to http://group.bmj.com/group/rights-licensing/permissions.

  5. Demand for natural gas from industries in Brazil: an estimate of the price elasticity, income elasticity and forecast for 2008-2012 using VEC (Vector Error Correction) Model; Demanda por gas natural no Brasil: um estudo sobre as elasticidades preco e renda de longo prazo do segmento industrial e estimativa para o periodo de 2008-2012 usando modelo VEC (Vector Error Correction)

    Energy Technology Data Exchange (ETDEWEB)

    Cabral, Renata [Universidade de Sao Paulo (USP), SP (Brazil). Faculdade de Economia e Administracao; Parente, Virginia [Universidade de Sao Paulo (USP), SP (Brazil). Inst. de Eletrotecnica e Energia

    2008-07-01

    The purpose of the present study is to estimate the long-run elasticities - manly price and income - of the demand for gas natural in the industrial category. After determining that the series under study were non-stationary, we chose to use the cointegration approach, estimating a Vector Error Correction Model (VEC Model). The obtained results show that the price elasticity for industrial sector in Brazil is higher than income elasticity. Although both of then is near to one, the price elasticity is higher that one unit while income elasticity is slightly lower. Predictions for the gas natural consumption in Brazil for industrials for 2008-2012 period are also made. (author)

  6. Income Elasticity of Environmental Amenities

    OpenAIRE

    Daniel Miles; Andrés Pereyra; Máximo Rossi

    2000-01-01

    In this paper we are concerned with the estimation of income elasticities of environmental amenities. The novelty is the application of econometric methods that take into account the problem of measurement errors when estimating these elasticities, which are common in microeconomic data and are not usually considered in the applied literature related with this issue. Our aim is to discuss whether the measurement error has signi…cant e¤ects on the elasticities. Data from the Expenditure Budget...

  7. Price Elasticities of Food Demand: Compensated vs Uncompensated.

    Science.gov (United States)

    Clements, Kenneth W; Si, Jiawei

    2016-11-01

    Two recent studies have provided a comprehensive review/summary of a large number of estimates of the price elasticity of food consumption using a meta-regression approach. In this letter, we introduce a way of removing the income effect from these elasticities to recover the compensated elasticities. Although the income effect is small, the compensated elasticities vary by income group. Both types of elasticity should possibly be considered when assessing the impact of policy changes on food consumption. Copyright © 2015 John Wiley & Sons, Ltd. Copyright © 2015 John Wiley & Sons, Ltd.

  8. Income Elasticity Literature Review

    Science.gov (United States)

    Following advice from the SAB Council, when estimating the economic value of reductions in air pollution-related mortality and morbidity risk, EPA accounts for the effect of personal income on the willingness to pay to reduce the risk of adverse health outcomes. These income grow...

  9. Money flexibility, price elasticity, and elasticity of marginal utility of consumption

    OpenAIRE

    Malakhov, Sergey

    2014-01-01

    The development of G.Stigler’s original model of search describes the mathematical relationship between the elasticity of the marginal utility of consumption, the price elasticity, and the elasticity of the marginal utility of money income with respect to increase in the price of living and/or to inflation. This relationship can be used not only in economics of well-being but also in microeconomics where the increase in the price of living, i.e., in purchase price, can make consumption “bad” ...

  10. New empirical generalizations on the determinants of price elasticity

    NARCIS (Netherlands)

    Bijmolt, THA; Van Heerde, HJ; Pieters, RGM

    The importance of pricing decisions for firms has fueled an extensive stream of research on price elasticities. In an influential meta-analytical study, Tellis (1988) summarized price elasticity research findings until 1986. However, empirical generalizations on price elasticity require

  11. Application Service Program (ASP) Price Elasticities

    OpenAIRE

    Hong Jaeweon; Cho Wanwoo; Jang Ho; Kwak Youngsik

    2010-01-01

    Although the price elasticities for off-line industry are well documented in academic field, the report of price elasticities for on-line to a given brand or industry in practice have beenrelatively rare. The researcher aims to try to full this gap by applying a price response function to Home Trading System’s on-line transaction data for the first time in Korean securities market. The different price elasticities among seven brands were found from -0.819 to -1.811. These results suggested th...

  12. Income Elasticity Literature Review | Science Inventory | US ...

    Science.gov (United States)

    Following advice from the SAB Council, when estimating the economic value of reductions in air pollution-related mortality and morbidity risk, EPA accounts for the effect of personal income on the willingness to pay to reduce the risk of adverse health outcomes. These income growth adjustment factors are calculated using a combination of income elasticity estimates and income growth projections, both of which have remained essentially unchanged since 1999. These income elasticity estimates vary according to the severity of illness. EPA recently received advice from the SAB regarding the range of income elasticities to apply as well as the research standards to use when selecting income elasticity estimates. Following this advice, EPA consulted with a contractor to update its income elasticity and income growth projections, and generate new income growth adjustment factors. The SAB would evaluate the income elasticity estimates identified in the EPA-provided literature review, determining the extent to which these estimates are appropriate to use in human health benefits assessments.

  13. Price elasticity of expenditure across health care services.

    Science.gov (United States)

    Duarte, Fabian

    2012-12-01

    Policymakers in countries around the world are faced with rising health care costs and are debating ways to reform health care to reduce expenditures. Estimates of price elasticity of expenditure are a key component for predicting expenditures under alternative policies. Using unique individual-level data compiled from administrative records from the Chilean private health insurance market, I estimate the price elasticity of expenditures across a variety of health care services. I find elasticities that range between zero for the most acute service (appendectomy) and -2.08 for the most elective (psychologist visit). Moreover, the results show that at least one third of the elasticity is explained by the number of visits; the rest is explained by the intensity of each visit. Finally, I find that high-income individuals are five times more price sensitive than low-income individuals and that older individuals are less price-sensitive than young individuals. Copyright © 2012 Elsevier B.V. All rights reserved.

  14. What Happens to Patterns of Food Consumption when Food Prices Change? Evidence from A Systematic Review and Meta-Analysis of Food Price Elasticities Globally.

    Science.gov (United States)

    Cornelsen, Laura; Green, Rosemary; Turner, Rachel; Dangour, Alan D; Shankar, Bhavani; Mazzocchi, Mario; Smith, Richard D

    2015-12-01

    Recent years have seen considerable interest in examining the impact of food prices on food consumption and subsequent health consequences. Fiscal policies targeting the relative price of unhealthy foods are frequently put forward as ways to address the obesity epidemic. Conversely, various food subsidy interventions are used in attempts to reduce levels of under-nutrition. Information on price elasticities is essential for understanding how such changes in food prices affect food consumption. It is crucial to know not only own-price elasticities but also cross-price elasticities, as food substitution patterns may have significant implications for policy recommendations. While own-price elasticities are common in analyses of the impact of food price changes on health, cross-price effects, even though generally acknowledged, are much less frequently included in analyses, especially in the public health literature. This article systematically reviews the global evidence on cross-price elasticities and provides combined estimates for seven food groups in low-income, middle-income and high-income countries alongside previously estimated own-price elasticities. Changes in food prices had the largest own-price effects in low-income countries. Cross-price effects were more varied and depending on country income level were found to be reinforcing, undermining or alleviating own-price effects. Copyright © 2014 John Wiley & Sons, Ltd.

  15. Meta-Analysis of Price Elasticity for Urban Domestic Water Consumption in Iran

    Directory of Open Access Journals (Sweden)

    Mina Tajabadi

    2018-03-01

    Full Text Available Price elasticity plays a critical role in determining water tariff and its system. Many economic decision makers and researchers have estimated demand function for different cities in order to predict the associated income and price elasticity. In this research we reviewed 20 studies on urban domestic water demand function from which 63 price elasticity values were obtained. Since the price elasticity values obtained from these studies had significant statistical differences, the aim of this research is to determine the effective factors in price elasticity values as well as to analyze differences in such values using meta-analysis technique. The meta-analysis technique focuses on variation in water price elasticity results. The statistical meta-analysis technique focuses on two main objectives of publication bias or publication heterogeneity in reported results. The results indicated that publication bias is negligible while publication heterogeneity is significant. The major factors affecting price elasticity values are classified into 4 categories including theoretical, model, data and socio-geographical specifications. The result indicated that variables such as income, time-series datasets, natural logarithm function and use of stone-geary theory which is the basis for predicting many domestic water demand functions, significantly overestimate the price elasticity values. Also the geographical condition of the region, population density and use of OLS technique to estimate the demand parameters underestimates the price elasticity values.

  16. Price Elasticity of Alcohol Demand in India.

    Science.gov (United States)

    Kumar, Santosh

    2017-05-01

    Using a household survey conducted in 2014, this study estimates price elasticity of demand (PED) for beer, country liquor and spirits in India. Ordinary least-square models were used to estimate the responsiveness in alcohol demand due to price change. A large number of control variables were included to adjust for potential confounding in the model. Inter-district variation in alcohol consumption is adjusted for by including district fixed effects. Alcohol prices are negatively associated with demand for alcoholic beverages. The PED ranged from -0.14 for spirits to -0.46 for country liquor. Low level of education was positively associated with spirits consumption. The magnitude of elasticity varied by rural-urban, education and gender. Results indicate that a policy mix of price controls and awareness campaigns would be most effective in tackling the adverse effects of harmful drinking in India. The demand for beer, country liquor and spirits is negatively associated with its own price. The elasticity estimates ranged from -0.14 for spirits to -0.44 for country liquor. The elasticity estimates varied by rural-urban, gender and by education levels of the drinkers. © The Author 2017. Medical Council on Alcohol and Oxford University Press. All rights reserved

  17. The price of fixed income market volatility

    CERN Document Server

    Mele, Antonio

    2015-01-01

    Fixed income volatility and equity volatility evolve heterogeneously over time, co-moving disproportionately during periods of global imbalances and each reacting to events of different nature. While the methodology for options-based "model-free" pricing of equity volatility has been known for some time, little is known about analogous methodologies for pricing various fixed income volatilities. This book fills this gap and provides a unified evaluation framework of fixed income volatility while dealing with disparate markets such as interest-rate swaps, government bonds, time-deposits and credit. It develops model-free, forward looking indexes of fixed-income volatility that match different quoting conventions across various markets, and uncovers subtle yet important pitfalls arising from naïve superimpositions of the standard equity volatility methodology when pricing various fixed income volatilities. The ultimate goal of the authors´ efforts is to make interest rate volatility standardization a valuable...

  18. Pricing perpetual American options under multiscale stochastic elasticity of variance

    International Nuclear Information System (INIS)

    Yoon, Ji-Hun

    2015-01-01

    Highlights: • We study the effects of the stochastic elasticity of variance on perpetual American option. • Our SEV model consists of a fast mean-reverting factor and a slow mean-revering factor. • A slow scale factor has a very significant impact on the option price. • We analyze option price structures through the market prices of elasticity risk. - Abstract: This paper studies pricing the perpetual American options under a constant elasticity of variance type of underlying asset price model where the constant elasticity is replaced by a fast mean-reverting Ornstein–Ulenbeck process and a slowly varying diffusion process. By using a multiscale asymptotic analysis, we find the impact of the stochastic elasticity of variance on the option prices and the optimal exercise prices with respect to model parameters. Our results enhance the existing option price structures in view of flexibility and applicability through the market prices of elasticity risk

  19. Nodal price volatility reduction and reliability enhancement of restructured power systems considering demand-price elasticity

    International Nuclear Information System (INIS)

    Goel, L.; Wu, Qiuwei; Wang, Peng

    2008-01-01

    With the development of restructured power systems, the conventional 'same for all customers' electricity price is getting replaced by nodal prices. Electricity prices will fluctuate with time and nodes. In restructured power systems, electricity demands will interact mutually with prices. Customers may shift some of their electricity consumption from time slots of high electricity prices to those of low electricity prices if there is a commensurate price incentive. The demand side load shift will influence nodal prices in return. This interaction between demand and price can be depicted using demand-price elasticity. This paper proposes an evaluation technique incorporating the impact of the demand-price elasticity on nodal prices, system reliability and nodal reliabilities of restructured power systems. In this technique, demand and price correlations are represented using the demand-price elasticity matrix which consists of self/cross-elasticity coefficients. Nodal prices are determined using optimal power flow (OPF). The OPF and customer damage functions (CDFs) are combined in the proposed reliability evaluation technique to assess the reliability enhancement of restructured power systems considering demand-price elasticity. The IEEE reliability test system (RTS) is simulated to illustrate the developed techniques. The simulation results show that demand-price elasticity reduces the nodal price volatility and improves both the system reliability and nodal reliabilities of restructured power systems. Demand-price elasticity can therefore be utilized as a possible efficient tool to reduce price volatility and to enhance the reliability of restructured power systems. (author)

  20. Differential Responsiveness to Cigarette Price by Education and Income among Adult Urban Chinese Smokers

    Science.gov (United States)

    Huang, Jidong; Zheng, Rong; Chaloupka, Frank J.; Fong, Geoffrey T.; Jiang, Yuan

    2015-01-01

    Background There are few studies that examine the impact of tobacco tax and price policies in China. In addition, very little is known about the differential responses to tax and price increases based on socioeconomic status in China. Objective The goal of this study is to estimate the conditional cigarette consumption price elasticity among adult urban smokers in China using individual level longitudinal survey data. We also examine the differential responses to cigarette price increases among groups with different income and/or educational levels. Methods Multivariate analyses using the general estimating equations (GEE) method were conducted to estimate the conditional cigarette demand price elasticity using data from the International Tobacco Control (ITC) China Survey, a longitudinal survey of adult smokers in seven cities in China. The first three waves of the ITC China Survey data were used in this analysis. Analyses based on subsample by education and income were conducted. Findings Our results show that overall conditional cigarette demand price elasticity ranges from −0.12 to −0.14, implying a 10% increase in cigarette price would result in a reduction in cigarette consumption among adult urban Chinese smokers by 1.2% to 1.4%. No differential responses to cigarette price increase were found across education levels. The price elasticity estimates do not differ between high income smokers and medium income smokers. However, cigarette consumption among low income smokers did not seem to decrease after a price increase, at least among those who continued to smoke. Conclusion Relative to many other low- and middle-income countries, cigarette consumption among Chinese adult smokers is not very sensitive to changes in cigarette prices. The total impact of cigarette price increase would be larger if its impact on smoking initiation and cessation, as well as the price-reducing behaviors such as brand switching and trading down, were taken into account. PMID

  1. Estimating price elasticities when there is smuggling: the sensitivity of smoking to price in Canada.

    Science.gov (United States)

    Gruber, Jonathan; Sen, Anindya; Stabile, Mark

    2003-09-01

    A central parameter for evaluating tax policies is the price elasticity of demand for cigarettes. But in many countries this parameter is difficult to estimate reliably due to widespread smuggling, which significantly biases estimates using legal sales data. An excellent example is Canada, where widespread smuggling in the early 1990s, in response to large tax increases, biases upwards the response of legal cigarette sales to price. We surmount this problem through two approaches: excluding the provinces and years where smuggling was greatest; and using household level expenditure data on smoking. These two approaches yield a tightly estimated elasticity in the range of -0.45 to -0.47. We also show that the sensitivity of smoking to price is much larger among lower income Canadians. In the context of recent behavioral models of smoking, whereby higher taxes reduce unwanted smoking among price sensitive populations, this finding suggests that cigarette taxes may not be as regressive as previously suggested. Finally, we show that price increases on cigarettes do not increase, and may actually decrease, consumption of alcohol; as a result, smuggling of cigarettes may have raised consumption of alcohol as well.

  2. [Price elasticity of demand for cigarettes and alcohol in Ecuador, based on household data].

    Science.gov (United States)

    Chávez, Ricardo

    2016-10-01

    Estimate price elasticity of demand for cigarettes and alcohol in Ecuador using cross-sectional data from the National Survey of Urban and Rural Household Income and Expenditures (ENIGHUR is the acronym in Spanish) 2011-2012. ENIGHUR 2011-2012 data were used with Deaton's (1, 2) methodology to estimate price elasticity of demand for cigarettes and alcohol with expenditure and quantity information. Household socioeconomic variables were also included. Price elasticity of demand for cigarettes is -0.87, meaning that a 10% price increase could lead to an 8.7% decrease in consumption. Results for cross-price elasticities of alcohol on cigarette demand are negative, as expected, indicating that they are complementary goods; however, the results are not statistically significant. Furthermore, it was found that price elasticity of demand for alcohol is -0.44, meaning that a 10% increase in the price of alcohol would produce a 4.4% decrease in consumption. A policy of price increases, for example, with a tax increase, applied to both cigarettes and alcohol, could have a positive effect on public health through reductions in consumption of both goods. However, this measure would not be sufficient to bridge gaps in prevalence measures and health outcomes between sex and other population groups, given the observed difference in the sensitivity of consumption to price variations.

  3. Are lower income smokers more price sensitive?: the evidence from Korean cigarette tax increases.

    Science.gov (United States)

    Choi, Seng Eun

    2016-03-01

    The cigarette excise taxes and the price of a typical pack of cigarettes in Korea have not increased since 2005, and effective tax rate as a fraction of price and real price of cigarettes have both been falling. As smoking prevalence is higher among lower income people than among higher income people in Korea, the regressivity of cigarette excise taxes is often cited as a barrier to tobacco tax and price policy. While studies in several other high-income countries have shown that higher income individuals are less price sensitive, few studies have examined the differential impact of cigarette tax increases by income group in Korea. Most of the Korean literature has estimated the demand for cigarettes using time-series aggregate sales data or household level survey data, which record household cigarette expenditures rather than individual cigarette consumption. Studies using survey data often lack time-series variation and estimate cigarette demand using household expenditure data, while studies using time-series aggregate sales data lack cross-sectional variation. I examine differences in the effects of cigarette price on the cigarette consumption of various income groups using individual-level cigarette consumption records from the Korea National Health and Nutrition Examination Survey (KHNNES). I also analyse the implications of cigarette taxes and price increases on the relative tax burdens of different income groups. I use pooled data from the KNHNES for the 1998-2011 period to estimate the price elasticity of cigarette consumption of four income groups. Treating cigarette consumption as a latent variable, I employ an econometric procedure that corrects for non-random sample selection, or the fact that some non-smokers might have smoked at a low enough price, and estimate the price elasticity of cigarette consumption by income group. The estimated price elasticities include the responsiveness of potential smokers as well as current smokers. Lower income Korean

  4. The real-time price elasticity of electricity

    NARCIS (Netherlands)

    Lijesen, M.G.

    2007-01-01

    The real-time price elasticity of electricity contains important information on the demand response of consumers to the volatility of peak prices. Despite the importance, empirical estimates of the real-time elasticity are hardly available. This paper provides a quantification of the real-time

  5. Price-elastic demand in deregulated electricity markets

    Energy Technology Data Exchange (ETDEWEB)

    Siddiqui, Afzal S.

    2003-05-01

    The degree to which any deregulated market functions efficiently often depends on the ability of market agents to respond quickly to fluctuating conditions. Many restructured electricity markets, however, experience high prices caused by supply shortages and little demand-side response. We examine the implications for market operations when a risk-averse retailer's end-use consumers are allowed to perceive real-time variations in the electricity spot price. Using a market-equilibrium model, we find that price elasticity both increases the retailers revenue risk exposure and decreases the spot price. Since the latter induces the retailer to reduce forward electricity purchases, while the former has the opposite effect, the overall impact of price responsive demand on the relative magnitudes of its risk exposure and end-user price elasticity. Nevertheless, price elasticity decreases cumulative electricity consumption. By extending the analysis to allow for early settlement of demand, we find that forward stage end-user price responsiveness decreases the electricity forward price relative to the case with price-elastic demand only in real time. Moreover, we find that only if forward stage end-user demand is price elastic will the equilibrium electricity forward price be reduced.

  6. Pharmaceutical pricing in emerging markets: effects of income, competition, and procurement.

    Science.gov (United States)

    Danzon, Patricia M; Mulcahy, Andrew W; Towse, Adrian K

    2015-02-01

    This paper analyzes determinants of ex-manufacturer prices for originator and generic drugs across countries. We focus on drugs to treat HIV/AIDS, TB, and malaria in middle and low-income countries (MLICs), with robustness checks to other therapeutic categories and the full income range of countries. We examine the effects of per capita income, income dispersion, competition from originator and generic substitutes, and whether the drugs are sold to retail pharmacies versus tendered procurement by non-government organizations. The cross-national income elasticity of prices is 0.27 across the full income range of countries but is 0.0-0.10 between MLICs, implying that drugs are least affordable relative to income in the lowest income countries. Within-country income inequality contributes to relatively high prices in MLICs. Although generics are priced roughly 30% lower than originators on average, the variance is large. Additional generic competitors only weakly affect prices, plausibly because generic quality uncertainty leads to competition on brand rather than price. Tendered procurement that imposes quality standards attracts multinational generic suppliers and significantly reduces prices of originator and generic drugs, compared with their respective prices to retail pharmacies. © 2013 The Authors Health Economics Published by John Wiley & Sons Ltd.

  7. The price elasticity of electricity demand in South Australia

    International Nuclear Information System (INIS)

    Fan Shu; Hyndman, Rob J.

    2011-01-01

    In this paper, the price elasticity of electricity demand, representing the sensitivity of customer demand to the price of electricity, has been estimated for South Australia. We first undertake a review of the scholarly literature regarding electricity price elasticity for different regions and systems. Then we perform an empirical evaluation of the historic South Australian price elasticity, focussing on the relationship between price and demand quantiles at each half-hour of the day. This work attempts to determine whether there is any variation in price sensitivity with the time of day or quantile, and to estimate the form of any relationships that might exist in South Australia. - Highlights: → We review the scholarly literature on electricity own-price elasticity for different regions and systems. → We use annual log-linear econometric models of the electricity demand to estimate the historic South Australian price elasticity. → We focus on the relationship between price and demand quantiles at each half-hour of the day. → The overall price elasticity in South Australia ranges from -0.363 to -0.428.

  8. Alcohol price elasticities in control and license states in the United States, 1982-99.

    Science.gov (United States)

    Trolldal, Björn; Ponicki, William

    2005-08-01

    The demand for alcohol has been demonstrated repeatedly to be sensitive to price changes. However, estimated price elasticities vary by study region and over time. One explanation for these variations might be that different countries or parts of countries have had different alcohol control systems. The hypothesis addressed in this study was that a regulated market leads to higher transaction costs associated with purchasing alcohol, which in turn increases the full price of the beverages (the nominal cash price plus transaction costs). As a result, the cash price of alcohol represents a smaller part of the full price in a highly regulated market. Assuming that customers respond primarily to changes in full price, the demand for alcohol should be less sensitive to changes in cash price where regulation is stricter. This study examined whether variations in price elasticities were a function of the different regulatory systems in control and license states in the United States during the period 1982-99. Time-series cross-sectional analyses (in 50 states over 18 years) were conducted. Elasticities were estimated using a multiplicative model based upon first-differences of time-series within states. Disposable income and other socio-demographic variables were used as control variables. All data were obtained from archival sources. The demand for spirits and beer were significantly more sensitive to price changes in license states than in control states. The estimated price elasticity for wine sales was also somewhat larger in license states, but not significantly so. The lower price elasticities for spirits and beer in the control states support the hypothesis that customers respond primarily to changes in the full price of alcohol.

  9. Price elasticity of petroleum products in selected African countries

    International Nuclear Information System (INIS)

    Kaul, S.

    1995-01-01

    In this paper, a fundamental understanding of the economic impact which is directly related to the price elasticity of petroleum products in six selected African countries is obtained by using the Jorgorson-Lian model for shares. Each kind of fuel price has a different impact on the share of oil products for the different countries. The price increase of one kind of fuel may increase or decrease the share of another fuel in the total oil products. In the oil importing African countries, the price of one product is relatively inelastic, whereas in the oil producing African countries, the price is elastic. (Author)

  10. Price elasticity of on- and off-premises demand for alcoholic drinks: A Tobit analysis.

    Science.gov (United States)

    Jiang, Heng; Livingston, Michael; Room, Robin; Callinan, Sarah

    2016-06-01

    Understanding how price policies will affect alcohol consumption requires estimates of the impact of price on consumption among different types of drinkers and across different consumption settings. This study aims to estimate how changes in price could affect alcohol demand across different beverages, different settings (on-premise, e.g., bars, restaurants and off-premise, e.g., liquor stores, supermarkets), and different levels of drinking and income. Tobit analysis is employed to estimate own- and cross-price elasticities of alcohol demand among 11 subcategories of beverage based on beverage type and on- or off-premise supply, using cross-sectional data from the Australian arm of the International Alcohol Control Survey 2013. Further elasticity estimates were derived for sub-groups of drinkers based on their drinking and income levels. The results suggest that demand for nearly every subcategory of alcohol significantly responds to its own price change, except for on-premise spirits and ready-to-drink spirits. The estimated demand for off-premise beverages is more strongly affected by own price changes than the same beverages in on-premise settings. Demand for off-premise regular beer and off-premise cask wine is more price responsive than demand for other beverages. Harmful drinkers and lower income groups appear more price responsive than moderate drinkers and higher income groups. Our findings suggest that alcohol price policies, such as increasing alcohol taxes or introducing a minimum unit price, can reduce alcohol demand. Price appears to be particularly effective for reducing consumption and as well as alcohol-related harm among harmful drinkers and lower income drinkers. Copyright © 2016 Elsevier Ireland Ltd. All rights reserved.

  11. A Note on Aggregate Price-Level Elasticity and Supply-Side Shocks.

    Science.gov (United States)

    Findlay, David W.

    1995-01-01

    Investigates factors that influence the short-run and long-run effects of supply-side shocks on aggregate income and tax revenues. Concludes that the long-run relationship between tax revenues and the tax rate is completely independent of price-level elasticity. (CFR)

  12. The real-time price elasticity of electricity

    International Nuclear Information System (INIS)

    Lijesen, Mark G.

    2007-01-01

    The real-time price elasticity of electricity contains important information on the demand response of consumers to the volatility of peak prices. Despite the importance, empirical estimates of the real-time elasticity are hardly available. This paper provides a quantification of the real-time relationship between total peak demand and spot market prices. We find a low value for the real-time price elasticity, which may partly be explained from the fact that not all users observe the spot market price. If we correct for this phenomenon, we find the elasticity to be fairly low for consumers currently active in the spot market. If this conclusion applies to all users, this would imply a limited scope for government intervention in supply security issues. (Author)

  13. Income Migration and Home Price Trajectories in the United States

    OpenAIRE

    Samuel M. Otterstrom

    2015-01-01

    This paper models one facet of the relationship between housing market price shifts and income migration among U.S. regions: how income migration relates to regional housing price clusters. The tremendous negative slide in national housing prices from 2006 to 2012 had an uneven spatial distribution. These differences are explored within the context of net income and net population migration (movement of money with people). Median housing prices for urban areas from 2005 to 2010 and IRS county...

  14. Price Recall, Bertrand Paradox and Price Dispersion With Elastic Demand

    NARCIS (Netherlands)

    Carvalho, M.

    2009-01-01

    This paper studies the consequence of an imprecise recall of the price by the consumers in the Bertrand price competition model for a homogeneous good. It is shown that firms can exploit this weakness and charge prices above the competitive price. This markup increases for rougher recall of the

  15. Anticipation, Tax Avoidance, and the Price Elasticity of Gasoline Demand

    OpenAIRE

    Coglianese, John; Davis, Lucas W; Kilian, Lutz; Stock, James H

    2015-01-01

    Traditional least squares estimates of the responsiveness of gasoline consumption to changes in gasoline prices are biased toward zero, given the endogeneity of gasoline prices. A seemingly natural solution to this problem is to instrument for gasoline prices using gasoline taxes, but this approach tends to yield implausibly large price elasticities. We demonstrate that anticipatory behavior provides an important explanation for this result. We provide evidence that gasoline buyers increase g...

  16. Estimating Price Elasticity using Market-Level Appliance Data

    Energy Technology Data Exchange (ETDEWEB)

    Fujita, K. Sydny [Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)

    2015-08-04

    This report provides and update to and expansion upon our 2008 LBNL report “An Analysis of the Price Elasticity of Demand for Appliances,” in which we estimated an average relative price elasticity of -0.34 for major household appliances (Dale and Fujita 2008). Consumer responsiveness to price change is a key component of energy efficiency policy analysis; these policies influence consumer purchases through price both explicitly and implicitly. However, few studies address appliance demand elasticity in the U.S. market and public data sources are generally insufficient for rigorous estimation. Therefore, analysts have relied on a small set of outdated papers focused on limited appliance types, assuming long-term elasticities estimated for other durables (e.g., vehicles) decades ago are applicable to current and future appliance purchasing behavior. We aim to partially rectify this problem in the context of appliance efficiency standards by revisiting our previous analysis, utilizing data released over the last ten years and identifying additional estimates of durable goods price elasticities in the literature. Reviewing the literature, we find the following ranges of market-level price elasticities: -0.14 to -0.42 for appliances; -0.30 to -1.28 for automobiles; -0.47 to -2.55 for other durable goods. Brand price elasticities are substantially higher for these product groups, with most estimates -2.0 or more elastic. Using market-level shipments, sales value, and efficiency level data for 1989-2009, we run various iterations of a log-log regression model, arriving at a recommended range of short run appliance price elasticity between -0.4 and -0.5, with a default value of -0.45.

  17. Income Elasticity of Vaccines Spending versus General Healthcare Spending.

    Science.gov (United States)

    Alfonso, Y Natalia; Ding, Guiru; Bishai, David

    2016-07-01

    Using cross-country data on gross domestic product and national expenditure on vaccines, we estimate and compare the income elasticity of vaccine expenditure and general curative healthcare expenditure. This study provides the first evidence on the national income elasticity of vaccination spending. Both fixed and random effects models are applied to data from 84 countries from 2010 to 2011. The income elasticities for healthcare expenditure and vaccine expenditure are 0.844 and 0.336, respectively. Despite vaccines' high cost-effectiveness, the national propensity to spend income on vaccines as income increases lags behind general health care. The low income elasticity of vaccine spending means that relying on economic growth alone will provide an unacceptably slow trajectory to achieving high vaccine coverage levels. Copyright © 2015 John Wiley & Sons, Ltd. Copyright © 2015 John Wiley & Sons, Ltd.

  18. Price elasticity estimation of electricity demand in France

    International Nuclear Information System (INIS)

    Bourbonnais, Regis; Keppler, Jan Horst

    2013-10-01

    On request of the French Union of Electricity (UFE), the authors have carried out a series of econometric statistical tests in order to determine the price elasticity of electricity demand in France. The results obtained are all solid and realistic

  19. Publication selection and the income elasticity of the value of a statistical life.

    Science.gov (United States)

    Doucouliagos, Hristos; Stanley, T D; Viscusi, W Kip

    2014-01-01

    Estimates of the value of a statistical life (VSL) establish the price government agencies use to value fatality risks. Transferring these valuations to other populations often utilizes the income elasticity of the VSL, which typically draw on estimates from meta-analyses. Using a data set consisting of 101 estimates of the income elasticity of VSL from 14 previously reported meta-analyses, we find that after accounting for potential publication bias the income elasticity of value of a statistical life is clearly and robustly inelastic, with a value of approximately 0.25-0.63. There is also clear evidence of the importance of controlling for levels of risk, differential publication selection bias, and the greater income sensitivity of VSL from stated preference surveys. Copyright © 2013 Elsevier B.V. All rights reserved.

  20. The elasticity of substitution of superlative price indices

    OpenAIRE

    Petter Frenger

    2005-01-01

    Abstract: The paper presents a method for computing the curvature implicit in the use of superlative price indices. It extends the quadratic lemma and allows us to compute the elasticity of substitution of the underlying preferences in the direction of the observed price change for the Törnqvist and the quadratic mean of order r indices. It derives the expressions for the directional shadow elasticity of substitution and applies the results to the Norwegian CPI data base. Ke...

  1. On the income elasticity of the value of travel time

    DEFF Research Database (Denmark)

    Börjesson, Maria; Fosgerau, Mogens; Algers, Staffan

    2012-01-01

    Transport infrastructure is long-term and in appraisal it is necessary to value travel time savings for future years. This requires knowing how the value of time (VTT) will develop over time as incomes grow. This paper investigates if the cross-sectional income elasticity of the VTT is equal...... to inter-temporal income elasticity. The study is based on two identical stated choice experiments conducted with a 13 year interval. Results indicate that the relationship between income and the VTT in the cross-section has remained unchanged over time. As a consequence, the inter-temporal income...... be expected to increase further over time....

  2. Heroin purchasing is income and price sensitive.

    Science.gov (United States)

    Roddy, Juliette; Steinmiller, Caren L; Greenwald, Mark K

    2011-06-01

    Semi-structured interviews were used to assess behavioral economic drug demand in heroin dependent research volunteers. Findings on drug price, competing purchases, and past 30-day income and consumption, established in a previous study, are replicated. We extended these findings by having participants indicate whether hypothetical environmental changes would alter heroin purchasing. Participants (n = 109) reported they would significantly (p purchasing amounts (DPA) from past 30-day levels (M = $60/day) if: (a) they encountered a 33% decrease in income (DPA = $34), (b) family/friends no longer paid their living expenses (DPA = $32), or (c) they faced four-fold greater likelihood of police arrest at their purchasing location (DPA = $42). Participants in higher income quartiles (who purchase more heroin) show greater DPA reductions (but would still buy more heroin) than those in lower income quartiles. For participants receiving government aid (n = 31), heroin purchasing would decrease if those subsidies were eliminated (DPA = $28). Compared to participants whose urine tested negative for cocaine (n = 31), cocaine-positive subjects (n = 32) reported more efficient heroin purchasing, that is, they live closer to their primary dealer; are more likely to have heroin delivered or walk to obtain it (and less likely to ride the bus), thus reducing purchasing time (52 vs. 31 min, respectively); and purchase more heroin per episode. These simulation results have treatment and policy implications: Daily heroin users' purchasing repertoire is very cost-effective, more so for those also using cocaine, and only potent environmental changes (income reductions or increased legal sanctions) may impact this behavior. (PsycINFO Database Record (c) 2011 APA, all rights reserved).

  3. Circulation Price Elasticity in the Daily Newspaper Industry.

    Science.gov (United States)

    Grotta, Gerald L.; Taylor, Michael Lee

    Pricing of subscriptions and single copies has historically been arbitrary. Evidence indicates that the newspaper industry has tended to overestimate the elasticity of demand for newspaper circulation. This study analyzed price changes, circulation changes, and population changes for all daily newspapers in the United States between 1970 and 1975.…

  4. Reference-based transitions in short-run price elasticity

    NARCIS (Netherlands)

    K.H. Pauwels (Koen); Ph.H.B.F. Franses (Philip Hans); S. Srinivasan (Shuba)

    2003-01-01

    textabstractMarketing literature has long recognized that price response need not be monotonic and symmetric, but has yet to provide generalizable market-level insights on reference price type, asymmetric thresholds and sign and magnitude of elasticity transitions. In this paper, we introduce smooth

  5. Price elasticity of demand for psychiatric consultation in a Nigerian ...

    African Journals Online (AJOL)

    Objective: This paper addresses price elasticity of demand (PED) in a region where most patients make payments for consultations out of pocket. PED is a measure of the responsiveness of the quantity demanded of goods or services to changes in price. The study was done in the context of an outpatient psychiatric clinic in ...

  6. A Reevaluation of Price Elasticities for Irrigation Water

    Science.gov (United States)

    Howitt, Richard E.; Watson, William D.; Adams, Richard M.

    1980-08-01

    The effectiveness of pricing systems in the allocation of irrigation water is linked with the price elasticity of demand of farmers for water. Using microeconomic theory, it is shown that omission of the elasticity of demand for the crop produced leads to an inelastic bias in the demand for irrigated water. Linear programing approaches omit the product elasticity of demand and are consequently biased, whereas quadratic programing approaches to estimating derived demands for irrigation water include product demand functions. The difference between the resulting estimates are empirically demonstrated for regional derived demand functions estimated from a model of California's agricultural industry.

  7. Empirical assessment of energy-price policies: the case for cross-price elasticities

    International Nuclear Information System (INIS)

    Frondel, M.

    2004-01-01

    Evaluations of energy-price policies are necessarily based on measures of the substitution of energy and non-energy inputs. Facing a variety of substitution elasticities, the central question arises which measure would be appropriate. Apparently, for a long time, this question has not been at issue: Allen's elasticities of substitution (AES) have been the most-used measures in applied production analysis. This paper's main contribution is an instructive survey of the origin of substitution measures and of the trinity of empirical substitution elasticities-AES, cross-price elasticities, and the Morishima elasticities of substitution (MES)-with particular emphasis on their interpretations and the perspectives that will be captured by these measures. This survey clarifies why classical cross-price elasticities are to be preferred for many practical purposes. Berndt and Wood's (Rev. Econom. Stat. 57(1975) 259) frequently applied data set of US manufacturing is used to illustrate why assessments of energy-price policies would be better based on cross-price elasticities like the energy-price elasticity of capital, rather than on AES or MES. (author)

  8. Empirical assessment of energy-price policies: the case for cross-price elasticities

    International Nuclear Information System (INIS)

    Frondel, Manuel

    2004-01-01

    Evaluations of energy-price policies are necessarily based on measures of the substitution of energy and non-energy inputs. Facing a variety of substitution elasticities, the central question arises which measure would be appropriate. Apparently, for a long time, this question has not been at issue: Allen's elasticities of substitution (AES) have been the most-used measures in applied production analysis. This paper's main contribution is an instructive survey of the origin of substitution measures and of the trinity of empirical substitution elasticities - AES, cross-price elasticities, and the Morishima elasticities of substitution (MES) - with particular emphasis on their interpretations and the perspectives that will be captured by these measures. This survey clarifies why classical cross-price elasticities are to be preferred for many practical purposes. Berndt and Wood's (Rev. Econom. Stat. 57 (1975) 259) frequently applied data set of US manufacturing is used to illustrate why assessments of energy-price policies would be better based on cross-price elasticities like the energy-price elasticity of capital, rather than on AES or MES

  9. Is youth smoking responsive to cigarette prices? Evidence from low- and middle-income countries.

    Science.gov (United States)

    Kostova, Deliana; Ross, Hana; Blecher, Evan; Markowitz, Sara

    2011-11-01

    To estimate the price elasticity of cigarette demand among youth in low- and middle-income countries (LMIC). The Global Youth Tobacco Survey was used to obtain data on the smoking behaviour of 315,353 adolescents from 17 LMIC. Two-part model of cigarette demand with country fixed effects. The first part estimates the impact of prices on smoking participation while the second part estimates the impact of prices on the number of cigarettes smoked among current smokers. Besides controlling for individual characteristics such as Age, Gender, Parental Smoking and availability of Pocket Money, the authors control for confounding environmental factors such as anti-smoking sentiment, the prevalence of cigarette advertising and anti-tobacco media messAges, and ease of purchasing cigarettes. All countries in this study are represented with at least two observations over time, which allows us to control for unobserved country characteristics and/or policies that may influence smoking patterns within countries. Cigarette price is an important determinant of smoking. The estimated price elasticity of smoking participation is -0.74, and the estimated price elasticity of conditional cigarette demand is approximately -1.37. The total price elasticity of cigarette demand is -2.11, implying that an increase in price of 10% would reduce youth cigarette consumption by 21.1% at the mean.

  10. Price elasticity of demand for malt liquor beer: findings from a US pilot study.

    Science.gov (United States)

    French, Michael Thomas; Browntaylor, Didra; Bluthenthal, Ricky Neville

    2006-05-01

    Our objective is to estimate the relative price elasticity of demand for malt liquor beer (MLB), regular beer, hard liquor, and a combined group of all other alcoholic beverages. Three hundred and twenty-nine alcohol consumers (mostly male) in South-Central Los Angeles answered a series of questions pertaining to expected consumption responses to hypothetical price increases. We found that based on a 10% price increase, the mean price elasticity of demand (% change in quantity demanded / % change in price) was -0.79 for MLB drinkers, -1.14 for regular beer drinkers, -1.11 for hard liquor drinkers, and -1.69 for the combined group of all other drinkers. Logistic regression analysis revealed that the personal characteristics significantly related to being a MLB drinker were older age, not working, being homeless, and a daily drinker. Daily (or nearly daily) drinkers were more likely to be married, earning lower incomes, and hard liquor drinkers. This study is the first to investigate the price elasticity of demand for MLB drinkers and other heavy alcohol consumers in poor urban neighborhoods of the US. Future research can use the methods from this pilot study to more rigorously examine and compare the price sensitivity among heavy drinking groups.

  11. Price elasticity of demand: An overlooked concept

    International Nuclear Information System (INIS)

    Anon.

    1995-01-01

    An all-too-common mistake in analyzing the uranium market is to assume that demand for uranium is driven only by the design and operational parameters of nuclear power plants. Because it is generally accepted that demand for uranium is inelastic, not much attention has been given to how prices can indirectly affect demand. The purpose of this paper is to highlight the factors that are most sensitive to uranium prices, and to show how they alter uranium demand

  12. Differential pricing of new pharmaceuticals in lower income European countries.

    Science.gov (United States)

    Kaló, Zoltán; Annemans, Lieven; Garrison, Louis P

    2013-12-01

    Pharmaceutical companies adjust the pricing strategy of innovative medicines to the imperatives of their major markets. The ability of payers to influence the ex-factory price of new drugs depends on country population size and income per capita, among other factors. Differential pricing based on Ramsey principles is a 'second-best' solution to correct the imperfections of the global market for innovative pharmaceuticals, and it is also consistent with standard norms of equity. This analysis summarizes the boundaries of differential pharmaceutical pricing for policymakers, payers and other stakeholders in lower-income countries, with special focus on Central-Eastern Europe, and describes the feasibility and implications of potential solutions to ensure lower pharmaceutical prices as compared to higher-income countries. European stakeholders, especially in Central-Eastern Europe and at the EU level, should understand the implications of increased transparency of pricing and should develop solutions to prevent the limited accessibility of new medicines in lower-income countries.

  13. On Teaching Price Elasticity of Demand and Change in Revenue due to Price Change -- A Synthesis with and without Calculus

    OpenAIRE

    Jong-Shin Wei

    2013-01-01

    Price elasticity of demand measures how much, in terms of percentage change, the quantity demanded responds to a change in price. In this pedagogical note, first we intuitively introduce the very first notion of price elasticity, which is a directional measure because it describes the impact of an arbitrary change in price from one to another on the percentage change in quantity demanded. Next, we show how this measure becomes "point" price elasticity of demand when demand is linear. Finally,...

  14. INCOME AND PRICE AS A BARRIER TO ORGANIC FOOD CHOICE

    OpenAIRE

    Aschemann-Witzel, Jessica; Zielke, Stephan; Thøgersen, John

    2014-01-01

    From the barriers said to potentially hamper the further development of the sector, the consumer demand side and herein the high prices are handled as crucial. We reviewed the literature since 2000 regarding the role of perceived price and income. We find that self-report based studies nearly unequivocally find price is the primary barrier to choice, deviations from this appear to occur when researching organic consumers and developed organic markets. There are mixed findings regarding income...

  15. R&D and Price Elasticity of Demand

    DEFF Research Database (Denmark)

    Lucke, D.; Schröder, Philipp; D., Schumacher,

    2004-01-01

    This paper explores the relationship between the price elasticity of demand and the R&D intensity of the product. We introduce the concept of R&D intensity into a standard Dixit-Stiglitz/Krugman-type setting. R&D activity is treated as a fixed cost of production. Within this framework, sectors...... with a higher R&D intensity show a lower price elasticity of demand. This proposition is confirmed by an empirical investigation of export demand for manufactured goods from major industrialised countries. Consequently, real exchange rate changes have an impact on the commodity structure of exports....

  16. ELASTICITY OF CORN PRICE TRANSMISION AND ITS IMPLICATION TO FARMERS

    Directory of Open Access Journals (Sweden)

    Ahmad Muslim

    2011-09-01

    Full Text Available Corn has important roles to Indonesian economy both for staple foods and for price transmission to other products. The high domestic demand for corn compared to its domestic production has made corn imports continue to grow. This research is aimed to know the elasticity of price transmission and its implication to corn’s farmers. The results of analysis show that corn price transmission is inelastic. The coefficient shows that corn market is oligopsony under the imperfect competition market. To help the corn farmers, the government has to provide fertilizer subsidy and farm credit with low interest rates, as well as impose import tariff on corn. Keywords: Corn, Elasticity of price transmission, oligopsony, imperfect competition marketJEL classification numbers: Q00, Q12, Q18

  17. Analysis on Price Elasticity of Energy Demand in East Asia: Empirical Evidence and Policy Implications for ASEAN and East Asia

    OpenAIRE

    Han PHOUMIN; Shigeru KIMURA

    2014-01-01

    This study uses time series data of selected ASEAN and East Asia countries to investigate the patterns of price and income elasticity of energy demand. Applying a dynamic log-linear energy demand model, both short-run and long-run price and income elasticities were estimated by country. The study uses three types of dependent variable “energy demand” such as total primary energy consumption (TPES), total final energy consumption (TFEC) and total final oil consumption (TFOC) to regress on its ...

  18. Differential responsiveness to cigarette price by education and income among adult urban Chinese smokers: findings from the ITC China Survey.

    Science.gov (United States)

    Huang, Jidong; Zheng, Rong; Chaloupka, Frank J; Fong, Geoffrey T; Jiang, Yuan

    2015-07-01

    Few studies have examined the impact of tobacco tax and price policies in China. In addition, very little is known about the differential responses to tax and price increases based on socioeconomic status in China. To estimate the conditional cigarette consumption price elasticity among adult urban smokers in China and to examine the differential responses to cigarette price increases among groups with different income and/or educational levels. Multivariate analyses employing the general estimating equations method were conducted using the first three waves of the International Tobacco Control (ITC) China Survey. Analyses based on subsample by education and income were conducted. Conditional cigarette demand price elasticity ranges from -0.12 to -0.14. No differential responses to cigarette price increase were found across education levels. The price elasticity estimates do not differ between high-income smokers and medium-income smokers. Cigarette consumption among low-income smokers did not decrease after a price increase, at least among those who continued to smoke. Relative to other low-income and middle-income countries, cigarette consumption among Chinese adult smokers is not very sensitive to changes in cigarette prices. The total impact of cigarette price increase would be larger if its impact on smoking initiation and cessation, as well as the price-reducing behaviours such as brand switching and trading down, were taken into account. Published by the BMJ Publishing Group Limited. For permission to use (where not already granted under a licence) please go to http://group.bmj.com/group/rights-licensing/permissions.

  19. Using FRED Data to Teach Price Elasticity of Demand

    Science.gov (United States)

    Méndez-Carbajo, Diego; Asarta, Carlos J.

    2017-01-01

    In this article, the authors discuss the use of Federal Reserve Economic Data (FRED) statistics to teach the concept of price elasticity of demand in an introduction to economics course. By using real data in its computation, they argue that instructors can create a value-adding context for illustrating and applying a foundational concept in…

  20. Using the Price Elasticity of Demand in Educational Decision Making.

    Science.gov (United States)

    Smith, Joseph D.; Moracco, Judy N.

    1984-01-01

    Describes a study and methods used by Navy Campus to choose a funding arrangement that would make the best use of the money available for voluntary educational purposes. Discusses modifying the economic concept of price elasticity to the interests of educationally oriented audiences. (JOW)

  1. Drilling rates and expected oil prices: The own price elasticity of US oil supply

    International Nuclear Information System (INIS)

    Kaufmann, R.K.; Gruen, W.; Montesi, R.

    1994-01-01

    This paper evaluates the feasibility of policies to increase exploration and development by the oil industry. To do so, the authors estimate a new model for well completions in the United States that includes the effect of price expectations from survey data, that separates exploratory from development wells, and that uses a deflator based on the cost of drilling a well. The regression results indicate that the price elasticity of drilling is considerably smaller than previous estimates. When combined with recent analyses of drilling success, the results indicate that the own price elasticity of US oil supply is relatively small. The low price elasticity of supply indicates that efforts to increase domestic oil supplies by increasing well completions may be more expensive than believed previously

  2. Estimation of Iranian price elasticities of residential electricity demand

    Directory of Open Access Journals (Sweden)

    Yeganeh Mousavi Jahromi

    2014-06-01

    Full Text Available This paper presents a study to determine demand for electricity in city of Yazd, Iran over the period of 1998-2008. Using vector error correction model (VECM based on seasonal information, the study determines that electricity has no elasticity in short term in household expenditure. Therefore, government policy on increasing price of electricity will not influence demand. However, electricity maintains elasticity over the long-term period and an increase on price of electricity could motivate consumers to reduce their consumption by purchasing energy efficient facilities. Therefore, any governmental strategy to increase price may have positive impact on economy. The study also detects a positive and meaningful relationship between temperature and electricity consumption.

  3. Family income, food prices, and household purchases of fruits and vegetables in Brazil.

    Science.gov (United States)

    Claro, Rafael Moreira; Monteiro, Carlos Augusto

    2010-12-01

    To analyze the influence of family income and food prices on the participation of fruits and vegetables in the food purchases of Brazilian households. Data analyzed refers to the Household Budget Survey conducted by the Instituto Brasileiro de Geografia e Estatística on a probabilistic sample of 48,470 Brazilian households between 2002 and 2003. Fruit and vegetable participation in total food purchases was expressed as a percentage of total calories purchased and as calories from fruit and vegetables adjusted for total calories purchased. A multiple regression analysis was employed to estimate elasticity coefficients, controlling for sociodemographic variables and price of other foods. Fruit and vegetable participation in total food purchases increased as the price of these foods decreased, or as income increased. A 1% decrease in the price of fruit and vegetables would increase their participation by 0.79%, whereas a 1% increase in family income would increase participation by 0.27%. The effect of income tended to be smaller among higher income strata. Reducing the price of fruit and vegetables, either by supporting their production or through fiscal measures, is a promising public policy instrument, capable of increasing the participation of these foods in the diet of the Brazilian population.

  4. Price elasticity estimates for tobacco products in India.

    Science.gov (United States)

    John, Rijo M

    2008-05-01

    The tax base of tobacco in India is heavily dependent on about 14% of tobacco users, who smoke cigarettes. Non-cigarette tobacco products accounting for 85% of the tobacco consumption contributes only 15% of the total tobacco taxes. Though taxation is an important tool to regulate consumption of tobacco, there have been no estimates of price elasticities for different tobacco products in India to date, which can guide tax policy on tobacco. This paper, for the first time in India, examines the price elasticity of demand for bidis, cigarettes and leaf tobacco at the national level using a representative cross-section of households. This study found that own-price elasticity estimates of different tobacco products in India ranged between -0.4 to -0.9, with bidis (an indigenous hand-rolled smoked tobacco preparation in India) and leaf tobacco having elasticities close to unity. Cigarettes were the least price elastic of all. With some assumptions, it is shown that the tax on bidis can be increased to Rs. 100 per 1000 sticks compared with the current Rs. 14 and the tax on an average cigarette can be increased to Rs. 3.5 per stick without any fear of losing revenue. The paper argues that the current system of taxing cigarettes in India based on the presence of filters and the length of cigarettes has no justification on health grounds, and should be abolished, if reducing tobacco consumption and the consequent disease burden is one of the objectives of tobacco taxation policy. It also argues that attempts to regulate tobacco use without effecting significant tax increases on bidis may not produce desired results.

  5. Price elasticities of alcohol demand: evidence from Russia.

    Science.gov (United States)

    Goryakin, Yevgeniy; Roberts, Bayard; McKee, Martin

    2015-03-01

    In this paper, we estimate price elasticities of demand of several types of alcoholic drinks, using 14 rounds of data from the Russia Longitudinal Monitoring Survey-HSE, collected from 1994 until 2009. We deal with potential confounding problems by taking advantage of a large number of control variables, as well as by estimating community fixed effect models. All in all, although alcohol prices do appear to influence consumption behaviour in Russia, in most cases the size of effect is modest. The finding that two particularly problematic drinks-cheap vodka and fortified wine-are substitute goods also suggests that increasing their prices may not lead to smaller alcohol consumption. Therefore, any alcohol pricing policies in Russia must be supplemented with other measures, such as restrictions on numbers of sales outlets or their opening times.

  6. Autonomous efficiency improvement or income elasticity of energy demand: Does it matter?

    International Nuclear Information System (INIS)

    Webster, Mort; Paltsev, Sergey; Reilly, John

    2008-01-01

    Observations of historical energy consumption, energy prices, and income growth in industrial economies exhibit a trend in improving energy efficiency even when prices are constant or falling. Two alternative explanations of this phenomenon are: a productivity change that uses less energy and a structural change in the economy in response to rising income. It is not possible to distinguish among these from aggregate data, and economic energy models for forecasting emissions simulate one, as an exogenous time trend, or the other, as energy demand elasticity with respect to income, or both processes for projecting energy demand into the future. In this paper, we ask whether and how it matters which process one uses for projecting energy demand and carbon emissions. We compare two versions of the MIT Emissions Prediction and Policy Analysis (EPPA) model, one using a conventional efficiency time trend approach and the other using an income elasticity approach. We demonstrate that while these two versions yield equivalent projections in the near-term, that they diverge in two important ways: long-run projections and under uncertainty in future productivity growth. We suggest that an income dependent approach may be preferable to the exogenous approach

  7. Two Propositions on the Application of Point Elasticities to Finite Price Changes.

    Science.gov (United States)

    Daskin, Alan J.

    1992-01-01

    Considers counterintuitive propositions about using point elasticities to estimate quantity changes in response to price changes. Suggests that elasticity increases with price along a linear demand curve, but falling quantity demand offsets it. Argues that point elasticity with finite percentage change in price only approximates percentage change…

  8. The Price Elasticity of Specialty Drug Use: Evidence from Cancer Patients in Medicare Part D.

    Science.gov (United States)

    Jung, Jeah Kyoungrae; Feldman, Roger; McBean, A Marshall

    2017-12-01

    Specialty drugs can bring substantial benefits to patients with debilitating conditions, such as cancer, but their costs are very high. Insurers/payers have increased patient cost-sharing for specialty drugs to manage specialty drug spending. We utilized Medicare Part D plan formulary data to create the initial price (cost-sharing in the initial coverage phase in Part D), and estimated the total demand (both on- and off-label uses) for specialty cancer drugs among elderly Medicare Part D enrollees with no low-income subsidies (non-LIS) as a function of the initial price. We corrected for potential endogeneity associated with plan choice by instrumenting the initial price of specialty cancer drugs with the initial prices of specialty drugs in unrelated classes. We report three findings. First, we found that elderly non-LIS beneficiaries with cancer were less likely to use a Part D specialty cancer drug when the initial price was high: the overall price elasticity of specialty cancer drug spending ranged between -0.72 and -0.75. Second, the price effect in Part D specialty cancer drug use was not significant among newly diagnosed patients. Finally, we found that use of Part B-covered cancer drugs was not responsive to the Part D specialty cancer drug price. As the demand for costly specialty drugs grows, it will be important to identify clinical circumstances where specialty drugs can be valuable and ensure access to high-value treatments.

  9. Estimating the price elasticity of expenditure for prescription drugs in the presence of non-linear price schedules: an illustration from Quebec, Canada.

    Science.gov (United States)

    Contoyannis, Paul; Hurley, Jeremiah; Grootendorst, Paul; Jeon, Sung-Hee; Tamblyn, Robyn

    2005-09-01

    The price elasticity of demand for prescription drugs is a crucial parameter of interest in designing pharmaceutical benefit plans. Estimating the elasticity using micro-data, however, is challenging because insurance coverage that includes deductibles, co-insurance provisions and maximum expenditure limits create a non-linear price schedule, making price endogenous (a function of drug consumption). In this paper we exploit an exogenous change in cost-sharing within the Quebec (Canada) public Pharmacare program to estimate the price elasticity of expenditure for drugs using IV methods. This approach corrects for the endogeneity of price and incorporates the concept of a 'rational' consumer who factors into consumption decisions the price they expect to face at the margin given their expected needs. The IV method is adapted from an approach developed in the public finance literature used to estimate income responses to changes in tax schedules. The instrument is based on the price an individual would face under the new cost-sharing policy if their consumption remained at the pre-policy level. Our preferred specification leads to expenditure elasticities that are in the low range of previous estimates (between -0.12 and -0.16). Naïve OLS estimates are between 1 and 4 times these magnitudes. (c) 2005 John Wiley & Sons, Ltd.

  10. Price elasticity of demand of non-cigarette tobacco products: a systematic review and meta-analysis.

    Science.gov (United States)

    Jawad, Mohammed; Lee, John Tayu; Glantz, Stanton; Millett, Christopher

    2018-01-23

    To systematically review the price elasticity of demand of non-cigarette tobacco products. Medline, Embase, EconLit and the Web of Science without language or time restrictions. Two reviewers screened title and abstracts, then full texts, independently and in duplicate. We based eligibility criteria on study design (interventional or observational), population (individuals or communities without geographic restrictions), intervention (price change) and outcome (change in demand). We abstracted data on study features, outcome measures, statistical approach, and single best own- and cross-price elasticity estimates with respect to cigarettes. We conducted a random effects meta-analysis for estimates of similar product, outcome and country income level. For other studies we reported median elasticities by product and country income level. We analysed 36 studies from 15 countries yielding 125 elasticity estimates. A 10% price increase would reduce demand by: 8.3% for cigars (95% CI 2.9 to 13.8), 6.4% for roll your owns (95% CI 4.3 to 8.4), 5.7% for bidis (95% CI 4.3 to 7.1) and 2.1% for smokeless tobacco (95% CI -0.6 to 4.8). Median price elasticities for all ten products were also negative. Results from few studies that examined cross-price elasticity suggested a positive substitution effect between cigarette and non-cigarette tobacco products. There is sufficient evidence in support of the effectiveness of price increases to reduce consumption of non-cigarette tobacco products as it is for cigarettes. Positive substitutability between cigarette and non-cigarette tobacco products suggest that tax and price increases need to be simultaneous and comparable across all tobacco products. © Article author(s) (or their employer(s) unless otherwise stated in the text of the article) 2018. All rights reserved. No commercial use is permitted unless otherwise expressly granted.

  11. On the multiplicity of option prices under CEV with positive elasticity of variance

    NARCIS (Netherlands)

    Veestraeten, D.

    2017-01-01

    The discounted stock price under the Constant Elasticity of Variance model is not a martingale when the elasticity of variance is positive. Two expressions for the European call price then arise, namely the price for which put-call parity holds and the price that represents the lowest cost of

  12. On the multiplicity of option prices under CEV with positive elasticity of variance

    NARCIS (Netherlands)

    Veestraeten, D.

    2014-01-01

    The discounted stock price under the Constant Elasticity of Variance (CEV) model is a strict local martingale when the elasticity of variance is positive. Two expressions for the European call price then arise, namely the risk-neutral call price and an alternative price that is linked to the unique

  13. Price elasticity of the demand for sugar sweetened beverages and soft drinks in Mexico.

    Science.gov (United States)

    Colchero, M A; Salgado, J C; Unar-Munguía, M; Hernández-Ávila, M; Rivera-Dommarco, J A

    2015-12-01

    A large and growing body of scientific evidence demonstrates that sugar drinks are harmful to health. Intake of sugar-sweetened beverages (SSB) is a risk factor for obesity and type 2 diabetes. Mexico has one of the largest per capita consumption of soft drinks worldwide and high rates of obesity and diabetes. Fiscal approaches such as taxation have been recommended as a public health policy to reduce SSB consumption. We estimated an almost ideal demand system with linear approximation for beverages and high-energy food by simultaneous equations and derived the own and cross price elasticities for soft drinks and for all SSB (soft drinks, fruit juices, fruit drinks, flavored water and energy drinks). Models were stratified by income quintile and marginality index at the municipality level. Price elasticity for soft drinks was -1.06 and -1.16 for SSB, i.e., a 10% price increase was associated with a decrease in quantity consumed of soft drinks by 10.6% and 11.6% for SSB. A price increase in soft drinks is associated with larger quantity consumed of water, milk, snacks and sugar and a decrease in the consumption of other SSB, candies and traditional snacks. The same was found for SSB except that an increase in price of SSB was associated with a decrease in snacks. Higher elasticities were found among households living in rural areas (for soft drinks), in more marginalized areas and with lower income. Implementation of a tax to soft drinks or to SSB could decrease consumption particularly among the poor. Substitutions and complementarities with other food and beverages should be evaluated to assess the potential impact on total calories consumed. Copyright © 2015 The Authors. Published by Elsevier B.V. All rights reserved.

  14. Food prices and consumer demand: differences across income levels and ethnic groups.

    Directory of Open Access Journals (Sweden)

    Cliona Ni Mhurchu

    Full Text Available BACKGROUND: Targeted food pricing policies may improve population diets. To assess their effects on inequalities, it is important to determine responsiveness to price changes across income levels and ethnic groups. OBJECTIVE: Our goal was to estimate price elasticity (PE values for major commonly consumed food groups in New Zealand, by income and ethnicity. PE values represent percentage change in demand associated with 1% change in price of that good (own-PE or another good (cross-PE. DESIGN: We used food expenditure data from national household economic surveys in 2007/08 and 2009/10 and Food Price Index data from 2007 and 2010. Adopting an Almost Ideal Demand System approach, own-PE and cross-PE estimates were derived for 24 food categories, household income quintiles, and two ethnic groups (Māori and non-Māori. RESULTS: Own-PE estimates (with two exceptions ranged from -0.44 to -1.78. Cross-PE estimates were generally small; only 31% of absolute values were greater than 0.10. Excluding the outlier 'energy drinks', nine of 23 food groups had significantly stronger own-PEs for the lowest versus highest income quintiles (average regression-based difference across food groups -0.30 (95% CI -0.62 to 0.02. Six own-PEs were significantly stronger among Māori; the average difference for Māori: non-Māori across food groups was -0.26 (95% CI -0.52 to 0.00. CONCLUSIONS: Food pricing policies have potential to improve population diets. The greater sensitivity of low-income households and Māori to price changes suggests the beneficial effects of such policies on health would be greatest for these groups.

  15. Food Prices and Consumer Demand: Differences across Income Levels and Ethnic Groups

    Science.gov (United States)

    Ni Mhurchu, Cliona; Eyles, Helen; Schilling, Chris; Yang, Qing; Kaye-Blake, William; Genç, Murat; Blakely, Tony

    2013-01-01

    Background Targeted food pricing policies may improve population diets. To assess their effects on inequalities, it is important to determine responsiveness to price changes across income levels and ethnic groups. Objective Our goal was to estimate price elasticity (PE) values for major commonly consumed food groups in New Zealand, by income and ethnicity. PE values represent percentage change in demand associated with 1% change in price of that good (own-PE) or another good (cross-PE). Design We used food expenditure data from national household economic surveys in 2007/08 and 2009/10 and Food Price Index data from 2007 and 2010. Adopting an Almost Ideal Demand System approach, own-PE and cross-PE estimates were derived for 24 food categories, household income quintiles, and two ethnic groups (Māori and non-Māori). Results Own-PE estimates (with two exceptions) ranged from −0.44 to −1.78. Cross-PE estimates were generally small; only 31% of absolute values were greater than 0.10. Excluding the outlier ‘energy drinks’, nine of 23 food groups had significantly stronger own-PEs for the lowest versus highest income quintiles (average regression-based difference across food groups −0.30 (95% CI −0.62 to 0.02)). Six own-PEs were significantly stronger among Māori; the average difference for Māori: non-Māori across food groups was −0.26 (95% CI −0.52 to 0.00). Conclusions Food pricing policies have potential to improve population diets. The greater sensitivity of low-income households and Māori to price changes suggests the beneficial effects of such policies on health would be greatest for these groups. PMID:24098408

  16. Projecting meat and cereals demand for China based on a meta-analysis of income elasticities

    OpenAIRE

    Zhou, De; Yu, Xiaohua; Abler, David; Chen, Danhong

    2014-01-01

    There are many projections for China’s food demand, and the projection results differ significantly from each other. Different values for income elasticities could be a major reason. This study projects meat and cereals demand for China based on a meta-analysis of the income elasticity estimates using a collection of 143 and 240 income elasticity estimates for cereals and meat products, respectively, from 36 primary studies. We find that income elasticities for most cereals (general cereals, ...

  17. City Size, Housing Price and Resident Income Gap

    Institute of Scientific and Technical Information of China (English)

    FAN Hong-zhong; ZHANG Ting; LI Ming-liang

    2014-01-01

    Taking the urban population size and urban housing price as the proxy variable of city size,this paper conducts an empirical analysis with the data of CHIPS 2002 and 2008.It is found that the rising of city size and housing prices has important promotion effects on income inequality of city residents.The main reason is that the wage of migrant workers is separated from the housing price of the cities in which they reside;while their wage level can balance the wage level of the ordinary workers of city residents,making it separate from the urban housing price.But the wage of high quality worker of city residents is closely connected with the housing price.The combined action of the multy sizes in China's urban labor market leads to such a result that the greater the size of cities,the higher the urban housing prices,and the larger the income gap between urban residents.This means that in the construction of the new urbanization,to limit the over-expansion of such mega-cities as Beijing,Shanghai and so on and to develop the middle and small cities is an effective way to narrow the income gap between urban residents in China.

  18. Optimal Electricity Charge Strategy Based on Price Elasticity of Demand for Users

    Science.gov (United States)

    Li, Xin; Xu, Daidai; Zang, Chuanzhi

    The price elasticity is very important for the prediction of electricity demand. This paper mainly establishes the price elasticity coefficient for electricity in single period and inter-temporal. Then, a charging strategy is established based on these coefficients. To evaluate the strategy proposed, simulations of the two elastic coefficients are carried out based on the history data of a certain region.

  19. The impact of food prices on consumption: a systematic review of research on the price elasticity of demand for food.

    Science.gov (United States)

    Andreyeva, Tatiana; Long, Michael W; Brownell, Kelly D

    2010-02-01

    In light of proposals to improve diets by shifting food prices, it is important to understand how price changes affect demand for various foods. We reviewed 160 studies on the price elasticity of demand for major food categories to assess mean elasticities by food category and variations in estimates by study design. Price elasticities for foods and nonalcoholic beverages ranged from 0.27 to 0.81 (absolute values), with food away from home, soft drinks, juice, and meats being most responsive to price changes (0.7-0.8). As an example, a 10% increase in soft drink prices should reduce consumption by 8% to 10%. Studies estimating price effects on substitutions from unhealthy to healthy food and price responsiveness among at-risk populations are particularly needed.

  20. Purchases of food in youth. Influence of price and income.

    Science.gov (United States)

    Epstein, Leonard H; Handley, Elizabeth A; Dearing, Kelly K; Cho, David D; Roemmich, James N; Paluch, Rocco A; Raja, Samina; Pak, Youngju; Spring, Bonnie

    2006-01-01

    One way to increase choice of healthy over unhealthy behaviors is to increase the cost of less healthy alternatives or reduce the cost of healthier alternatives. The influence of price on purchases of healthy and unhealthy foods was evaluated in two laboratory experiments. In Experiment 1, thirty-two 10- to 12-year-old youth were given $5.00 and allowed to purchase multiple portions of a healthy food (fruit or vegetable) and a less healthy food (higher-fat snack). The price of one type of food varied from $0.50 to $2.50, while the price of the other type was held at $1.00. Increasing the price of a type of food reduced purchases of that type of food, but did not lead to substitution with the alternative type of food. In Experiment 2, twenty 10- to 14-year-old youth were given $1.00, $3.00, and $5.00 to purchase healthy and unhealthy foods. The price of each food was raised and lowered by 25% and 50%. Raising the price of healthy or unhealthy foods resulted in decreased purchases of those foods, and income available interacted with price to predict the pattern of substitution of alternative foods. These results show the potential for controlled laboratory studies of price and food purchases, and show that the substitution of healthier for unhealthy food is related to available money.

  1. The Calculation of Weighted Price Elasticity of Tax: Turkey (1998-2013

    Directory of Open Access Journals (Sweden)

    Engin YILMAZ

    2015-06-01

    Full Text Available In this study, the assumption of “the weighted price elasticity of tax is a unit in the developing countries” suggested in the first studies which examine the impacts of the inflation on tax revenues, will be reevaluated for Turkey in the period of 1998-2013. We use Turkish tax and price index data for calculating the weighted price elasticity of tax. Via the method of dynamic ordinary least squares (DOLS, the long run weighted price elasticity of tax system is guessed. The importance of this study is the fact that this is first study intended to the calculation of the weighted price elasticity of tax for Turkey. In this sense, it will be instructive study for the reconsideration of the assumption of “the weighted price elasticity of tax is a unit in the developing countries”.

  2. Examining the short-run price elasticity of gasoline demand in the United States

    Science.gov (United States)

    Brannan, Michael James

    Estimating the consumer demand response to changes in the price of gasoline has important implications regarding fuel tax policies and environmental concerns. There are reasons to believe that the short-run price elasticity of gasoline demand fluctuates due to changing structural and behavioral factors. In this paper I estimate the short-run price elasticity of gasoline demand in two time periods, from 2001 to 2006 and from 2007 to 2010. This study utilizes data at both the national and state levels to produce estimates. The short-run price elasticities range from -0.034 to -0.047 during 2001 to 2006, compared to -0.058 to -0.077 in the 2007 to 2010 period. This paper also examines whether there are regional differences in the short-run price elasticity of gasoline demand in the United States. However, there appears to only be modest variation in price elasticity values across regions.

  3. Sensitivity of price elasticity of demand to aggregation, unobserved heterogeneity, price trends, and price endogeneity: Evidence from U.S. Data

    International Nuclear Information System (INIS)

    Miller, Mark; Alberini, Anna

    2016-01-01

    Price elasticity estimates of residential electricity demand vary widely across the energy economics and policy literature. In this paper, we seek to explain these findings using three nationwide datasets from the U.S. – the American Housing Survey, Forms EIA-861, and the Residential Energy Consumption Survey. We examine the role of the sample period, level of aggregation, use of panel data, use of instrumental variables, and inclusion of housing characteristics and capital stock. Our findings suggest that price elasticities have remained relatively constant over time. Upon splitting our panel datasets into annual cross sections, we do observe a negative relationship between price elasticities and the average price. Whether prices are rising or falling appears to have little effect on our estimates. We also find that aggregating our data can result in both higher and lower price elasticity estimates, depending on the dataset used, and that controlling for unit-level fixed effects with panel data generally results in more inelastic demand functions. Addressing the endogeneity of price and/or measurement error in price with instrumental variables has a small but noticeable effect on the price elasticities. Finally, controlling for housing characteristics and capital stock produces a lower price elasticity. - Highlights: • The price elasticity of residential electricity demand varies widely across studies. • We use three large datasets from the US to examine reasons for such wide variation. • Some assessed effects include aggregation, unobserved heterogeneity, and price trends. • Correcting for such issues can change the estimated price elasticity by 50–100%.

  4. Green Power voluntary purchases: Price elasticity and policy analysis

    International Nuclear Information System (INIS)

    Mewton, Ross T.; Cacho, Oscar J.

    2011-01-01

    Green Power schemes offer electricity from renewable energy sources to customers for a higher price than ordinary electricity. This study examines the demand characteristics of Green Power in Australia and policies which could increase its sales. A sample of 250 pooled time series and cross sectional observations was used to estimate a statistically significant elasticity of demand for Green Power with respect to price of -0.96 with a 95% confidence interval of ±68%. The wide variation in market penetration between jurisdictions and between countries for Green Power, and the low awareness of Green Power found by surveys indicate that Green Power sales could be increased by appropriate marketing and government policies. The most cost effective means to increase sales was found to be advertising campaigns although only one Australian example was found, in the state of Victoria in 2005. It was also found that full tax deductibility of the Green Power premium to residential customers, exemption from the Goods and Services Tax and a tax rebate for Green Power are all probably less cost effective for promoting sales than direct government purchase of Green Power, in terms of cost per unit of increased sales.

  5. Green Power voluntary purchases: Price elasticity and policy analysis

    Energy Technology Data Exchange (ETDEWEB)

    Mewton, Ross T., E-mail: rtmewton@hotmail.co [University of New England (Australia); Cacho, Oscar J. [School of Business Economics and Public Policy, School of Economics, University of New England, Armidale, NSW 2351 (Australia)

    2011-01-15

    Green Power schemes offer electricity from renewable energy sources to customers for a higher price than ordinary electricity. This study examines the demand characteristics of Green Power in Australia and policies which could increase its sales. A sample of 250 pooled time series and cross sectional observations was used to estimate a statistically significant elasticity of demand for Green Power with respect to price of -0.96 with a 95% confidence interval of {+-}68%. The wide variation in market penetration between jurisdictions and between countries for Green Power, and the low awareness of Green Power found by surveys indicate that Green Power sales could be increased by appropriate marketing and government policies. The most cost effective means to increase sales was found to be advertising campaigns although only one Australian example was found, in the state of Victoria in 2005. It was also found that full tax deductibility of the Green Power premium to residential customers, exemption from the Goods and Services Tax and a tax rebate for Green Power are all probably less cost effective for promoting sales than direct government purchase of Green Power, in terms of cost per unit of increased sales.

  6. Green Power voluntary purchases. Price elasticity and policy analysis

    Energy Technology Data Exchange (ETDEWEB)

    Mewton, Ross T. [University of New England (Australia); Cacho, Oscar J. [School of Business Economics and Public Policy, School of Economics, University of New England, Armidale, NSW 2351 (Australia)

    2011-01-15

    Green Power schemes offer electricity from renewable energy sources to customers for a higher price than ordinary electricity. This study examines the demand characteristics of Green Power in Australia and policies which could increase its sales. A sample of 250 pooled time series and cross sectional observations was used to estimate a statistically significant elasticity of demand for Green Power with respect to price of -0.96 with a 95% confidence interval of {+-}68%. The wide variation in market penetration between jurisdictions and between countries for Green Power, and the low awareness of Green Power found by surveys indicate that Green Power sales could be increased by appropriate marketing and government policies. The most cost effective means to increase sales was found to be advertising campaigns although only one Australian example was found, in the state of Victoria in 2005. It was also found that full tax deductibility of the Green Power premium to residential customers, exemption from the Goods and Services Tax and a tax rebate for Green Power are all probably less cost effective for promoting sales than direct government purchase of Green Power, in terms of cost per unit of increased sales. (author)

  7. A meta-analysis of the price elasticity of gasoline demand. A SUR approach

    NARCIS (Netherlands)

    Brons, M.R.E.; Nijkamp, P.; Pels, E.; Rietveld, P.

    2008-01-01

    Automobile gasoline demand can be expressed as a multiplicative function of fuel efficiency, mileage per car and car ownership. This implies a linear relationship between the price elasticity of total fuel demand and the price elasticities of fuel efficiency, mileage per car and car ownership. In

  8. A Meta-analysis of the Price Elasticity of Gasoline Demand. A System of Equations Approach

    NARCIS (Netherlands)

    Brons, Martijn; Nijkamp, Peter; Pels, Eric; Rietveld, Piet

    2006-01-01

    Automobile gasoline demand can be expressed as a multiplicative function of fuel efficiency, mileage per car and car ownership. This implies a linear relationship between the price elasticity of total fuel demand and the price elasticities of fuel efficiency, mileage per car and car ownership. In

  9. Child Safety Seats on Commercial Airliners: A Demonstration of Cross-Price Elasticities

    Science.gov (United States)

    Sanders, Shane; Weisman, Dennis L.; Li, Dong; Grimes, Paul, Ed.

    2008-01-01

    The cross-price elasticity concept can be difficult for microeconomics students to grasp. The authors provide a real-life application of cross-price elasticities in policymaking. After a debate that spanned more than a decade and included input from safety engineers, medical personnel, politicians, and economists, the Federal Aviation…

  10. The analysis of indiference and the price elasticity of demand between different categories of agricultural products

    Directory of Open Access Journals (Sweden)

    Vukadinović Predrag

    2017-01-01

    Full Text Available In this paper, the analysis of the price elasticity of demand of four different categories of agricultural products in the Republic of Serbia was described. Differentiating the price and demand of these products by sales points, and using the least squares approximation method, the elasticity for all different agricultural categories was expressed in the functional form. According to this, the coefficients of elasticity of the price and demand were computed and between different agricultural categories were analyzed. The results we obtained show that the market of agricultural products in Serbia is mostly inelastic because the coefficients of inelasticity and indifference of demand to change of prices, are dominant. The influence of factors on the elasticity of demand that are not of price character, proved to be very pronounced. The relationship of the two segments of agricultural market (markets and shops was also analysed and it was demonstrated that these two segments have a slight correlation.

  11. Differences in price elasticities of demand for health insurance: a systematic review.

    Science.gov (United States)

    Pendzialek, Jonas B; Simic, Dusan; Stock, Stephanie

    2016-01-01

    Many health insurance systems apply managed competition principles to control costs and quality of health care. Besides other factors, managed competition relies on a sufficient price-elastic demand. This paper presents a systematic review of empirical studies on price elasticity of demand for health insurance. The objective was to identify the differing international ranges of price elasticity and to find socio-economic as well as setting-oriented factors that influence price elasticity. Relevant literature for the topic was identified through a two-step identification process including a systematic search in appropriate databases and further searches within the references of the results. A total of 45 studies from countries such as the USA, Germany, the Netherlands, and Switzerland were found. Clear differences in price elasticity by countries were identified. While empirical studies showed a range between -0.2 and -1.0 for optional primary health insurance in the US, higher price elasticities between -0.6 and -4.2 for Germany and around -2 for Switzerland were calculated for mandatory primary health insurance. Dutch studies found price elasticities below -0.5. In consideration of all relevant studies, age and poorer health status were identified to decrease price elasticity. Other socio-economic factors had an unclear impact or too limited evidence. Premium level, range of premiums, homogeneity of benefits/coverage and degree of forced decision were found to have a major influence on price elasticity in their settings. Further influence was found from supplementary insurance and premium-dependent employer contribution.

  12. Market power, inelastic income elasticity of demand, and terms of trade

    OpenAIRE

    Kujal, Praveen; Michelitsch, Roland

    1996-01-01

    The "Theory of Unequal Exchange" predicts that terms of trade for the producer of primary commodities worsen over time given the low income elasticity of demand for primary product exports and the market power of the industrialized countries. We set up a laboratory economy to test the influence of market power and low income elasticity of demand on trade. An experimental

  13. Price elasticity and medication use: cost sharing across multiple clinical conditions.

    Science.gov (United States)

    Gatwood, Justin; Gibson, Teresa B; Chernew, Michael E; Farr, Amanda M; Vogtmann, Emily; Fendrick, A Mark

    2014-11-01

    To address the impact that out-of-pocket prices may have on medication use, it is vital to understand how the demand for medications may be affected when patients are faced with changes in the price to acquire treatment and how price responsiveness differs across medication classes.  To examine the impact of cost-sharing changes on the demand for 8 classes of prescription medications. This was a retrospective database analysis of 11,550,363 commercially insured enrollees within the 2005-2009 MarketScan Database. Patient cost sharing, expressed as a price index for each medication class, was the main explanatory variable to examine the price elasticity of demand. Negative binomial fixed effect models were estimated to examine medication fills. The elasticity estimates reflect how use changes over time as a function of changes in copayments. Model estimates revealed that price elasticity of demand ranged from -0.015 to -0.157 within the 8 categories of medications (P  less than  0.01 for 7 of 8 categories). The price elasticity of demand for smoking deterrents was largest (-0.157, P  less than  0.0001), while demand for antiplatelet agents was not responsive to price (P  greater than 0.05). The price elasticity of demand varied considerably by medication class, suggesting that the influence of cost sharing on medication use may be related to characteristics inherent to each medication class or underlying condition.

  14. The price elasticity of demand for heroin: Matched longitudinal and experimental evidence.

    Science.gov (United States)

    Olmstead, Todd A; Alessi, Sheila M; Kline, Brendan; Pacula, Rosalie Liccardo; Petry, Nancy M

    2015-05-01

    This paper reports estimates of the price elasticity of demand for heroin based on a newly constructed dataset. The dataset has two matched components concerning the same sample of regular heroin users: longitudinal information about real-world heroin demand (actual price and actual quantity at daily intervals for each heroin user in the sample) and experimental information about laboratory heroin demand (elicited by presenting the same heroin users with scenarios in a laboratory setting). Two empirical strategies are used to estimate the price elasticity of demand for heroin. The first strategy exploits the idiosyncratic variation in the price experienced by a heroin user over time that occurs in markets for illegal drugs. The second strategy exploits the experimentally induced variation in price experienced by a heroin user across experimental scenarios. Both empirical strategies result in the estimate that the conditional price elasticity of demand for heroin is approximately -0.80. Copyright © 2015 Elsevier B.V. All rights reserved.

  15. The price elasticity of demand for heroin: matched longitudinal and experimental evidence#

    Science.gov (United States)

    Olmstead, Todd A.; Alessi, Sheila M.; Kline, Brendan; Pacula, Rosalie Liccardo; Petry, Nancy M.

    2015-01-01

    This paper reports estimates of the price elasticity of demand for heroin based on a newly constructed dataset. The dataset has two matched components concerning the same sample of regular heroin users: longitudinal information about real-world heroin demand (actual price and actual quantity at daily intervals for each heroin user in the sample) and experimental information about laboratory heroin demand (elicited by presenting the same heroin users with scenarios in a laboratory setting). Two empirical strategies are used to estimate the price elasticity of demand for heroin. The first strategy exploits the idiosyncratic variation in the price experienced by a heroin user over time that occurs in markets for illegal drugs. The second strategy exploits the experimentally-induced variation in price experienced by a heroin user across experimental scenarios. Both empirical strategies result in the estimate that the conditional price elasticity of demand for heroin is approximately −0.80. PMID:25702687

  16. A theoretical analysis of price elasticity of energy demand in multistage energy conversion systems

    International Nuclear Information System (INIS)

    Lowe, R.

    2003-01-01

    The objective of this paper is an analytical exploration of the problem of price elasticity of energy demand in multi-stage energy conversion systems. The paper describes in some detail an analytical model of energy demand in such systems. Under a clearly stated set of assumptions, the model makes it possible to explore both the impacts of the number of sub-systems, and of varying sub-system elasticities on overall system elasticity. The analysis suggests that overall price elasticity of energy demand for such systems will tend asymptotically to unity as the number of sub-systems increases. (author)

  17. A theoretical analysis of price elasticity of energy demand in multi-stage energy conversion systems

    International Nuclear Information System (INIS)

    Lowe, Robert

    2003-01-01

    The objective of this paper is an analytical exploration of the problem of price elasticity of energy demand in multi-stage energy conversion systems. The paper describes in some detail an analytical model of energy demand in such systems. Under a clearly stated set of assumptions, the model makes it possible to explore both the impacts of the number of sub-systems, and of varying sub-system elasticities on overall system elasticity. The analysis suggests that overall price elasticity of energy demand for such systems will tend asymptotically to unity as the number of sub-systems increases

  18. The consistent estimation of income elasticity of environmental amenities in Uruguay

    OpenAIRE

    Daniel Miles; Andrés Pereyra; Máximo Rossi

    2002-01-01

    In this paper we are concerned with the estimation of income elasticities of environmental amenities. The novelty is the application of econometric methods that take into account the problem of measurement errors when estimating these elasticities, which is common in microeconomic data and is not usually considered in the applied literature related to this issue. Our aim is to discuss whether measurement errors have significant effects on income elasticities. Data from the { Expenditure Budge...

  19. Role of expendable income and price in food choice by low income families.

    Science.gov (United States)

    Burns, Cate; Cook, Kay; Mavoa, Helen

    2013-12-01

    The public health literature suggests that the cheapness of energy-dense foods is driving the obesity epidemic. We examined food purchases in low-income families and its relationship to the price of food and availability of funds. In-depth interviews were conducted with 22 parents with children less than 15 years of age whose major source of income was a government pension. A photo taxonomy, where participants sorted 50 photos of commonly purchased foods, was used to explore food choice. The most common food groupings used by the participants were: basic, emergency, treat and comfort. The process of food purchase was described by participants as weighing up the attributes of a food in relation to price and money available. Shoppers nominated the basic unit of measurement as quantity per unit price and the heuristic for food choice when shopping as determining "value for money" in a process of triage relating to food purchase decisions. Participants stated satiation of hunger to be the most common "value" relative to price. Given that the foods nominated as filling tended to be carbohydrate-rich staples, we suggest that public health initiatives need to acknowledge this triage process and shape interventions to promote nutrition over satiation. Copyright © 2013 Elsevier Ltd. All rights reserved.

  20. Price elasticity of natural gas demand in the power generation sector

    International Nuclear Information System (INIS)

    McArdle, P.F.

    1990-01-01

    Today, the demand for energy by the electric generation sector is highly competitive and price-responsive. Previous estimates of the price elasticity of natural gas demand in this sector have focused primarily on data from the 1960s and 1970s. Such estimates fail to take full account of economic, regulatory, and legislative developments that have altered the structure of the electric generation market during the 1980s. Structural changes include an increased ability of utilities to choose among generating options, the increase in non-utility generators, the amending of the Fuel Use Act, and a more competitive market for electricity. An accurate estimate of price elasticity requires a refocusing on data from the post-1983 period. The purpose of this paper is to answer two questions: how price responsive (elastic) is natural gas demand in this market; and what changes in natural gas demand elasticity have occurred over time

  1. Understanding Price Elasticities to Inform Public Health Research and Intervention Studies: Key Issues

    Science.gov (United States)

    Nghiem, Nhung; Genç, Murat; Blakely, Tony

    2013-01-01

    Pricing policies such as taxes and subsidies are important tools in preventing and controlling a range of threats to public health. This is particularly so in tobacco and alcohol control efforts and efforts to change dietary patterns and physical activity levels as a means of addressing increases in noncommunicable diseases. To understand the potential impact of pricing policies, it is critical to understand the nature of price elasticities for consumer products. For example, price elasticities are key parameters in models of any food tax or subsidy that aims to quantify health impacts and cost-effectiveness. We detail relevant terms and discuss key issues surrounding price elasticities to inform public health research and intervention studies. PMID:24028228

  2. Understanding price elasticities to inform public health research and intervention studies: key issues.

    Science.gov (United States)

    Nghiem, Nhung; Wilson, Nick; Genç, Murat; Blakely, Tony

    2013-11-01

    Pricing policies such as taxes and subsidies are important tools in preventing and controlling a range of threats to public health. This is particularly so in tobacco and alcohol control efforts and efforts to change dietary patterns and physical activity levels as a means of addressing increases in noncommunicable diseases. To understand the potential impact of pricing policies, it is critical to understand the nature of price elasticities for consumer products. For example, price elasticities are key parameters in models of any food tax or subsidy that aims to quantify health impacts and cost-effectiveness. We detail relevant terms and discuss key issues surrounding price elasticities to inform public health research and intervention studies.

  3. Analysis of transmission elasticity of international prices for sugar prices in Brazil: an application of the Structural Model

    Directory of Open Access Journals (Sweden)

    Mario Antonio Margarido

    2018-01-01

    Full Text Available This study aims to determine and analyze the spatial elasticity (or horizontal of price transmission between international sugar prices and the average price received by the Brazilian exporter of sugar, using the Structural Model. The data used are from January/2004 to November/2015. As a result, variations of 1% in the international sugar price are transmitted to the average price received by Brazilian sugar exporters with a magnitude of 0.3% on average, setting inelastic relationship between the two variables and, consequently, the non-occurrence of the law of one price. So, there are mechanisms in this market that are hindering the full functioning of the arbitration. This situation is not unusual, because the sugar is one of the most commercially protected product and suffer much interference.

  4. A meta-analysis on the price elasticity of energy demand

    International Nuclear Information System (INIS)

    Labandeira, Xavier; Labeaga, José M.; López-Otero, Xiral

    2017-01-01

    Price elasticities of energy demand have become increasingly relevant in estimating the socio-economic and environmental effects of energy policies or other events that influence the price of energy goods. Since the 1970s, a large number of academic papers have provided both short and long-term price elasticity estimates for different countries using several models, data and estimation techniques. Yet the literature offers a rather wide range of estimates for the price elasticities of demand for energy. This paper quantitatively summarizes the recent, but sizeable, empirical evidence to facilitate a sounder economic assessment of (in some cases policy-related) energy price changes. It uses meta-analysis to identify the main factors affecting short and long term elasticity results for energy, in general, as well as for specific products, i.e., electricity, natural gas, gasoline, diesel and heating oil. - Highlights: • An updated and wider meta-analysis on price elasticities of energy demand. • Energy goods are shown to be price inelastic both in the short and long-term. • Results are relevant for a proper design and implementation of energy policies. • Our results refer to energy, as a whole, and specific energy goods.

  5. Estimating the price elasticity for demand for electricity by sector in South Africa

    Directory of Open Access Journals (Sweden)

    Roula Inglesi-Lotz

    2011-12-01

    Full Text Available This paper analyses electricity consumption patterns in South Africa in an attempt to understand and identify the roots of the current electricity crisis. This is done by investigating various economic sectors’ responses to price changes using panel data for the period 1993–2004. Positive and statistically significant price elasticities over this period were found for the transport (rail and commercial sectors while there are positive, but small and statistically insignificant responses to price changes in the agriculture and mining sectors. Only the industrial sector responded to changes in electricity prices according to theory, namely illustrating negative demand elasticities. This sector, however, dominates electricity consumption resulting in aggregate demand elasticities that are negative. These results explain, in part, the current electricity crisis. Given the historic low level of electricity prices in conjunction with, on the whole, a real price decline, i.e. price increases lower than the inflation rate; there was no major incentive to reduce electricity consumption and/or to be efficient. This result supports the notion that prices do have an important signalling effect in the economy. Hence, the electricity prices should be considered not only from an economic growth or social vantage point, but also from a supply and technocratic perspective, which includes environmental factors such as CO2-emissions. Prices should not be determined without considering the system-wide implications thereof.

  6. Agricultural price and income policy in the EC : alternative policies and their implications

    NARCIS (Netherlands)

    Meester, G.

    1980-01-01

    Alternative forms of income policy without direct supply control. Alternative forms of income policy with direct supply control: quota arrangements. The influence of EC policy on the world market prices of agricultural produce

  7. THE EFFECTS OF PRICE AND INCOMES ON CONSUMER DEMAND

    Directory of Open Access Journals (Sweden)

    Adrian Tănase

    2012-12-01

    Full Text Available The complexity of consumption can only be explained by identifying and analysing all the factors acting upon the carrier of demand, and in a given time and space, they have a higher or a lower importance, which makes it impossible to find a hierarchy. However, in societies characterized by a low standard of living, prices and incomes have a strong impact on consumer behaviour. Consequently, this paper approaches one of the most stringent issues, which interest specialists, governing bodies, mass-media and, last but not least, population. In the entire paper we analyse the population’s consumption, i.e. food, non-food products and services, by categories of households, from the economic, statistic and sociologic viewpoints. The paper ends with a brief presentation of conclusions and suggestions regarding the analysis and improvement of population’s consumption.

  8. Public transportation research study : price elasticity of rideshare : commuter fringe benefits & parking cash-out

    Science.gov (United States)

    2004-06-01

    The goal of this research project was to determine the price elasticity of rideshare with specific objectives of helping to assess what the effect on ridership would be if the effective price paid by the traveler was substantially reduced (i.e., incr...

  9. Meta-Analysis of the Oil Price Elasticity of the GDP for Policy Analysis: Documentation

    Energy Technology Data Exchange (ETDEWEB)

    Leiby, Paul Newsome [Oak Ridge National Lab. (ORNL), Oak Ridge, TN (United States); Bowman, David Charles [Oak Ridge National Lab. (ORNL), Oak Ridge, TN (United States); Oladosu, Gbadebo A. [Oak Ridge National Lab. (ORNL), Oak Ridge, TN (United States); Uria Martinez, Rocio [Oak Ridge National Lab. (ORNL), Oak Ridge, TN (United States); Johnson, Megan M. [Oak Ridge National Lab. (ORNL), Oak Ridge, TN (United States)

    2017-08-01

    Given the important role of oil in economic activities, policy makers are interested in estimates of the potential damage to the economy from oil price shocks, particularly during periods of rapid and large increases that accompany severe shocks. Such estimates are needed to quantify the economic costs of oil price shocks, and to evaluate the potential benefits of alternative policy responses. Although research on the economic impacts of oil price shocks is extensive and has generally found that large increases in oil prices exert negative economic impacts, the range of estimates, summarized by the oil price elasticity of the GDP or other aggregate measure of economic activity, is very wide. There are also conditions under which the relationship between the oil price and the economy could be positive. The range of estimates of the oil price elasticity of the GDP for the United States is typified by averages from the studies of Hamilton (2005, 2012) and Kilian and Vigfusson (2014), in which the implied elasticities were -0.014 to - 0.069 and +0.004 to -0.052, respectively. We employ a meta-regression approach to systematically summarize available estimates of the oil price elasticity of the GDP for oil importing economies, and examine the role of key factors. The resulting regression model was used to estimate the oil price elasticity of the GDP for the United States. Based on this we estimate the mean elasticity for the United States at -0.0238, with a 68% confidence interval of -0.0075 to -0.0402, four quarters after a shock.

  10. The evolution of price elasticity of electricity demand in South Africa: A Kalman filter application

    International Nuclear Information System (INIS)

    Inglesi-Lotz, R.

    2011-01-01

    In South Africa, the electricity mismatch of supply and demand has been of major concern. Additional to past problems, the 2008 electricity crisis made the solution crucial after its damaging consequences to the economy. The disagreement on the need and consequences of the continuous electricity price hikes worsens the situation. To contribute to the recent electricity debate, this paper proposes a time-varying price elasticity of demand for electricity; the sensitivity of electricity consumption to price fluctuations changes throughout the years. The main purpose of this study is the estimation of the price elasticity of electricity in South Africa during the period 1980-2005 by employing an advanced econometric technique, the Kalman filter. Apart from the decreasing effect of electricity prices to consumption (-71.8% in the 1990s and -94.5% in the 2000s in average), our results conclude to an important finding: the higher the prices (for example in the 1980s) the higher the sensitivity of consumers to price fluctuations. Thus, further increases of the electricity prices may lead to changes in the behaviour of electricity consumers, focusing their efforts on improving their efficiency levels by introducing demand-side management techniques or even turning to other sources of - cheaper - energy. - Highlights: → The price elasticity of South Africa's electricity demand (1980-2005) is examined. → The Kalman filter methodology is used to show elasticity changes over time. → Decreasing effect of electricity prices to consumption over the years is found. → The higher the prices of electricity were, the higher the sensitivity of consumption. → If electricity prices increase, consumers will choose to consume more efficiently.

  11. The evolution of price elasticity of electricity demand in South Africa: A Kalman filter application

    Energy Technology Data Exchange (ETDEWEB)

    Inglesi-Lotz, R., E-mail: roula.inglesi@up.ac.za [Department of Economics, EMS Building, University of Pretoria, Gauteng 0002 (South Africa)

    2011-06-15

    In South Africa, the electricity mismatch of supply and demand has been of major concern. Additional to past problems, the 2008 electricity crisis made the solution crucial after its damaging consequences to the economy. The disagreement on the need and consequences of the continuous electricity price hikes worsens the situation. To contribute to the recent electricity debate, this paper proposes a time-varying price elasticity of demand for electricity; the sensitivity of electricity consumption to price fluctuations changes throughout the years. The main purpose of this study is the estimation of the price elasticity of electricity in South Africa during the period 1980-2005 by employing an advanced econometric technique, the Kalman filter. Apart from the decreasing effect of electricity prices to consumption (-71.8% in the 1990s and -94.5% in the 2000s in average), our results conclude to an important finding: the higher the prices (for example in the 1980s) the higher the sensitivity of consumers to price fluctuations. Thus, further increases of the electricity prices may lead to changes in the behaviour of electricity consumers, focusing their efforts on improving their efficiency levels by introducing demand-side management techniques or even turning to other sources of - cheaper - energy. - Highlights: > The price elasticity of South Africa's electricity demand (1980-2005) is examined. > The Kalman filter methodology is used to show elasticity changes over time. > Decreasing effect of electricity prices to consumption over the years is found. > The higher the prices of electricity were, the higher the sensitivity of consumption. > If electricity prices increase, consumers will choose to consume more efficiently.

  12. The implications of selective attrition for estimates of intergenerational elasticity of family income.

    Science.gov (United States)

    Schoeni, Robert F; Wiemers, Emily E

    2015-09-01

    Numerous studies have estimated a high intergenerational correlation in economic status. Such studies do not typically attend to potential biases that may arise due to survey attrition. Using the Panel Study of Income Dynamics - the data source most commonly used in prior studies - we demonstrate that attrition is particularly high for low-income adult children with low-income parents and particularly low for high-income adult children with high-income parents. Because of this pattern of attrition, intergenerational upward mobility has been overstated for low-income families and downward mobility has been understated for high-income families. The bias among low-income families is greater than the bias among high-income families implying that intergenerational elasticity in family income is higher than previous estimates with the Panel Study of Income Dynamics would suggest.

  13. Censored Quantile Instrumental Variable Estimates of the Price Elasticity of Expenditure on Medical Care.

    Science.gov (United States)

    Kowalski, Amanda

    2016-01-02

    Efforts to control medical care costs depend critically on how individuals respond to prices. I estimate the price elasticity of expenditure on medical care using a censored quantile instrumental variable (CQIV) estimator. CQIV allows estimates to vary across the conditional expenditure distribution, relaxes traditional censored model assumptions, and addresses endogeneity with an instrumental variable. My instrumental variable strategy uses a family member's injury to induce variation in an individual's own price. Across the conditional deciles of the expenditure distribution, I find elasticities that vary from -0.76 to -1.49, which are an order of magnitude larger than previous estimates.

  14. A meta-analysis of the price elasticity of gasoline demand. A SUR approach

    Energy Technology Data Exchange (ETDEWEB)

    Brons, Martijn; Rietveld, Piet [Department of Spatial Economics, Vrije Universiteit, De Boelelaan 1105, 1081 HV Amsterdam (Netherlands); Tinbergen Institute Amsterdam (TIA), Roetersstraat 31, 1018 WB Amsterdam (Netherlands); Nijkamp, Peter [Department of Spatial Economics, Vrije Universiteit, De Boelelaan 1105, 1081 HV Amsterdam (Netherlands); Tinbergen Institute Amsterdam (TIA), Roetersstraat 31, 1018 WB Amsterdam (Netherlands); The Netherlands Organisation of Scientific Research (NWO), postbus 93138 - 2509 AC Den Haag (Netherlands); Pels, Eric [Department of Spatial Economics, Vrije Universiteit, De Boelelaan 1105, 1081 HV Amsterdam (Netherlands)

    2008-09-15

    Automobile gasoline demand can be expressed as a multiplicative function of fuel efficiency, mileage per car and car ownership. This implies a linear relationship between the price elasticity of total fuel demand and the price elasticities of fuel efficiency, mileage per car and car ownership. In this meta-analytical study we aim to investigate and explain the variation in empirical estimates of the price elasticity of gasoline demand. A methodological novelty is that we use the linear relationship between the elasticities to develop a meta-analytical estimation approach based on a Seemingly Unrelated Regression (SUR) model with Cross Equation Restrictions. This approach enables us to combine observations of different elasticities and thus increase our sample size. Furthermore, it allows for a more detailed interpretation of our meta-regression results. The empirical results of the study demonstrate that the SUR approach leads to more precise results (i.e., lower standard errors) than a standard meta-analytical approach. We find that, with mean short run and long run price elasticities of - 0.34 and - 0.84, respectively, the demand for gasoline is not very price sensitive. Both in the short and the long run, the impact of a change in the gasoline price on demand is mainly driven by responses in fuel efficiency and mileage per car and to a slightly lesser degree by changes in car ownership. Furthermore, we find that study characteristics relating to the geographic area studied, the year of the study, the type of data used, the time horizon and the functional specification of the demand equation have a significant impact on the estimated value of the price elasticity of gasoline demand. (author)

  15. A meta-analysis of the price elasticity of gasoline demand. A SUR approach

    International Nuclear Information System (INIS)

    Brons, Martijn; Rietveld, Piet; Nijkamp, Peter; Pels, Eric

    2008-01-01

    Automobile gasoline demand can be expressed as a multiplicative function of fuel efficiency, mileage per car and car ownership. This implies a linear relationship between the price elasticity of total fuel demand and the price elasticities of fuel efficiency, mileage per car and car ownership. In this meta-analytical study we aim to investigate and explain the variation in empirical estimates of the price elasticity of gasoline demand. A methodological novelty is that we use the linear relationship between the elasticities to develop a meta-analytical estimation approach based on a Seemingly Unrelated Regression (SUR) model with Cross Equation Restrictions. This approach enables us to combine observations of different elasticities and thus increase our sample size. Furthermore, it allows for a more detailed interpretation of our meta-regression results. The empirical results of the study demonstrate that the SUR approach leads to more precise results (i.e., lower standard errors) than a standard meta-analytical approach. We find that, with mean short run and long run price elasticities of - 0.34 and - 0.84, respectively, the demand for gasoline is not very price sensitive. Both in the short and the long run, the impact of a change in the gasoline price on demand is mainly driven by responses in fuel efficiency and mileage per car and to a slightly lesser degree by changes in car ownership. Furthermore, we find that study characteristics relating to the geographic area studied, the year of the study, the type of data used, the time horizon and the functional specification of the demand equation have a significant impact on the estimated value of the price elasticity of gasoline demand. (author)

  16. Price elasticity matrix of demand in power system considering demand response programs

    Science.gov (United States)

    Qu, Xinyao; Hui, Hongxun; Yang, Shengchun; Li, Yaping; Ding, Yi

    2018-02-01

    The increasing renewable energy power generations have brought more intermittency and volatility to the electric power system. Demand-side resources can improve the consumption of renewable energy by demand response (DR), which becomes one of the important means to improve the reliability of power system. In price-based DR, the sensitivity analysis of customer’s power demand to the changing electricity prices is pivotal for setting reasonable prices and forecasting loads of power system. This paper studies the price elasticity matrix of demand (PEMD). An improved PEMD model is proposed based on elasticity effect weight, which can unify the rigid loads and flexible loads. Moreover, the structure of PEMD, which is decided by price policies and load types, and the calculation method of PEMD are also proposed. Several cases are studied to prove the effectiveness of this method.

  17. Comparing the Income Elasticity of Health Spending in Middle-Income and High-Income Countries: The Role of Financial Protection.

    Science.gov (United States)

    Vargas Bustamante, Arturo; V Shimoga, Sandhya

    2017-07-19

    As middle-income countries become more affluent, economically sophisticated and productive, health expenditure patterns are likely to change. Other socio-demographic and political changes that accompany rapid economic growth are also likely to influence health spending and financial protection. This study investigates the relationship between growth on per-capita healthcare expenditure and gross domestic product (GDP) in a group of 27 large middle-income economies and compares findings with those of 24 high-income economies from the Organization for Economic Cooperation and Development (OECD) group. This comparison uses national accounts data from 1995-2014. We hypothesize that the aggregated income elasticity of health expenditure in middle-income countries would be less than one (meaning healthcare is a normal good). An initial exploratory analysis tests between fixed-effects and random-effects model specifications. A fixed-effects model with time-fixed effects is implemented to assess the relationship between the two measures. Unit root, Hausman and serial correlation tests are conducted to determine model fit. Additional explanatory variables are introduced in different model specifications to test the robustness of our regression results. We include the out-of-pocket (OOP) share of health spending in each model to study the potential role of financial protection in our sample of high- and middle-income countries. The first-difference of study variables is implemented to address non-stationarity and cointegration properties. The elasticity of per-capita health expenditure and GDP growth is positive and statistically significant among sampled middle-income countries (51 per unit-growth in GDP) and high-income countries (50 per unit-growth in GDP). In contrast with previous research that has found that income elasticity of health spending in middle-income countries is larger than in high-income countries, our findings show that elasticity estimates can change if

  18. Comparing the Income Elasticity of Health Spending in Middle-Income and High-Income Countries: The Role of Financial Protection

    Science.gov (United States)

    Vargas Bustamante, Arturo; Shimoga, Sandhya V.

    2018-01-01

    Background: As middle-income countries become more affluent, economically sophisticated and productive, health expenditure patterns are likely to change. Other socio-demographic and political changes that accompany rapid economic growth are also likely to influence health spending and financial protection. Methods: This study investigates the relationship between growth on per-capita healthcare expenditure and gross domestic product (GDP) in a group of 27 large middle-income economies and compares findings with those of 24 high-income economies from the Organization for Economic Cooperation and Development (OECD) group. This comparison uses national accounts data from 1995-2014. We hypothesize that the aggregated income elasticity of health expenditure in middle-income countries would be less than one (meaning healthcare is a normal good). An initial exploratory analysis tests between fixed-effects and random-effects model specifications. A fixed-effects model with time-fixed effects is implemented to assess the relationship between the two measures. Unit root, Hausman and serial correlation tests are conducted to determine model fit. Additional explanatory variables are introduced in different model specifications to test the robustness of our regression results. We include the out-of-pocket (OOP) share of health spending in each model to study the potential role of financial protection in our sample of high- and middle-income countries. The first-difference of study variables is implemented to address non-stationarity and cointegration properties. Results: The elasticity of per-capita health expenditure and GDP growth is positive and statistically significant among sampled middle-income countries (51 per unit-growth in GDP) and high-income countries (50 per unit-growth in GDP). In contrast with previous research that has found that income elasticity of health spending in middle-income countries is larger than in high-income countries, our findings show that

  19. Price elasticity of demand for psychiatric consultation in a Nigerian ...

    African Journals Online (AJOL)

    Department of Psychiatry, University of Ibadan, University College Hospital, PMB 5116, Ibadan, Nigeria. ... changes on utilization of health services is the Price Elas- ticity of Demand .... World Bank), over 52% of the population earns below.

  20. Economic analysis of the water demand in the hotels and restaurants sector: Shadow prices and elasticities

    Science.gov (United States)

    Angulo, Ana; Atwi, Majed; Barberán, Ramón; Mur, Jesús

    2014-08-01

    Despite the growing economic importance of tourism, and its impact on relative water shortage, little is known about the role that water plays in the productive process of hotels and restaurants and, therefore, the possible implications of water demand management policy for this sector. This study aims to fill this gap. It is based on the microdata of 676 firms in the sector, operating in the city of Zaragoza (Spain) for a 12 year period. Based on the Translog cost function, we estimate the shadow price of water in the short run and, from a long-run perspective, its direct price elasticity, its cross elasticities relative to labor, capital, and supplies, and its elasticity with respect to the level of output. The results obtained show that water provides sector firms returns that are on average higher than its price, although in the case of hotels the margin is really narrow. This situation provides policy makers with a margin for applying price increases without affecting the sector's viability, with some caution in the case of hotels. Water demand elasticity equals -0.38 in the case of hotels, but it is not significant in the case of restaurants and bar-cafes; hence, only in hotels is there potential for influencing water use patterns, encouraging the resource's conservation through pricing policy. Moreover, capital is a substitutive factor of water, and the elasticity of water with respect to output is 0.40, all of which should also be considered by policy makers in water resource management.

  1. Price-elastic demand in deregulated electricity markets

    OpenAIRE

    Siddiqui, Afzal S.

    2003-01-01

    The degree to which any deregulated market functions efficiently often depends on the ability of market agents to respond quickly to fluctuating conditions. Many restructured electricity markets, however, experience high prices caused by supply shortages and little demand-side response. We examine the implications for market operations when a risk-averse retailer's end-use consumers are allowed to perceive real-time variations in the electricity spot price. Using a market-equilibrium mo...

  2. What U.S. data should be used to measure the price elasticity of demand for alcohol?

    Science.gov (United States)

    Ruhm, Christopher J; Jones, Alison Snow; McGeary, Kerry Anne; Kerr, William C; Terza, Joseph V; Greenfield, Thomas K; Pandian, Ravi S

    2012-12-01

    This paper examines how estimates of the price elasticity of demand for beer vary with the choice of alcohol price series examined. Our most important finding is that the commonly used ACCRA price data are unlikely to reliably indicate alcohol demand elasticities-estimates obtained from this source vary drastically and unpredictably. As an alternative, researchers often use beer taxes to proxy for alcohol prices. While the estimated beer taxes elasticities are more stable, there are several problems with using taxes, including difficulties in accounting for cross-price effects. We believe that the most useful estimates reported in this paper are obtained using annual Uniform Product Code (UPC) "barcode" scanner data on grocery store alcohol prices. These estimates suggest relatively low demand elasticity, probably around -0.3, with evidence that the elasticities are considerably overstated in models that control for beer but not wine or spirits prices. Copyright © 2012 Elsevier B.V. All rights reserved.

  3. PRICE ELASTICITY OF SUPPLY OF BOTTLED QUALITY WHITE WINE IN THE CZECH REPUBLIC

    Directory of Open Access Journals (Sweden)

    Pavel SYROVÁTKA

    2014-11-01

    Full Text Available This paper is focused on the supply of the Czech producers of bottled quality white wine. Namely, a dependence of their sales of this wine category on the market price of bottled quality white wine was examined. Monthly data from the CZSO and SZIF database, years 2004–2012, were used for the price-supply analysis. Price-supply reactions of the Czech wine producers were investigated through two-stage cointegration method developed by Engle and Granger. Short-term and long-term price elasticity of studied market supply was based on the error correction model designed and statistically verified by the authors.

  4. Does subsidy work? Price elasticity of demand for influenza vaccination among the elderly in Japan.

    Science.gov (United States)

    Kondo, Masahide; Hoshi, Shu-ling; Okubo, Ichiro

    2009-08-01

    Subsidy for influenza vaccination is often provided to the elderly in order to encourage them to receive a flu shot in developed countries. However, its effect on uptake rate, i.e., price elasticity of demand, has not been well studied. Japan's decentralised vaccination programme allows observation of various pairs in price and uptake rate of flu shots among the elderly by the municipality from 2001/2002 to 2004/2005 season. We combine our sample survey data (n=281), which monitor price, subsidy and uptake rate, with published data on local characteristics in order to estimate price elasticity of demand with panel model. We find price elasticity of demand for influenza vaccine: nearly zero in nationwide, nearly zero in urban area, and -1.07 in rural area. The results question the rationale for subsidy, especially in urban area. There are cases where maintaining or increasing the level of subsidy is not an efficient allocation of finite health care resources. When organising a vaccination programme, health manager should be careful about the balance between subsidy and other efforts in order to encourage the elderly to receive shots with price elasticity in mind.

  5. The Effects of Price Discrimination on the Elasticity of Demand for Higher Education.

    Science.gov (United States)

    Weinberg, Ira

    The purpose of this study was to determine what effect price discrimination (differential pricing) would have on institutional gross-fee income. Enrollment and tuition data were gathered from all schools in one particular market area for the years 1969-72. In this situation it was determined that overall demand for higher education was highly…

  6. A Note on R&D and Price Elasticity of Demand

    DEFF Research Database (Denmark)

    Schröder, Philipp J.H.; Schumacher, Dieter; Lucke, Dorothea

    2005-01-01

    This note explores the relationship between the price elasticity of demand and the R&D intensity of the product. We introduce the concept of R&D intensity into a standard Dixit-Stiglitz/Krugman-type setting. R&D activity is treated as a fixed cost of production. Within this framework, sectors...... with a higher R&D intensity show a lower price elasticity of demand. This proposition is confirmed by an empirical investigation of export demand for manufactured goods from major industrialised countries. Consequently, real exchange rate changes have an impact on the commodity structure of exports....

  7. The Pricing of European Options Under the Constant Elasticity of Variance with Stochastic Volatility

    Science.gov (United States)

    Bock, Bounghun; Choi, Sun-Yong; Kim, Jeong-Hoon

    This paper considers a hybrid risky asset price model given by a constant elasticity of variance multiplied by a stochastic volatility factor. A multiscale analysis leads to an asymptotic pricing formula for both European vanilla option and a Barrier option near the zero elasticity of variance. The accuracy of the approximation is provided in a rigorous manner. A numerical experiment for implied volatilities shows that the hybrid model improves some of the well-known models in view of fitting the data for different maturities.

  8. Estimation of Gasoline Price Elasticities of Demand for Automobile Fuel Efficiency in Korea: A Hedonic Approach

    Energy Technology Data Exchange (ETDEWEB)

    Lee, Sung Tae [Sungkyunkwan University, Seoul (Korea); Lee, Myunghun [Keimyung University, Taegu (Korea)

    2001-03-01

    This paper estimates the gasoline price elasticities of demand for automobile fuel efficiency in Korea to examine indirectly whether the government policy of raising fuel prices is effective in inducing less consumption of fuel, relying on a hedonic technique developed by Atkinson and Halvorsen (1984). One of the advantages of this technique is that the data for a single year, without involving variation in the price of gasoline, is sufficient in implementing this study. Moreover, this technique enables us to circumvent the multicollinearity problem, which had reduced reliability of the results in previous hedonic studies. The estimated elasticities of demand for fuel efficiency with respect to the price of gasoline, on average, is 0.42. (author). 30 refs., 3 tabs.

  9. Price elasticity and pharmaceutical selection: the influence of managed care.

    Science.gov (United States)

    Domino, Marisa Elena; Salkever, David S

    2003-07-01

    State Medicaid programs are turning increasingly to managed care to control expenditures, although the types of managed care programs in use have changed dramatically. Little is known about the influence of the shifting Medicaid managed care arena on treatment decisions. This paper investigates factors affecting the selection of treatments for depression by providers participating in either of two Medicaid managed care programs. Of particular interest is the influence of medication price on the choice of treatment, since one vehicle through which managed care organizations can reduce total expenditures is by increasing the price sensitivity of participating providers. We take a new approach by phrasing the problem as a discrete choice, using a nested multinomial logit model for the analyses. Contrary to earlier literature, we find some evidence that physicians in both programs do take price into consideration when selecting among treatment options. HMO providers in particular demonstrate increased price sensitivity in the two most commonly prescribed categories of antidepressants. Copyright 2002 John Wiley & Sons, Ltd.

  10. Pay less, consume more? The price elasticity of home care for the disabled elderly in France.

    Science.gov (United States)

    Roquebert, Quitterie; Tenand, Marianne

    2017-09-01

    Little is known about the price sensitivity of demand for home care of the disabled elderly. We partially fill this knowledge gap by using administrative data on the beneficiaries of the main French home care subsidy program in a department and exploiting interindividual variation in provider prices. We address the potential endogeneity of prices by taking advantage of the unequal spatial coverage of providers and instrumenting price by the number of municipalities served by a provider. We estimate a price elasticity of around -0.4 that is significantly different from both 0 and -1. This less than proportionate response of consumption to price has implications for the efficiency and redistributive impact of variation in the level of copayments in home care subsidy schemes. Copyright © 2017 John Wiley & Sons, Ltd.

  11. Hourly price elasticity pattern of electricity demand in the German day-ahead market

    OpenAIRE

    Knaut, Andreas; Paulus, Simon

    2016-01-01

    System security in electricity markets relies crucially on the interaction between demand and supply over time. However, research on electricity markets has been mainly focusing on the supply side arguing that demand is rather inelastic. Assuming perfectly inelastic demand might lead to delusive statements regarding the price formation in electricity markets. In this article we quantify the short-run price elasticity of electricity demand in the German day-ahead market and show that demand is...

  12. Depressive symptoms, smoking, and cigarette price elasticity: results from a population-based survey in Taiwan.

    Science.gov (United States)

    Chang, Hung-Hao; Chiang, Tung-Liang

    2009-01-01

    To understand the association between depressive symptoms and smoking. In addition, we investigate how smokers with and without depressive symptoms may respond to cigarette price change differently. We used data drawn from a nationally representative survey in Taiwan. Totally, 13,030 male adults were included in the analysis. Depressive symptoms were measured using the Taiwanese depression questionnaire. A logistic regression model was estimated to examine the odds ratio of smoking for those with depressive symptoms versus those without depressive symptoms. Focused on smokers, the ordinary least squares multivariate regression method was used to estimate the cigarette price elasticity. Compared to those without depressive symptoms, those with depressive symptoms were more likely to smoke (44.5 vs. 50.1%) and consume more cigarettes per day (18.4 vs. 21.0). The odds ratio of smoking for those with depressive symptoms, adjusted for demographic variables, was 1.3 (95% confidence interval, 1.1-1.6). The cigarette price elasticity was estimated at -0.82 and -0.41 for depressive smokers and non-depressive smokers, respectively. Although the association between depression and smoking had been documented, this study contributes to previous literature by investigating the extent to which cigarette price elasticities may differ between smokers with and without depressive symptoms. Results indicate that depressive smokers are more sensitive to the change of cigarette price. Therefore, tax/price increases can also be a very effective means of tobacco control for depressive smokers.

  13. The price elasticity of energy demand. The state of affairs in 1998

    International Nuclear Information System (INIS)

    De Groot, A.; Muskens, J; Velthuijsen, J.W.

    1998-11-01

    Within the framework of further development of energy taxes it is important to investigate the validity of the present tools by means of which the effects of energy taxes can be predicted. The estimation of the price elasticity of the energy consumption is an important aspect in the use of those tools. The results of a 1990 study on the possible effects of an energy tax are re-evaluated, based on a state-of-the-art of theoretical and empirical economic science with respect to elasticities. Also attention is paid to how the elasticities, as applied in relevant energy models, must be assessed. 43 refs

  14. What U.S. Data Should be Used to Measure the Price Elasticity of Demand for Alcohol?*

    Science.gov (United States)

    Ruhm, Christopher J.; Jones, Alison Snow; McGeary, Kerry Anne; Kerr, William C.; Terza, Joseph V.; Greenfield, Thomas K.; Pandian, Ravi S.

    2012-01-01

    This paper examines how estimates of the price elasticity of demand for beer vary with the choice of alcohol price series examined. Our most important finding is that the commonly used ACCRA price data are unlikely to reliably indicate alcohol demand elasticities—estimates obtained from this source vary drastically and unpredictably. As an alternative, researchers often use beer taxes to proxy for alcohol prices. While the estimated beer taxes elasticities are more stable, there are several problems with using taxes, including difficulties in accounting for cross-price effects. We believe that the most useful estimates reported in this paper are obtained using annual Uniform Product Code (UPC) “barcode” scanner data on grocery store alcohol prices. These estimates suggest relatively low demand elasticity, probably around −0.3, with evidence that the elasticities are considerably overstated in models that control for beer but not wine or spirits prices. PMID:23022631

  15. Effect of price elasticity of demand in monopolies with gradient adjustment

    International Nuclear Information System (INIS)

    Cavalli, Fausto; Naimzada, Ahmad

    2015-01-01

    Highlights: •A monopoly with isoelastic demand function is studied. •Reduced rationality monopolist uses gradient adjustment. •If marginal cost is small, increasing elasticity leads to stable dynamics. •For large marginal cost, dynamic can be unstable for both small and large elasticity. -- Abstract: We study a monopolistic market characterized by a constant elasticity demand function, in which the firm technology is described by a linear total cost function. The firm is assumed to be boundedly rational and to follow a gradient rule to adjust the production level in order to optimize its profit. We focus on what happens on varying the price elasticity of demand, studying the effect on the equilibrium stability. We prove that, depending on the relation between the market size and the marginal cost, two different scenarios are possible, in which elasticity has either a stabilizing or a mixed stabilizing/destabilizing effect

  16. Price elasticity of tobacco products among economic classes in India, 2011-2012.

    Science.gov (United States)

    Selvaraj, Sakthivel; Srivastava, Swati; Karan, Anup

    2015-12-09

    The objectives of this study are to: (1) examine the pattern of price elasticity of three major tobacco products (bidi, cigarette and leaf tobacco) by economic groups of population based on household monthly per capita consumption expenditure in India and (2) assess the effect of tax increases on tobacco consumption and revenue across expenditure groups. Data from the 2011-2012 nationally representative Consumer Expenditure Survey from 101,662 Indian households were used. Households which consumed any tobacco or alcohol product were retained in final models. The study draws theoretical frameworks from a model using the augmented utility function of consumer behaviour, with a two-stage two-equation system of unit values and budget shares. Primary outcome measures were price elasticity of demand for different tobacco products for three hierarchical economic groups of population and change in tax revenue due to changes in tax structure. We finally estimated price elasticity of demand for bidi, cigarette and leaf tobacco and effects of changes in their tax rates on demand for these tobacco products and tax revenue. Own price elasticities for bidi were highest in the poorest group (-0.4328) and lowest in the richest group (-0.0815). Cigarette own price elasticities were -0.832 in the poorest group and -0.2645 in the richest group. Leaf tobacco elasticities were highest in the poorest (-0.557) and middle (-0.4537) groups. Poorer group elasticities were the highest, indicating that poorer consumers are more price responsive. Elasticity estimates show positive distributional effects of uniform bidi and cigarette taxation on the poorest consumers, as their consumption is affected the most due to increases in taxation. Leaf tobacco also displayed moderate elasticities in poor and middle tertiles, suggesting that tax increases may result in a trade-off between consumption decline and revenue generation. A broad spectrum rise in tax rates across all products is critical for

  17. Price elasticity of tobacco products among economic classes in India, 2011–2012

    Science.gov (United States)

    Selvaraj, Sakthivel; Srivastava, Swati; Karan, Anup

    2015-01-01

    Objectives The objectives of this study are to: (1) examine the pattern of price elasticity of three major tobacco products (bidi, cigarette and leaf tobacco) by economic groups of population based on household monthly per capita consumption expenditure in India and (2) assess the effect of tax increases on tobacco consumption and revenue across expenditure groups. Setting Data from the 2011–2012 nationally representative Consumer Expenditure Survey from 101 662 Indian households were used. Participants Households which consumed any tobacco or alcohol product were retained in final models. Primary outcome measures The study draws theoretical frameworks from a model using the augmented utility function of consumer behaviour, with a two-stage two-equation system of unit values and budget shares. Primary outcome measures were price elasticity of demand for different tobacco products for three hierarchical economic groups of population and change in tax revenue due to changes in tax structure. We finally estimated price elasticity of demand for bidi, cigarette and leaf tobacco and effects of changes in their tax rates on demand for these tobacco products and tax revenue. Results Own price elasticities for bidi were highest in the poorest group (−0.4328) and lowest in the richest group (−0.0815). Cigarette own price elasticities were −0.832 in the poorest group and −0.2645 in the richest group. Leaf tobacco elasticities were highest in the poorest (−0.557) and middle (−0.4537) groups. Conclusions Poorer group elasticities were the highest, indicating that poorer consumers are more price responsive. Elasticity estimates show positive distributional effects of uniform bidi and cigarette taxation on the poorest consumers, as their consumption is affected the most due to increases in taxation. Leaf tobacco also displayed moderate elasticities in poor and middle tertiles, suggesting that tax increases may result in a trade-off between consumption decline and

  18. Price Elasticity of Demand: An A-Level Economics Revision Exercise.

    Science.gov (United States)

    Williams, Paul

    1992-01-01

    Presents a review exercise requiring students to sort diagrams and descriptions of price elasticity of demand. Reports that students are given jumbled diagrams and explanations that they must arrange in proper form. Reveals that some items are designed as distractors. (SG)

  19. Price elasticity of demand for crude oil: estimates for 23 countries

    International Nuclear Information System (INIS)

    Cooper, J.C.B.

    2003-01-01

    This paper uses a multiple regression model derived from an adaptation of Nerlove's partial adjustment model to estimate both the short-run and long-run elasticities of demand for crude oil in 23 countries. The estimates so obtained confirm that the demand for crude oil internationally is highly insensitive to changes in price. (author)

  20. Tuition Elasticity of the Demand for Higher Education among Current Students: A Pricing Model.

    Science.gov (United States)

    Bryan, Glenn A.; Whipple, Thomas W.

    1995-01-01

    A pricing model is offered, based on retention of current students, that colleges can use to determine appropriate tuition. A computer-based model that quantifies the relationship between tuition elasticity and projected net return to the college was developed and applied to determine an appropriate tuition rate for a small, private liberal arts…

  1. Modeling of demand response in electricity markets : effects of price elasticity

    International Nuclear Information System (INIS)

    Banda, E.C.; Tuan, L.A.

    2007-01-01

    A design mechanism for the optimal participation of customer load in electricity markets was presented. In particular, this paper presented a modified market model for the optimal procurement of interruptible loads participating in day-ahead electricity markets. The proposed model considers the effect of price elasticity and demand-response functions. The objective was to determine the role that price elasticity plays in electricity markets. The simulation model can help the Independent System Operator (ISO) identify customers offering the lowest price of interruptible loads and load flow patterns that avoid problems associated with transmission congestion and transmission losses. Various issues associated with procurement of demand-response offerings such as advance notification, locational aspect of load, and power factor of the loads, were considered. It was shown that demand response can mitigate price volatility by allowing the ISO to maintain operating reserves during peak load periods. It was noted that the potential benefits of the demand response program would be reduced when price elasticity of demand is taken into account. This would most likely occur in actual developed open electricity markets, such as Nordpool. This study was based on the CIGRE 32-bus system, which represents the Swedish high voltage power system. It was modified for this study to include a broad range of customer characteristics. 18 refs., 2 tabs., 14 figs

  2. Microeconomics of the Productivity, Price Indicators and Farm Incomes. Analytical Approach

    Directory of Open Access Journals (Sweden)

    Włodzimierz Rembisz

    2011-07-01

    Full Text Available The paper develops a farm producer behavior type model to analyze the impact of a input productivity and price change on farm incomes. The theoretical analysis shows the consequences of the balance between the increase of production factor prices and their productivity improvement in the condition of stable procurement price for the farm producers income. The cost effect of the production factors price increment and its neutralization by productivity (TFP-type growth is examined as well as some aspects of the inputs shares (returns and costs in the produce value. The article argues that labor input productivity as an endogenous factor, is an essential for farm incomes growth assuming the specified type of the farm producer utility function (its equations and variables as well as no the compensative procurement price change conditions. Some empirical evidence is attached however more work in that respect is foreseen.

  3. China's medical savings accounts: an analysis of the price elasticity of demand for health care.

    Science.gov (United States)

    Yu, Hao

    2017-07-01

    Although medical savings accounts (MSAs) have drawn intensive attention across the world for their potential in cost control, there is limited evidence of their impact on the demand for health care. This paper is intended to fill that gap. First, we built up a dynamic model of a consumer's problem of utility maximization in the presence of a nonlinear price schedule embedded in an MSA. Second, the model was implemented using data from a 2-year MSA pilot program in China. The estimated price elasticity under MSAs was between -0.42 and -0.58, i.e., higher than that reported in the literature. The relatively high price elasticity suggests that MSAs as an insurance feature may help control costs. However, the long-term effect of MSAs on health costs is subject to further analysis.

  4. Price trends and income inequalities: will Sub-Saharan-Africa reduce the gap?

    OpenAIRE

    Caracciolo, Francesco; Santeramo, Fabio Gaetano

    2012-01-01

    During the past decade, commodities prices have risen substantially and the trend is likely to persist as attested by recent OECD-FAO projections. The recent debate has not reached a clear consensus on the effects of this trend on poverty and income inequality in LDCs, thus complicating the policy planning process. Our paper aims at analyzing the likely welfare and income inequality impacts of food price trends in three Sub-Saharan countries, namely Tanzania, Ghana and Ethiopia. Moreover, we ...

  5. Study design for a clinical trial to examine food price elasticity among participants in federal food assistance programs: A laboratory-based grocery store study

    Directory of Open Access Journals (Sweden)

    Zach Conrad

    2018-06-01

    Full Text Available We present a protocol for a study investigating the effect of food price changes on purchasing decisions among individuals participating in federal food assistance programs and among those not participating in these programs. We use a laboratory-based grocery store design, which provides greater control over factors influencing food purchasing than in situ experiments in actual grocery stores. We focus primarily, but not exclusively, on eggs because they are highly nutritious, easy to prepare, can be included in many different dishes, and are a part of a wide range of cultural food menus. The primary aim of this study is to compare the own-and cross-price elasticity of eggs between individuals participating in federal food assistance programs and those not participating in these programs. Our secondary aims are to 1 compare the own- and cross-price elasticity of eggs between overweight/obese individuals and non-overweight/obese individuals, 2 examine whether delay discounting moderates the effect of income on own- and cross-price elasticity, 3 examine whether subjective social status moderates the effect of participation in federal food assistance programs on the purchase of high nutrient-dense foods, and 4 examine whether usual psychological stress level moderates the effect of subjective social status on the purchase of high-nutrient dense foods. The results of this study will provide information about the drivers of food demand among low-income adults. A better understanding of these drivers is needed to develop effective nutrition interventions for this large population. Keywords: Price elasticity, Food assistance, Egg, Obesity, Social status, Stress

  6. Reflections on Costing, Pricing and Income Measurement at UK Higher Education Institutions

    Science.gov (United States)

    Oduoza, Chike F.

    2009-01-01

    In these days of radical contraction of funding and expansion in student numbers, universities are under pressure to prioritise their resources, as well as to achieve effective costing and pricing to support judgement and decision making for funding and any external work undertaken. This study reviews costing, pricing and income measurement in…

  7. Estimating cross-price elasticity of e-cigarettes using a simulated demand procedure.

    Science.gov (United States)

    Grace, Randolph C; Kivell, Bronwyn M; Laugesen, Murray

    2015-05-01

    Our goal was to measure the cross-price elasticity of electronic cigarettes (e-cigarettes) and simulated demand for tobacco cigarettes both in the presence and absence of e-cigarette availability. A sample of New Zealand smokers (N = 210) completed a Cigarette Purchase Task to indicate their demand for tobacco at a range of prices. They sampled an e-cigarette and rated it and their own-brand tobacco for favorability, and indicated how many e-cigarettes and regular cigarettes they would purchase at 0.5×, 1×, and 2× the current market price for regular cigarettes, assuming that the price of e-cigarettes remained constant. Cross-price elasticity for e-cigarettes was estimated as 0.16, and was significantly positive, indicating that e-cigarettes were partially substitutable for regular cigarettes. Simulated demand for regular cigarettes at current market prices decreased by 42.8% when e-cigarettes were available, and e-cigarettes were rated 81% as favorably as own-brand tobacco. However when cigarettes cost 2× the current market price, significantly more smokers said they would quit (50.2%) if e-cigarettes were not available than if they were available (30.0%). Results show that e-cigarettes are potentially substitutable for regular cigarettes and their availability will reduce tobacco consumption. However, e-cigarettes may discourage smokers from quitting entirely as cigarette price increases, so policy makers should consider maintaining a constant relative price differential between e-cigarettes and tobacco cigarettes. © The Author 2014. Published by Oxford University Press on behalf of the Society for Research on Nicotine and Tobacco. All rights reserved. For permissions, please e-mail: journals.permissions@oup.com.

  8. The income elasticity of health care spending in developing and developed countries.

    Science.gov (United States)

    Farag, Marwa; NandaKumar, A K; Wallack, Stanley; Hodgkin, Dominic; Gaumer, Gary; Erbil, Can

    2012-06-01

    To date, international analyses on the strength of the relationship between country-level per capita income and per capita health expenditures have predominantly used developed countries' data. This study expands this work using a panel data set for 173 countries for the 1995-2006 period. We found that health care has an income elasticity that qualifies it as a necessity good, which is consistent with results of the most recent studies. Furthermore, we found that health care spending is least responsive to changes in income in low-income countries and most responsive to in middle-income countries with high-income countries falling in the middle. Finally, we found that 'Voice and Accountability' as an indicator of good governance seems to play a role in mobilizing more funds for health.

  9. Monetary Policy Rules, Supply Shocks, and the Price-Level Elasticity of Aggregate Demand: A Graphical Examination.

    Science.gov (United States)

    Kyer, Ben L.; Maggs, Gary E.

    1995-01-01

    Utilizes two-dimensional price and output graphs to demonstrate the way that the price-level elasticity of aggregate demand affects alternative monetary policy rules designed to cope with random aggregate supply shocks. Includes graphs illustrating price-level, real Gross Domestic Product (GDP), nominal GDP, and nominal money supply targeting.…

  10. The role of price elastic demand in market power in the Nordic electricity markets

    International Nuclear Information System (INIS)

    Ravn, H.F.

    2004-01-01

    The paper discusses the modelling and analysis of market power and price elastic demand in the Nordic electricity spot market, Nordpool. The modelling of market power in the electricity sector must take into account a number of features that are specific to the electricity sector. First, electricity cannot be stored, but must be produced simultaneously with consumption. This aspect is, however, modified by the possibility of using hydro reservoirs as an indirect electricity storage. Second, the electricity transmission network plays an important role by breaking the market into several geographically separate sub-markets with different prices. Moreover, the specific bottlenecks may differ from hour to hour, according to the balance between supply and demand in each sub-market. Third, the demand side is presently characterised by very limited experience with hour to-hour-changes in electricity prices and very limited experience with short time adjustments of electricity consumption in response to changes in the electricity price. In the present paper three basic models for supply side competition on the Nordpool spot market will be presented, viz., perfect competition, Cournot competition and Supply Function Equilibrium. The models represent price and quantity settlement, including determination of price areas (bottle necks), in accordance with the way the Nordpool market functions. The models will incorporate electricity demand which is responsive to the electricity price. The paper describes the role of demand response for the determination of the electricity prices in each of the three supply side competition models. (au)

  11. Income Elasticity of Culture Expenses in Polish Provinces

    Directory of Open Access Journals (Sweden)

    Suchecki Adam Mateusz

    2015-12-01

    Full Text Available Decentralisation of public finance in Poland was an important element of changes in the political system of the country. As a result, some tasks of the state were transferred to the local government level. The purpose of this paper is to analyse the budget expenses on cultural tasks incurred by local government units in Poland in the years 2003–2012 and outlines the legal frameworks of the local government financial management in Poland. Using a model based on the double logarithmic function, the author tests a hypothesis, according to which the broadly understood culture might be regarded as a necessity or luxury good, depending on the value of the coefficient of elasticity of the expenses on culture incurred by local government units in relation to the gross regional product.

  12. Understanding Heterogeneity in Price Elasticities in the Demand for Alcohol for Older Individuals

    Science.gov (United States)

    Ayyagari, Padmaja; Deb, Partha; Fletcher, Jason; Gallo, William; Sindelar, Jody L.

    2013-01-01

    This paper estimates the price elasticity of demand for alcohol using Health and Retirement Study data. To account for unobserved heterogeneity in price responsiveness, we use finite mixture models. We recover two latent groups, one is significantly responsive to price, but the other is unresponsive. The group with greater responsiveness is disadvantaged in multiple domains, including health, financial resources, education and perhaps even planning abilities. These results have policy implications. The unresponsive group drinks more heavily, suggesting that a higher tax would fail to curb the negative alcohol-related externalities. In contrast, the more disadvantaged group is more responsive to price, thus suffering greater deadweight loss, yet this group consumes fewer drinks per day and might be less likely to impose negative externalities. PMID:22162113

  13. The determinants and income elasticities of direct and indirect sports expenditure categories.

    NARCIS (Netherlands)

    Thibaut, E.; Eakins, J.; Vos, S.B.; Scheerder, J.

    2018-01-01

    Research question: The current study investigates the income elasticities and socio-economic determinants of direct and indirect sports expenditure categories by means of a log normal hurdle regression. Research methods: The data stem from a representative sample of 3005 Flemish families with

  14. National Income Elasticities of Educational and Non-Educational Government Expenditures Among Selected Nations.

    Science.gov (United States)

    Choi, Jae W.

    The main purposes of this study are to investigate through national income elasticities the amounts of governmental expenditure in 30 countries on total governmental service and on selected services of education, defense, health, and social welfare over the period from 1950 to 1967. Analysis of data available from various statistical sources, such…

  15. Price elasticities in the German Statutory Health Insurance market before and after the health care reform of 2009.

    Science.gov (United States)

    Pendzialek, Jonas B; Danner, Marion; Simic, Dusan; Stock, Stephanie

    2015-05-01

    This paper investigates the change in price elasticity of health insurance choice in Germany after a reform of health insurance contributions. Using a comprehensive data set of all sickness funds between 2004 and 2013, price elasticities are calculated both before and after the reform for the entire market. The general price elasticity is found to be increased more than 4-fold from -0.81 prior to the reform to -3.53 after the reform. By introducing a new kind of health insurance contribution the reform seemingly increased the price elasticity of insured individuals to a more appropriate level under the given market parameters. However, further unintended consequences of the new contribution scheme were massive losses of market share for the more expensive sickness funds and therefore an undivided focus on pricing as the primary competitive element to the detriment of quality. Copyright © 2015 Elsevier Ireland Ltd. All rights reserved.

  16. Estimating Price Elasticity of Demand for Motor Fuel in the Transport Sectors

    Directory of Open Access Journals (Sweden)

    Olga Vasilyevna Mazurova

    2015-03-01

    Full Text Available Modeling of long-term forecasts of prices and demand on regional energy markets requires accounting for the future changes in the interactions between the greater economy and its energy sector, along with the possible emergence of new factors and specific regional features determining those interactions. The proposed approach allows the study of a correlation between demand and prices for motor fuel, taking into account the competition of energy carriers, the dynamics of energy prices, resource constraints, the use of new technologies and the uncertainty of input data. The main feature of the proposed approach is the combined estimation of the price elasticity of demand for motor fuel with optimization of fuel supply in the region. Thus the author determined elasticity of demand based on the comparison of economic efficiency of the use of different fuels. The study includes results of experimental calculations and forecasted price according to demand for motor fuel in freight transportation for the expected development conditions of the Far Eastern federal district

  17. Functional forms and price elasticities in a discrete continuous choice model of the residential water demand

    Science.gov (United States)

    Vásquez Lavín, F. A.; Hernandez, J. I.; Ponce, R. D.; Orrego, S. A.

    2017-07-01

    During recent decades, water demand estimation has gained considerable attention from scholars. From an econometric perspective, the most used functional forms include log-log and linear specifications. Despite the advances in this field and the relevance for policymaking, little attention has been paid to the functional forms used in these estimations, and most authors have not provided justifications for their selection of functional forms. A discrete continuous choice model of the residential water demand is estimated using six functional forms (log-log, full-log, log-quadratic, semilog, linear, and Stone-Geary), and the expected consumption and price elasticity are evaluated. From a policy perspective, our results highlight the relevance of functional form selection for both the expected consumption and price elasticity.

  18. Medicine prices, availability, and affordability in 36 developing and middle-income countries: a secondary analysis.

    Science.gov (United States)

    Cameron, A; Ewen, M; Ross-Degnan, D; Ball, D; Laing, R

    2009-01-17

    WHO and Health Action International (HAI) have developed a standardised method for surveying medicine prices, availability, affordability, and price components in low-income and middle-income countries. Here, we present a secondary analysis of medicine availability in 45 national and subnational surveys done using the WHO/HAI methodology. Data from 45 WHO/HAI surveys in 36 countries were adjusted for inflation or deflation and purchasing power parity. International reference prices from open international procurements for generic products were used as comparators. Results are presented for 15 medicines included in at least 80% of surveys and four individual medicines. Average public sector availability of generic medicines ranged from 29.4% to 54.4% across WHO regions. Median government procurement prices for 15 generic medicines were 1.11 times corresponding international reference prices, although purchasing efficiency ranged from 0.09 to 5.37 times international reference prices. Low procurement prices did not always translate into low patient prices. Private sector patients paid 9-25 times international reference prices for lowest-priced generic products and over 20 times international reference prices for originator products across WHO regions. Treatments for acute and chronic illness were largely unaffordable in many countries. In the private sector, wholesale mark-ups ranged from 2% to 380%, whereas retail mark-ups ranged from 10% to 552%. In countries where value added tax was applied to medicines, the amount charged varied from 4% to 15%. Overall, public and private sector prices for originator and generic medicines were substantially higher than would be expected if purchasing and distribution were efficient and mark-ups were reasonable. Policy options such as promoting generic medicines and alternative financing mechanisms are needed to increase availability, reduce prices, and improve affordability.

  19. Long term fuel price elasticity: effects on mobility tool ownership and residential location choice - Final report

    Energy Technology Data Exchange (ETDEWEB)

    Erath, A.; Axhausen, K. W.

    2010-04-15

    This comprehensive final report for the Swiss Federal Office of Energy (SFOE) examines the long-term effects of fuel price elasticity. The study analyses how mobility tool usage and ownership as well as residence location choice are affected by rising fuel costs. Based on econometric models, long-term fuel price elasticity is derived. The authors quote that the demand reactions to higher fuel prices mainly observed are the reduction of mileage and the consideration of smaller-engined and diesel-driven cars. As cars with natural gas powered engines and electric drives were hardly considered in the survey, the results of the natural gas model can, according to the authors, only serve as a trend. No stable model could be estimated for the demand and usage of electric cars. A literature overview is presented and the design of the survey is discussed, whereby socio-demographical variables and the effects of price and residence changes are discussed. Modelling of mobility tool factors and results obtained are looked at. Finally, residence choice factors are modelled and discussed. Several appendices complete the report.

  20. Linear models of income patterns in consumer demand for foods and evaluation of its elasticity

    Directory of Open Access Journals (Sweden)

    Pavel Syrovátka

    2005-01-01

    Full Text Available The paper is focused on the use of the linear constructions for developing of Engel’s demand models in the field of the food-consumer demand. In the theoretical part of the paper, the linear approximations of this demand models are analysed on the bases of the linear interpolation. In the same part of this text, the hyperbolic elasticity function was defined for the linear Engel model. The behaviour of the hyperbolic elasticity function and its properties were consequently investigated too. The behaviour of the determined elasticity function was investigated according to the values of the intercept point and the direction parameter in the original linear Engel model. The obtained theoretical findings were tested using the real data of Czech Statistical Office. The developed linear Engel model was explicitly dynamised, because the achieved database was formed into the time series. With respect to the two variables definitions of the hyperbolic function in the theoretical part of the text, the determined dynamic model of the Engel demand for food was transformed into the form with parametric intercept point:ret* = At + 0.0946 · rmt*,where the values of absolute member are defined as:At = 1773.0973 + 9.3064 · t – 0.3023 · t2; (t = 1, 2, ... 32.The value of At in the parametric linear model of Engel consumer demand for food was during the observed period (1995–2002 always positive. Thus, the hyperbolic elasticity function achieved the elasticity coefficients from the interval:ηt ∈〈+0; +1.Within quantitative analysis of Engel demand for food in the Czech Republic during the given time period, it was founded, that income elasticity of food expenditures of the average Czech household was moved between +0.4080 and +0.4511. The Czech-household demand for food is thus income inelastic with the normal income reactions.

  1. Price elasticity of demand for psychiatric consultation in a Nigerian psychiatric service.

    Science.gov (United States)

    Esan, Oluyomi

    2016-12-01

    This paper addresses price elasticity of demand (PED) in a region where most patients make payments for consultations out of pocket. PED is a measure of the responsiveness of the quantity demanded of goods or services to changes in price. The study was done in the context of an outpatient psychiatric clinic in a sub -Saharan African country. The study was performed at the University College Hospital (UCH), Ibadan, Nigeria. Aggregate data were collected on weekly clinic attendance over a 24-month period October 2008 - September 2010 representing 12 months before, to 12months after a 67% increase in price of outpatient psychiatric consultation. The average weekly clinic attendance prior to the increase was compared to the average clinic attendance after the price increase. Arc-PED for consultation was also estimated. Clinic attendance dropped immediately and significantly in the weeks following the price increase. There was a 34.4% reduction in average weekly clinic attendance. Arc-PED for psychiatric consultation was -0.85. In comparison to reported PED on health care goods and services, this study finds a relatively high PED in psychiatric consultation following an increase in price of user fees of psychiatric consultation.

  2. When do relative prices matter for measuring income inequality? The case of food prices in Mozambique

    DEFF Research Database (Denmark)

    Arndt, Channing; Jones, Edward Samuel; Salvucci, Vincenzo

    2015-01-01

    are accounted for, inequality of real consumption increases substantially. We obtain this result by constructing a price deflator that reflects divergent price dynamics of different product categories. Since the main factors driving this result prevail in other developing countries, it is likely that inequality...

  3. Price and expenditure elasticities of residential energy demand during urbanization: An empirical analysis based on the household-level survey data in China

    International Nuclear Information System (INIS)

    Sun, Chuanwang; Ouyang, Xiaoling

    2016-01-01

    Urbanization, one of the most obvious characteristics of economic growth in China, has an apparent “lock-in effect” on residential energy consumption pattern. It is expected that residential sector would become a major force that drives China's energy consumption after urbanization process. We estimate price and expenditure elasticities of residential energy demand using data from China's Residential Energy Consumption Survey (CRECS) that covers households at different income levels and from different regional and social groups. Empirical results from the Almost Ideal Demand System model are in accordance with the basic expectations: the demands for electricity, natural gas and transport fuels are inelastic in the residential sector due to the unreasonable pricing mechanism. We further investigate the sensitivities of different income groups to prices of the three types of energy. Policy simulations indicate that rationalizing energy pricing mechanism is an important guarantee for energy sustainable development during urbanization. Finally, we put forward suggestions on energy pricing reform in the residential sector based on characteristics of China's undergoing urbanization process and the current energy consumption situations.

  4. A Diffusion Model Incorporating Product Benefits, Price, Income and Information

    OpenAIRE

    Dan Horsky

    1990-01-01

    We start by assuming that a major benefit of many new durable products such as dishwashers and microwave ovens is time savings. Others, such as VCRs, also enhance the value of our leisure time. Using a household production framework we demonstrate that a utility maximizing individual will have a reservation price for the product which is a function of the product benefits and his wage rate. By assuming that the wage rate has an extreme value distribution across the population, we are able to ...

  5. Policy options for pharmaceutical pricing and purchasing: issues for low- and middle-income countries.

    Science.gov (United States)

    Nguyen, Tuan Anh; Knight, Rosemary; Roughead, Elizabeth Ellen; Brooks, Geoffrey; Mant, Andrea

    2015-03-01

    Pharmaceutical expenditure is rising globally. Most high-income countries have exercised pricing or purchasing strategies to address this pressure. Low- and middle-income countries (LMICs), however, usually have less regulated pharmaceutical markets and often lack feasible pricing or purchasing strategies, notwithstanding their wish to effectively manage medicine budgets. In high-income countries, most medicines payments are made by the state or health insurance institutions. In LMICs, most pharmaceutical expenditure is out-of-pocket which creates a different dynamic for policy enforcement. The paucity of rigorous studies on the effectiveness of pharmaceutical pricing and purchasing strategies makes it especially difficult for policy makers in LMICs to decide on a course of action. This article reviews published articles on pharmaceutical pricing and purchasing policies. Many policy options for medicine pricing and purchasing have been found to work but they also have attendant risks. No one option is decisively preferred; rather a mix of options may be required based on country-specific context. Empirical studies in LMICs are lacking. However, risks from any one policy option can reasonably be argued to be greater in LMICs which often lack strong legal systems, purchasing and state institutions to underpin the healthcare system. Key factors are identified to assist LMICs improve their medicine pricing and purchasing systems. Published by Oxford University Press in association with The London School of Hygiene and Tropical Medicine © The Author 2014; all rights reserved.

  6. Higher food prices may threaten food security status among American low-income households with children.

    Science.gov (United States)

    Zhang, Qi; Jones, Sonya; Ruhm, Christopher J; Andrews, Margaret

    2013-10-01

    Children in food-insecure households are more likely to experience poorer health function and worse academic achievement. To investigate the relation between economic environmental factors and food insecurity among children, we examined the relation between general and specific food prices (fast food, fruits and vegetables, beverages) and risk of low (LFS) and very low food security (VLFS) status among low-income American households with children. Using information for 27,900 child-year observations from the Early Childhood Longitudinal Study-Kindergarten Class of 1998-1999 linked with food prices obtained from the Cost of Living Data of the Council for Community and Economic Research, formerly known as the American Chamber of Commerce Researchers' Association, fixed effects models were estimated within stratified income groups. Higher overall food prices were associated with increased risk of LFS and VLFS (coefficient = 0.617; P security status, even when controlling for general food prices. Thus, although food price changes were strongly related to food security status among low-income American households with children, the effects were not uniform across types of food. These relations should be accounted for when implementing policies that change specific food prices.

  7. MECHANISM TRANSFER PRICING AND THE NEED INTRODUCTION COMMON CONSOLIDATED CORPORATE INCOME TAX TRANSNATIONAL

    Directory of Open Access Journals (Sweden)

    Gheorghe Grigorescu

    2013-06-01

    Full Text Available Transfer pricing mechanism is a tool commonly used to transfer the tax base in countries with high tax countries with lower taxation. In the European Union the financial operations generate tax revenue losses. In an attempt to limit manipulation by corporate tax systems, many public authorities have introduced transfer pricing rules, but these rules has shown limited efficacy, however, contribute to the increasing complexity of tax laws and the emergence of additional costs for companies. This paper deals with the concrete examples, the solution to solving the problem of transfer pricing in the European Union by the introduction of common consolidated corporate income tax.

  8. Short- and long-run time-of-use price elasticities in Swiss residential electricity demand

    International Nuclear Information System (INIS)

    Filippini, Massimo

    2011-01-01

    This paper presents an empirical analysis on the residential demand for electricity by time-of-day. This analysis has been performed using aggregate data at the city level for 22 Swiss cities for the period 2000-2006. For this purpose, we estimated two log-log demand equations for peak and off-peak electricity consumption using static and dynamic partial adjustment approaches. These demand functions were estimated using several econometric approaches for panel data, for example LSDV and RE for static models, and LSDV and corrected LSDV estimators for dynamic models. The attempt of this empirical analysis has been to highlight some of the characteristics of the Swiss residential electricity demand. The estimated short-run own price elasticities are lower than 1, whereas in the long-run these values are higher than 1. The estimated short-run and long-run cross-price elasticities are positive. This result shows that peak and off-peak electricity are substitutes. In this context, time differentiated prices should provide an economic incentive to customers so that they can modify consumption patterns by reducing peak demand and shifting electricity consumption from peak to off-peak periods. - Highlights: → Empirical analysis on the residential demand for electricity by time-of-day. → Estimators for dynamic panel data. → Peak and off-peak residential electricity are substitutes.

  9. Price elasticity of Swiss motor fuel demand; Elasticite-prix de la demande d'essence en Suisse

    Energy Technology Data Exchange (ETDEWEB)

    Baranzini, A. [Haute Ecole de Gestion de Geneve (HEG-Geneve), Centre de Recherche Appliquee en Gestion (CRAG), Carouge (Switzerland); Neto, D.; Weber, S. [Universite de Geneve, Laboratoire d' Economie Appliquee (LEA), Geneve (Switzerland)

    2009-07-15

    This report for the Swiss Federal Office of Energy (SFOE) by the University of Geneva takes a look at the price elasticity of motor fuel demand in Switzerland. Macro-economic data on petrol and diesel consumption is used to calculate short and long-term price elasticity. Various factors that have an influence on prices are discussed. Data for the period 1970 - 2008 is used. A method developed by Engle and Granger is used to examine short and long-term developments in this area. A large number of variables are used in mathematical models to explain price developments. The methods used are described and the results are presented in tabular form. Various external effects such the oil-price shocks and price developments in neighbouring countries are examined.

  10. Price elasticity of Swiss motor fuel demand; Elasticite-prix de la demande d'essence en Suisse

    Energy Technology Data Exchange (ETDEWEB)

    Baranzini, A. [Haute Ecole de Gestion de Geneve (HEG-Geneve), Centre de Recherche Appliquee en Gestion (CRAG), Carouge (Switzerland); Neto, D.; Weber, S. [Universite de Geneve, Laboratoire d' Economie Appliquee (LEA), Geneve (Switzerland)

    2009-07-15

    This report for the Swiss Federal Office of Energy (SFOE) by the University of Geneva takes a look at the price elasticity of motor fuel demand in Switzerland. Macro-economic data on petrol and diesel consumption is used to calculate short and long-term price elasticity. Various factors that have an influence on prices are discussed. Data for the period 1970 - 2008 is used. A method developed by Engle and Granger is used to examine short and long-term developments in this area. A large number of variables are used in mathematical models to explain price developments. The methods used are described and the results are presented in tabular form. Various external effects such the oil-price shocks and price developments in neighbouring countries are examined.

  11. Simulated Models Suggest That Price per Calorie Is the Dominant Price Metric That Low-Income Individuals Use for Food Decision Making.

    Science.gov (United States)

    Beheshti, Rahmatollah; Igusa, Takeru; Jones-Smith, Jessica

    2016-11-01

    The price of food has long been considered one of the major factors that affects food choices. However, the price metric (e.g., the price of food per calorie or the price of food per gram) that individuals predominantly use when making food choices is unclear. Understanding which price metric is used is especially important for studying individuals with severe budget constraints because food price then becomes even more important in food choice. We assessed which price metric is used by low-income individuals in deciding what to eat. With the use of data from NHANES and the USDA Food and Nutrient Database for Dietary Studies, we created an agent-based model that simulated an environment representing the US population, wherein individuals were modeled as agents with a specific weight, age, and income. In our model, agents made dietary food choices while meeting their budget limits with the use of 1 of 3 different metrics for decision making: energy cost (price per calorie), unit price (price per gram), and serving price (price per serving). The food consumption patterns generated by our model were compared to 3 independent data sets. The food choice behaviors observed in 2 of the data sets were found to be closest to the simulated dietary patterns generated by the price per calorie metric. The behaviors observed in the third data set were equidistant from the patterns generated by price per calorie and price per serving metrics, whereas results generated by the price per gram metric were further away. Our simulations suggest that dietary food choice based on price per calorie best matches actual consumption patterns and may therefore be the most salient price metric for low-income populations. © 2016 American Society for Nutrition.

  12. Simulated Models Suggest That Price per Calorie Is the Dominant Price Metric That Low-Income Individuals Use for Food Decision Making123

    Science.gov (United States)

    2016-01-01

    Background: The price of food has long been considered one of the major factors that affects food choices. However, the price metric (e.g., the price of food per calorie or the price of food per gram) that individuals predominantly use when making food choices is unclear. Understanding which price metric is used is especially important for studying individuals with severe budget constraints because food price then becomes even more important in food choice. Objective: We assessed which price metric is used by low-income individuals in deciding what to eat. Methods: With the use of data from NHANES and the USDA Food and Nutrient Database for Dietary Studies, we created an agent-based model that simulated an environment representing the US population, wherein individuals were modeled as agents with a specific weight, age, and income. In our model, agents made dietary food choices while meeting their budget limits with the use of 1 of 3 different metrics for decision making: energy cost (price per calorie), unit price (price per gram), and serving price (price per serving). The food consumption patterns generated by our model were compared to 3 independent data sets. Results: The food choice behaviors observed in 2 of the data sets were found to be closest to the simulated dietary patterns generated by the price per calorie metric. The behaviors observed in the third data set were equidistant from the patterns generated by price per calorie and price per serving metrics, whereas results generated by the price per gram metric were further away. Conclusions: Our simulations suggest that dietary food choice based on price per calorie best matches actual consumption patterns and may therefore be the most salient price metric for low-income populations. PMID:27655757

  13. Willingness to pay and price elasticities of demand for energy-efficient appliances: Combining the hedonic approach and demand systems

    Energy Technology Data Exchange (ETDEWEB)

    Galarraga, Ibon, E-mail: ibon.galarraga@bc3research.org; Gonzalez-Eguino, Mikel, E-mail: mikel.gonzalez@bc3research.org; Markandya, Anil, E-mail: anil.markandya@bc3research.org

    2011-12-15

    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 Euro 80 of the average market price. The elasticity results confirm that energy efficient appliances are more price elastic than regular ones. - Highlights: > The article shows a combined approach for estimating willingness to pay for energy efficiency labels and price elasticities. > The results of the hedonic approach is used together with the Quantity Based Demand System (QBDS) model. > The elasticity results are compared with those simulated using the Linear Almost Ideal Demand System (LA/AIDS). > The methodology is applied to the dishwasher market in Spain.

  14. Financial Position and House Price Determination : An Empirical Study of Income and Wealth Effects

    NARCIS (Netherlands)

    Steegmans, J.W.A.M.|info:eu-repo/dai/nl/377458708; Hassink, W.H.J.|info:eu-repo/dai/nl/090437411

    This paper examines the effect of the relative financial position of buyers and sellers on house prices, distinguishing between income and wealth effects. Using administrative data from the Netherlands (2006–2010) that combine transaction data, house characteristics, and household characteristics of

  15. Transport fuel demand responses to fuel price and income projections : Comparison of integrated assessment models

    NARCIS (Netherlands)

    Edelenbosch, O. Y.; van Vuuren, Detlef; Bertram, C.; Carrara, S.; Emmerling, J.; Daly, H.; Kitous, A.; McCollum, D. L.; Saadi Failali, N.

    Income and fuel price pathways are key determinants in projections of the energy system in integrated assessment models. In recent years, more details have been added to the transport sector representation in these models. To better understand the model dynamics, this manuscript analyses transport

  16. Individual Preference Rankings Compatible with Prices, Income Distributions and Total Resources

    DEFF Research Database (Denmark)

    Balasko, Yves; Tvede, Mich

    We consider the problem of determining the individual preference rankings that are necessarily implied by a dataset consisting of prices, income distributions and total resources. We show the equivalence between the compatibility with individual preference rankings and the existence of a solution...

  17. Estimating petroleum products demand elasticities in Nigeria. A multivariate cointegration approach

    International Nuclear Information System (INIS)

    Iwayemi, Akin; Adenikinju, Adeola; Babatunde, M. Adetunji

    2010-01-01

    This paper formulates and estimates petroleum products demand functions in Nigeria at both aggregative and product level for the period 1977 to 2006 using multivariate cointegration approach. The estimated short and long-run price and income elasticities confirm conventional wisdom that energy consumption responds positively to changes in GDP and negatively to changes in energy price. However, the price and income elasticities of demand varied according to product type. Kerosene and gasoline have relatively high short-run income and price elasticities compared to diesel. Overall, the results show petroleum products to be price and income inelastic. (author)

  18. Estimating petroleum products demand elasticities in Nigeria. A multivariate cointegration approach

    Energy Technology Data Exchange (ETDEWEB)

    Iwayemi, Akin; Adenikinju, Adeola; Babatunde, M. Adetunji [Department of Economics, University of Ibadan, Ibadan (Nigeria)

    2010-01-15

    This paper formulates and estimates petroleum products demand functions in Nigeria at both aggregative and product level for the period 1977 to 2006 using multivariate cointegration approach. The estimated short and long-run price and income elasticities confirm conventional wisdom that energy consumption responds positively to changes in GDP and negatively to changes in energy price. However, the price and income elasticities of demand varied according to product type. Kerosene and gasoline have relatively high short-run income and price elasticities compared to diesel. Overall, the results show petroleum products to be price and income inelastic. (author)

  19. Price elasticity of the demand for soft drinks, other sugar-sweetened beverages and energy dense food in Chile.

    Science.gov (United States)

    Guerrero-López, Carlos M; Unar-Munguía, Mishel; Colchero, M Arantxa

    2017-02-10

    Chile is the second world's largest per capita consumer of caloric beverages. Caloric beverages are associated with overweight, obesity and other chronic diseases. The objective of this study is to estimate the price elasticity of demand for soft drinks, other sugar-sweetened beverages and high-energy dense foods in urban areas in Chile in order to evaluate the potential response of households' consumption to changes in prices. We used microdata from the VII Family Budget Survey 2012-2013, which collects information on expenditures made by Chilean urban households on items such as beverages and foods. We estimated a Linear Approximation of an Almost Ideal Demand System Model to derive own and cross price elasticities of milk, coffee, tea and other infusions, plain water, soft drinks, other flavored beverages, sweet snacks, sugar and honey, and desserts. We considered the censored nature of the data and included the Inverse Mills Ratio in each equation of the demand system. We estimated a Quadratic Almost Ideal Demand System and a two-part model as sensitivity analysis. We found an own price-elasticity of -1.37 for soft drinks. This implies that a price increase of 10% is associated with a reduction in consumption of 13.7%. We found that the rest of food and beverages included in the demand system behave as substitutes for soft drinks. For instance, plain water showed a cross-price elasticity of 0.63: a 10% increase in price of soft drinks could lead to an increase of 6.3% of plain water. Own and cross price elasticities were similar between models. The demand of soft drinks is price sensitive among Chilean households. An incentive system such as subsidies to non-sweetened beverages and tax to soft drinks could lead to increases in the substitutions for other healthier beverages.

  20. Price elasticity of the demand for soft drinks, other sugar-sweetened beverages and energy dense food in Chile

    Directory of Open Access Journals (Sweden)

    Carlos M. Guerrero-López

    2017-02-01

    Full Text Available Abstract Background Chile is the second world’s largest per capita consumer of caloric beverages. Caloric beverages are associated with overweight, obesity and other chronic diseases. The objective of this study is to estimate the price elasticity of demand for soft drinks, other sugar-sweetened beverages and high-energy dense foods in urban areas in Chile in order to evaluate the potential response of households’ consumption to changes in prices. Methods We used microdata from the VII Family Budget Survey 2012–2013, which collects information on expenditures made by Chilean urban households on items such as beverages and foods. We estimated a Linear Approximation of an Almost Ideal Demand System Model to derive own and cross price elasticities of milk, coffee, tea and other infusions, plain water, soft drinks, other flavored beverages, sweet snacks, sugar and honey, and desserts. We considered the censored nature of the data and included the Inverse Mills Ratio in each equation of the demand system. We estimated a Quadratic Almost Ideal Demand System and a two-part model as sensitivity analysis. Results We found an own price-elasticity of −1.37 for soft drinks. This implies that a price increase of 10% is associated with a reduction in consumption of 13.7%. We found that the rest of food and beverages included in the demand system behave as substitutes for soft drinks. For instance, plain water showed a cross-price elasticity of 0.63: a 10% increase in price of soft drinks could lead to an increase of 6.3% of plain water. Own and cross price elasticities were similar between models. Conclusions The demand of soft drinks is price sensitive among Chilean households. An incentive system such as subsidies to non-sweetened beverages and tax to soft drinks could lead to increases in the substitutions for other healthier beverages.

  1. Elasticity of Vehicle Miles of Travel to Changes in the Price of Gasoline and the Cost of Driving in Texas

    Energy Technology Data Exchange (ETDEWEB)

    Wenzel, Tom P.; Fujita, K. Sydny

    2018-03-28

    This report examines the sensitivity of annual vehicle miles of travel (VMT) of light-duty vehicles to the price of gasoline, commonly referred to as the elasticity of demand for VMT to the price of gasoline; the fuel-economy-related rebound effect is generally assumed to be of the same magnitude as the VMT elasticity of gas price or driving cost. We use detailed odometer readings from over 30 million vehicles in four urban areas of Texas, over a six-year period. We account for economic conditions over this period, as well as vehicle age. Following the literature we include fixed effects by vehicle make and individual vehicle, as well as the effect of adding an instrument to predict monthly gasoline price independent of any influences of demand for gasoline on its price.

  2. Multi-Objective Demand Response Model Considering the Probabilistic Characteristic of Price Elastic Load

    Directory of Open Access Journals (Sweden)

    Shengchun Yang

    2016-01-01

    Full Text Available Demand response (DR programs provide an effective approach for dealing with the challenge of wind power output fluctuations. Given that uncertain DR, such as price elastic load (PEL, plays an important role, the uncertainty of demand response behavior must be studied. In this paper, a multi-objective stochastic optimization problem of PEL is proposed on the basis of the analysis of the relationship between price elasticity and probabilistic characteristic, which is about stochastic demand models for consumer loads. The analysis aims to improve the capability of accommodating wind output uncertainty. In our approach, the relationship between the amount of demand response and interaction efficiency is developed by actively participating in power grid interaction. The probabilistic representation and uncertainty range of the PEL demand response amount are formulated differently compared with those of previous research. Based on the aforementioned findings, a stochastic optimization model with the combined uncertainties from the wind power output and the demand response scenario is proposed. The proposed model analyzes the demand response behavior of PEL by maximizing the electricity consumption satisfaction and interaction benefit satisfaction of PEL. Finally, a case simulation on the provincial power grid with a 151-bus system verifies the effectiveness and feasibility of the proposed mechanism and models.

  3. THE INFLUENCE OF PRICES AND INCOME ON CONSUMER BEHAVIOUR OF THE POPULATION. THE CASE OF ROMANIA

    Directory of Open Access Journals (Sweden)

    Anghelina Andrei

    2012-12-01

    Full Text Available The recession influenced the consummers in their biggest concern – their income. In the same time the recession changed some important trends in consume. In this paperwork the authors intend to determine how strong the influence of prices and incomes of the population is on the consumer behavior, especially in Romania. Also the author want to present the case study of Romania concerning the recession of economy and some new aspects of consumer behavior. There is a strong conexion between the income and consume and the time of recession show it in the best way. In this way the author did some research on the market and by some analyses in a statistical editor we conclude that there is a strong determination in the consumer behavior by the income of the population especially in Romania, a country with a developing economy.

  4. Demand assessment and price-elasticity estimation of quality-improved primary health care in Palestine: a contribution from the contingent valuation method.

    Science.gov (United States)

    Mataria, Awad; Luchini, Stéphane; Daoud, Yousef; Moatti, Jean-Paul

    2007-10-01

    This paper proposes a new methodology to assess demand and price-elasticity for health care, based on patients' stated willingness to pay (WTP) values for certain aspects of health care quality improvements. A conceptual analysis of how respondents consider contingent valuation (CV) questions allowed us to specify a probability density function of stated WTP values, and consequently, to model a demand function for quality-improved health care, using a parametric survival approach. The model was empirically estimated using a CV study intended to assess patients' values for improving the quality of primary health care (PHC) services in Palestine. A random sample of 499 individuals was interviewed following medical consultation in four PHC centers. Quality was assessed using a multi-attribute approach; and respondents valued seven specific quality improvements using a decomposed valuation scenario and a payment card elicitation technique. Our results suggest an inelastic demand at low user fees levels, and when the price-increase is accompanied with substantial quality-improvements. Nevertheless, demand becomes more and more elastic if user fees continue to rise. On the other hand, patients' reactions to price-increase turn out to depend on their level of income. Our results can be used to design successful health care financing strategies that include a consideration of patients' preferences and financial capacities. John Wiley & Sons, Ltd.

  5. An analysis of price competitiveness of CNG (compressed natural gas) versus gasoline: estimation of the elasticities of demand by CNG in a recent period in Brazil; Uma analise da competitividade de preco do GNV (Gas Natural Veicular) frente a gasolina: estimacao das elasticidades da demanda por GNV no Brasil no periodo recente

    Energy Technology Data Exchange (ETDEWEB)

    Iootty, Mariana; Pinto Junior, Helder; Roppa, Bruna; Biasi, Guilherme de [Universidade Federal do Rio de Janeiro (UFRJ), RJ (Brazil). Inst. de Economia

    2004-07-01

    One of the main determinants to the expansion of natural gas on the Brazilian domestic market is its price. Hence, it is important to analyze the price competitiveness of natural gas vis-a-vis its competitors. The current paper focuses on the market of natural gas in vehicles (the compressed natural gas - CNG), and uses co-integration techniques to estimate the price-elasticity of CNG, the cross-elasticity of CNG and gasoline, and the income-elasticity. The results suggest that price is a relevant factor in the long-run, while in the short-run income is the most significant determinant of the demand variation. In addition, the paper also shows an imperfect substitutability between CNG and gasoline. (author)

  6. The elasticity of demand for gasoline in China

    International Nuclear Information System (INIS)

    Lin, C.-Y. Cynthia; Zeng, Jieyin

    2013-01-01

    This paper estimates the price and income elasticities of demand for gasoline in China. Our estimates of the intermediate-run price elasticity of gasoline demand range between −0.497 and −0.196, and our estimates of the intermediate-run income elasticity of gasoline demand range between 1.01 and 1.05. We also extend previous studies to estimate the vehicle miles traveled (VMT) elasticity and obtain a range from −0.882 to −0.579. - highlights: • The price elasticity of demand for gasoline in China is between −0.497 and −0.196. • The income elasticity of demand for gasoline in China is between 1.01 and 1.05. • The price elasticity of demand for VMT in China is between −0.882 and −0.579

  7. Price elasticities, policy measures and actual developments in household energy consumption - A bottom up analysis for the Netherlands

    International Nuclear Information System (INIS)

    Boonekamp, Piet G.M.

    2007-01-01

    In the Netherlands it seems likely that the large number of new policy measures in the past decade has influenced the response of households to changing prices. To investigate this issue the energy trends in the period 1990-2000 have been simulated with a bottom-up model, applied earlier for scenario studies, and extensive data from surveys. For a number of alternative price cases the elasticity values found are explained using the bottom-up changes in energy trends. One finding is that the specific set of saving options defines for a great part the price response. The price effect has been analysed too in combination with the policy measures standards, subsidies and energy taxes. The simulation results indicate that the elasticity value could be 30-40% higher without these measures. (author)

  8. Estimating the own-price elasticity of demand for irrigation water in the Musi catchment of India

    Science.gov (United States)

    Davidson, Brian; Hellegers, Petra

    2011-10-01

    SummaryAs irrigation water is an input into a production process, its demand must be 'derived'. According to theory, a derived demand schedule should be downward sloping and dependent on the outputs produced from it, the prices of other inputs and the price of the water itself. Problems arise when an attempt is made to estimate the demand for irrigation water and the resulting own-price elasticity of demand, as the uses to which water is put are spatially, temporarily and geographically diverse. Because water is not generally freely traded, what normally passes for an estimate of the own-price elasticity of demand for irrigation water is usually a well argued assumption or an estimate that is derived from a simulation model of a hypothesized producer. Such approaches tend to provide an inadequate explanation of what is an extremely complex and important relationship. An adequate explanation of the relationship between the price and the quantity demanded of water should be one that not only accords with the theoretical expectations, but also accounts for the diversity of products produced from water (which includes the management practices of farmers), the seasons in which it is used and over the region within which it is used. The objective in this article is to present a method of estimating the demand curve for irrigation water. The method uses actual field data which is collated using the Residual Method to determine the value of the marginal product of water deployed over a wide range of crops, seasons and regions. These values of the marginal products, all which must lie of the input demand schedule for water, are then ordered from the highest value to the lowest. Then, the amount of irrigation water used for each product, in each season and in each region is cumulatively summed over the range of uses according to the order of the values of the marginal products. This data, once ordered, is then used to econometrically estimate the demand schedule from which

  9. Cheaper by the Dozen: Using Sibling Discounts at Catholic Schools to Estimate the Price Elasticity of Private School Attendance. NBER Working Paper No. 15461

    Science.gov (United States)

    Dynarski, Susan; Gruber, Jonathan; Li, Danielle

    2009-01-01

    The effect of vouchers on sorting between private and public schools depends upon the price elasticity of demand for private schooling. Estimating this elasticity is empirically challenging because prices and quantities are jointly determined in the market for private schooling. We exploit a unique and previously undocumented source of variation…

  10. On the Distance Dependence of the Price Elasticity of Telecommunications Demand; Meta-analysis, and Alternative Theoretical Backgrounds

    NARCIS (Netherlands)

    Ouwersloot, Hans; Rietveld, Piet

    1997-01-01

    The positive correlation between the absolute price elasticity of telecommunications demand and the distance of the calling relation is well known. In this paper we first present a meta-analysis of existing studies to buttress the distance dependence empirically. The analysis confirms the existence

  11. Switching gains and health plan price elasticities: 20 years of managed competition reforms in The Netherlands.

    Science.gov (United States)

    Douven, Rudy; Katona, Katalin; T Schut, Frederik; Shestalova, Victoria

    2017-11-01

    In this paper we estimate health plan price elasticities and financial switching gains for consumers over a 20-year period in which managed competition was introduced in the Dutch health insurance market. The period is characterized by a major health insurance reform in 2006 to provide health insurers with more incentives and tools to compete, and to provide consumers with a more differentiated choice of products. Prior to the reform, in the period 1995-2005, we find a low number of switchers, between 2 and 4% a year, modest average total switching gains of 2 million euros per year and short-term health plan price elasticities ranging from -0.1 to -0.4. The major reform in 2006 resulted in an all-time high switching rate of 18%, total switching gains of 130 million euros, and a high short-term price elasticity of -5.7. During 2007-2015 switching rates returned to lower levels, between 4 and 8% per year, with total switching gains in the order of 40 million euros per year on average. Total switching gains could have been 10 times higher if all consumers had switched to one of the cheapest plans. We find short-term price elasticities ranging between -0.9 and -2.2. Our estimations suggest substantial consumer inertia throughout the entire period, as we find degrees of choice persistence ranging from about 0.8 to 0.9.

  12. Exploring the relationship between cigarette prices and smoking among adults: a cross-country study of low- and middle-income nations.

    Science.gov (United States)

    Kostova, Deliana; Tesche, Jean; Perucic, Anne-Marie; Yurekli, Ayda; Asma, Samira

    2014-01-01

    Evidence on the relationship between cigarette prices and adult smoking in low- and middle-income countries (LMICs) is relatively limited. This study offers new descriptive evidence on this relationship using data from a set of 13 LMICs. We use Global Adult Tobacco Survey (GATS) cross-country data from approximately 200,000 participants aged 15 and older. Estimates on the relationship between prices and adult smoking were obtained from logit models of smoking participation and ordinary least squares models of conditional cigarette demand. Higher prices were associated with lower demand across countries, in terms of both smoking prevalence and daily number of cigarettes smoked among smokers. Our estimates suggest that the total price elasticity of cigarette demand in LMICs is approximately -0.53. We find that higher socioeconomic status (SES), represented through wealth and education effects is associated with lower chance of smoking overall, but among existing smokers, it may be associated with a larger number of cigarettes smoked. After controlling for a set of individual demographic and country characteristics, cigarette prices retain a significant role in shaping cigarette demand across LMICs. Because higher SES is associated with a reduced chance of smoking overall but also with increased daily consumption among current smokers, optimal tobacco tax policies in LMICs may face an added need to accommodate to shifting SES structures within the populations of these countries.

  13. Prices of second-line antiretroviral treatment for middle-income countries inside versus outside sub-Saharan Africa.

    Science.gov (United States)

    Simmons, Bryony; Hill, Andrew; Ford, Nathan; Ruxrungtham, Kiat; Ananworanich, Jintanat

    2014-01-01

    Antiretrovirals are available at low prices in sub-Saharan Africa, but these prices may not be consistently available for middle-income countries in other regions with large HIV epidemics. Over 30% of HIV infected people live in countries outside sub-Saharan Africa. Several key antiretrovirals are still on patent, with generic production restricted. We assessed price variations for key antiretroviral drugs inside versus outside sub-Saharan Africa. HIV drug prices used in national programmes (2010-2014) were extracted from the WHO Global Price Reporting Mechanism database for all reporting middle-income countries as classified by the World Bank. Treatment costs (branded and generic) were compared for countries inside sub-Saharan Africa versus those outside. Five key second-line antiretrovirals were analysed: abacavir, atazanavir, darunavir, lopinavir/ritonavir, raltegravir. Prices of branded antiretrovirals were significantly higher outside sub-Saharan Africa (psub-Saharan Africa versus $4689 (IQR $4075-5717) in non-African middle-income countries, an increase of 541%. However, when supplied by generic companies, most antiretrovirals were similarly priced between countries in sub-Saharan Africa and other regions. Pharmaceutical companies are selling antiretrovirals to non-African middle-income countries at prices 74-541% higher than African countries with similar gross national incomes. However, generic companies are selling most of these drugs at similar prices across regions. Mechanisms to ensure fair pricing for patented antiretrovirals across both African and non-African middle-income countries need to be improved, to ensure sustainable treatment access.

  14. Quality-quantity decomposition of income elasticity of U.S. hospital care expenditure using state-level panel data.

    Science.gov (United States)

    Chen, Weiwei; Okunade, Albert; Lubiani, Gregory G

    2014-11-01

    Economic theory suggests that income growth could lead to changes in consumption quantity and quality as the spending on a commodity changes. Similarly, the volume and quality of healthcare consumption could rise with incomes because of demographic changes, usage of innovative medical technologies, and other factors. Hospital healthcare spending is the largest component of aggregate US healthcare expenditures. The novel contribution of our paper is estimating and decomposing the income elasticity of hospital care expenditures (HOCEXP) into its quantity and quality components. By using a 1999-2008 panel dataset of the 50 US states, results from the seemingly unrelated regressions model estimation reveal the income elasticity of HOCEXP to be 0.427 (std. error=0.044), with about 0.391 (calculated std. error=0.044) arising from care quality improvements and 0.035 (std. error=0.050) emanating from the rise in usage volume. Our novel research findings suggest the following: (i) the quantity part of hospital expenditure is inelastic to income change; (ii) almost the entire income-induced rise in hospital expenditure comes from care quality changes; and (iii) the 0.427 income elasticity of HOCEXP, the largest component of total US healthcare expenditure, makes hospital care a normal commodity and a much stronger technical necessity than aggregate healthcare. Policy implications are discussed. Copyright © 2013 John Wiley & Sons, Ltd.

  15. The pricing behavior comparison of Canada and Australia exporter in wheat international market using Pricing to Market (PTM) and Residual Demand Elasticity (RDE)

    Science.gov (United States)

    Wibowo, R. P.; Sumono; Iddrisu, Y.; Darus, M.; Sihombing, L. P.; Jufri

    2018-02-01

    This paper try to identify and examined the degree of market power on wheat international market by 2 major exporting countries comprising Canada and Australia by using the Pricing to Market (PTM) method and Residual Demand Elasticity (RDE) method. The PTM method found that Canada impose noncompetitive strategy by applying price discrimination and apply market power to their importing. Different results come from Australian exporter as they are not using their market power to the importing. Conflicting result arise from estimation using RDE and PTM method suggest that the need to extend the theoretical model of both model by expand its economic and econometric model to have consistent expected result theoretically and empirically.

  16. Income distribution impacts of changes in Western Area Power Administration electricity prices. Final report

    Energy Technology Data Exchange (ETDEWEB)

    Rose, A.; Frias, O. [Pennsylvania State Univ., University Park, PA (United States). Dept. of Mineral Economics

    1993-06-01

    The purpose of this report is to present the methodology and results of an analysis of income distribution impacts associated with changes in the Western Area Power Administration (WAPA) marketing program. The focus will be on the distribution of personal income across eleven brackets in each of nine sub-regions of the WAPA market area. Moreover, these results will be translated into an assessment of the number of people who stand to gain or lose as a result of the policies and the size of these income changes. Most economic impact analyses are performed at an aggregate level. The results are typically presented in terms of net benefits, or a listing of changes in employment, output, income, or prices. What is neglected is the distribution of impacts across the affected population. These distributional impacts are important for several reasons. First, there is the normative judgmental issue of distributional justice, or equity. This addresses concerns about income disparities in general, or whether the poor, or any other group, are shouldering a disproportionate share of any burden or are failing to share significantly in any gain.

  17. GLOBAL FINANCIAL CRISIS AND AGRARIAN HOUSEHOLDS' INCOME, REMITTANCE AND PRICES IN RURAL NIGERIA AMID POLICY RESPONSES

    Directory of Open Access Journals (Sweden)

    Mmaduabuchukwu Mkpado

    2012-06-01

    Full Text Available The recent global financial crisis affected almost all aspect of human life. This paper explored effects of the global financial crisis on farmers' income, remittance and prices of food staples and highlighted certain government policy responses. The study was conducted in Nigeria. Secondary data were used. Data were analyzed using descriptive statistics, equivalent variation and Shannon index analysis. Results showed the global financial crisis affected the agrarian households/sector in Nigeria. The increase in prices meant more nominal income to farmers but grossly reduced their welfare due to decrease in real income as result of high inflation trend. Recommendations include that government should continue to sustain agrarian programs aimed at helping poor farmers to increase their capacity in production to meet the growing demand and changes. In both cases, the disturbed age structure has a reverse effect on the movement of the population (the size of reproductive contingent, but also to all other structures of the population (the size of contingent employment, population, compulsory school contingent, contingent dependent population ratio. Rating natural conditions aimed at separation of homogenous territorial units with some degree of benefits and limitations types of economic development.

  18. A comprehensive examination of own- and cross-price elasticities of tobacco and nicotine replacement products in the U.S.

    Science.gov (United States)

    Huang, Jidong; Gwarnicki, Cezary; Xu, Xin; Caraballo, Ralph S; Wada, Roy; Chaloupka, Frank J

    2018-04-21

    While much is known about the demand for cigarettes, research on the demand for non-cigarette tobacco products and the cross-price impacts among those products is limited. This study aims to comprehensively examine the own- and cross-price elasticities of demand for tobacco and nicotine replacement products (NRPs) in the U.S. We analyzed market-level quarterly data on sales and prices of 15 different types of tobacco products and NRPs from 2007 to 2014, compiled from retail store scanner data. Fixed effects models with controls were used to estimate their own-price elasticities and cross-price elasticities between cigarettes and the other 14 products. Our results show that, except for cigars, the demand for combustible tobacco products was generally elastic, with the estimated own-price elasticity >1 (10% increase in prices reduces sales by >10%). The own-price elasticities for smokeless tobacco products were smaller than those for combustible tobacco, although not always significant. The demand for electronic cigarettes and NRPs was found to be elastic. The cross-price elasticities with respect to cigarettes were positive for cigarillos, little cigars, loose tobacco, pipe tobacco, electronic cigarettes and NRPs, but only results for little cigars, loose tobacco, pipe tobacco, and dissolvable lozenges were consistently significant. Our findings suggest demand for tobacco products and NRPs was responsive to changes in their own prices. Substitutions or positive cross-price impacts between cigarettes and certain other products exist. It is important that tobacco control policies take into account both own- and cross-price impacts among tobacco products and NRTs. Copyright © 2018 Elsevier Inc. All rights reserved.

  19. Financial barriers and pricing strategies related to participation in sports activities: the perceptions of people of low income.

    Science.gov (United States)

    Steenhuis, Ingrid H M; Nooy, Steffie B C; Moes, Machiel J G; Schuit, Albertine J

    2009-11-01

    Physical activity levels in most affluent countries are low and many people do not meet the current recommendations. Particularly for people with a low income, economic strategies seem promising to stimulate taking part in sports activities. This study investigated the importance of economic restraints for taking part in sports activities as well as perceptions of low-income people toward different pricing interventions. A qualitative study was conducted, using semistructured, individual interviews with 27 low-income men and women. The framework approach was used to analyze the transcripts of the interviews. The respondents considered finances to be an important barrier for participating in sports activities, together with some individual barriers. Promising pricing strategies are a discount on the subscription to the fitness or sports club, a 1 month free trial, and free entrance to the swimming pool once a week. Pricing strategies may be a promising intervention to increase physical activity levels of low-income people. However, this study indicates that this should be coupled with an intervention directed at individual barriers. Some pricing strategies will be used and appreciated more by low-income people than other pricing strategies. In addition, pricing strategies should be tailored to individual needs and preferences.

  20. PRICE TRANSMISSION AND HOUSEHOLDS DEMAND ELASTICITY FOR FROZEN FISH UNDER FUEL SUBSIDY REFORM IN DELTA STATE, NIGERIA

    Directory of Open Access Journals (Sweden)

    Achoja Felix Odemero

    2013-07-01

    Full Text Available Fuel subsidy removal is assumed to translate to general increase in the cost of operating business such as fish marketing.The response of price of fish and corresponding demand elasticity are welfare issues worthy of investigation in Nigeria. The present study evaluates price transmission in fish marketing system by analysing the response of fish market indices to fuel subsidy reform in Nigeria. Primary data collected with structured questionnaire from purposively selected 78 frozen fish marketers, were analysed with descriptive statistics and regression model. A test of hypothesis shows a significant price transmission of about 100% (P < 0.05. Marketing cost increased by 31.8% and profitability dropped by 24.20%, confirming negative effect of new price regime. The result further revealed a 0.05% drop in quantity of frozen fish demanded by households. It was recommended that economic measures should be introduced by the government to cushion the effect of fuel policy removal.

  1. The Impact of Income and Taxation in a Price-Tiered Cigarette Market - findings from the ITC Bangladesh Surveys.

    Science.gov (United States)

    Huq, Iftekharul; Nargis, Nigar; Lkhagvasuren, Damba; Hussain, Akm Ghulam; Fong, Geoffrey T

    2018-04-25

    Taxing tobacco is among the most effective measures of tobacco control. However, in a tiered market structure where multiple tiers of taxes coexist, the anticipated impact of tobacco taxes on consumption is complex. This paper investigates changing smoking behaviour in lieu of changing prices and changing income. The objective of the paper is to evaluate the effectiveness of change in prices (through taxes) and change in income in a price-tiered cigarette market. A panel dataset from the International Tobacco Control Bangladesh surveys is used for analysis. For preliminary analysis transition matrices are developed. Next, probit and multinomial logit regression models are used to identify the effects of changes in prices and changes in income along with other control variables. Transition matrices show significant movement of smokers across price tiers from one wave to another. Regression results show that higher income raises the probability to up-trade and decreases the probability to down-trade. Results also show that higher prices raises the probability to up-trade and reduces the probability to down-trade. Although not significant, there exists a negative relationship between the probability to down-trade and the probability to intend to quit. It is evident from the results that a price-tiered market provides smokers more opportunities to accommodate their smoking behaviour when faced with price and income change. Therefore, tiered structure of the tax system should be replaced with uniform taxes. Moreover, overall cigarette taxes need to be raised to an extent so that it off-sets any positive effects of income growth. © Article author(s) (or their employer(s) unless otherwise stated in the text of the article) 2018. All rights reserved. No commercial use is permitted unless otherwise expressly granted.

  2. Estimating Demand and Cross-Price Elasticity for Very Low Nicotine Content (VLNC) Cigarettes Using a Simulated Demand Task.

    Science.gov (United States)

    Tucker, Megan R; Laugesen, Murray; Grace, Randolph C

    2017-03-03

    Very Low Nicotine Content (VLNC) cigarettes might be useful as part of a tobacco control strategy, but relatively little is known about their acceptability as substitutes for regular cigarettes. We compared subjective effects and demand for regular cigarettes and Very Low Nicotine Content (VLNC) cigarettes, and estimated cross-price elasticity for VLNC cigarettes, using simulated demand tasks. 40 New Zealand smokers sampled a VLNC cigarette and completed Cigarette Purchase Tasks to indicate their demand for regular cigarettes and VLNC cigarettes at a range of prices, and a cross-price task indicating how many regular cigarettes and VLNC cigarettes they would purchase at 0.5x, 1x, and 2x the current market price for regular cigarettes, assuming the price of VLNC cigarettes remained constant. They also rated the subjective effects of the VLNC cigarette and their usual-brand regular cigarettes. Cross-price elasticity for VLNC cigarettes was estimated as 0.24 and was significantly positive, indicating that VLNC cigarettes are partially substitutable for regular cigarettes. VLNC cigarettes were rated as less satisfying and psychologically rewarding than regular cigarettes, but this was unrelated to demand or substitutability. VLNC cigarettes are potentially substitutable for regular cigarettes. Their availability may reduce tobacco consumption, nicotine intake and addiction; making it easier for smokers to quit. VLNC cigarettes share the behavioural and sensory components of smoking whilst delivering negligible levels of nicotine. Although smokers rated VLNCs as less satisfying than regular cigarettes, smokers said they would increase their consumption of VLNCs as the price of regular cigarettes increased, if VLNCs were available at a lower price. This suggests that VLNCs are partially substitutable for regular cigarettes. VLNCs can be part of an effective tobacco control strategy, by reducing nicotine dependence and improving health and financial outcomes for smokers

  3. Study protocol: combining experimental methods, econometrics and simulation modelling to determine price elasticities for studying food taxes and subsidies (The Price ExaM Study).

    Science.gov (United States)

    Waterlander, Wilma E; Blakely, Tony; Nghiem, Nhung; Cleghorn, Christine L; Eyles, Helen; Genc, Murat; Wilson, Nick; Jiang, Yannan; Swinburn, Boyd; Jacobi, Liana; Michie, Jo; Ni Mhurchu, Cliona

    2016-07-19

    There is a need for accurate and precise food price elasticities (PE, change in consumer demand in response to change in price) to better inform policy on health-related food taxes and subsidies. The Price Experiment and Modelling (Price ExaM) study aims to: I) derive accurate and precise food PE values; II) quantify the impact of price changes on quantity and quality of discrete food group purchases and; III) model the potential health and disease impacts of a range of food taxes and subsidies. To achieve this, we will use a novel method that includes a randomised Virtual Supermarket experiment and econometric methods. Findings will be applied in simulation models to estimate population health impact (quality-adjusted life-years [QALYs]) using a multi-state life-table model. The study will consist of four sequential steps: 1. We generate 5000 price sets with random price variation for all 1412 Virtual Supermarket food and beverage products. Then we add systematic price variation for foods to simulate five taxes and subsidies: a fruit and vegetable subsidy and taxes on sugar, saturated fat, salt, and sugar-sweetened beverages. 2. Using an experimental design, 1000 adult New Zealand shoppers complete five household grocery shops in the Virtual Supermarket where they are randomly assigned to one of the 5000 price sets each time. 3. Output data (i.e., multiple observations of price configurations and purchased amounts) are used as inputs to econometric models (using Bayesian methods) to estimate accurate PE values. 4. A disease simulation model will be run with the new PE values as inputs to estimate QALYs gained and health costs saved for the five policy interventions. The Price ExaM study has the potential to enhance public health and economic disciplines by introducing internationally novel scientific methods to estimate accurate and precise food PE values. These values will be used to model the potential health and disease impacts of various food pricing policy

  4. Study protocol: combining experimental methods, econometrics and simulation modelling to determine price elasticities for studying food taxes and subsidies (The Price ExaM Study

    Directory of Open Access Journals (Sweden)

    Wilma E. Waterlander

    2016-07-01

    Full Text Available Abstract Background There is a need for accurate and precise food price elasticities (PE, change in consumer demand in response to change in price to better inform policy on health-related food taxes and subsidies. Methods/Design The Price Experiment and Modelling (Price ExaM study aims to: I derive accurate and precise food PE values; II quantify the impact of price changes on quantity and quality of discrete food group purchases and; III model the potential health and disease impacts of a range of food taxes and subsidies. To achieve this, we will use a novel method that includes a randomised Virtual Supermarket experiment and econometric methods. Findings will be applied in simulation models to estimate population health impact (quality-adjusted life-years [QALYs] using a multi-state life-table model. The study will consist of four sequential steps: 1. We generate 5000 price sets with random price variation for all 1412 Virtual Supermarket food and beverage products. Then we add systematic price variation for foods to simulate five taxes and subsidies: a fruit and vegetable subsidy and taxes on sugar, saturated fat, salt, and sugar-sweetened beverages. 2. Using an experimental design, 1000 adult New Zealand shoppers complete five household grocery shops in the Virtual Supermarket where they are randomly assigned to one of the 5000 price sets each time. 3. Output data (i.e., multiple observations of price configurations and purchased amounts are used as inputs to econometric models (using Bayesian methods to estimate accurate PE values. 4. A disease simulation model will be run with the new PE values as inputs to estimate QALYs gained and health costs saved for the five policy interventions. Discussion The Price ExaM study has the potential to enhance public health and economic disciplines by introducing internationally novel scientific methods to estimate accurate and precise food PE values. These values will be used to model the potential

  5. Becker's rational addiction theory: An empirical test with price elasticities for distilled spirits in Denmark 1911-31.

    Science.gov (United States)

    Skog, Ole-Jørgen; Melberg, Hans Olav

    2006-10-01

    To test an implication of Becker's rational addiction theory, namely that price changes will lead both to simultaneous consumption changes as well as lagged changes (and potentially also immediate changes if future changes in prices are anticipated). Time-series analysis, first of aggregate sales of distilled spirits and prices, controlled for gross national product (GNP), and secondly of deaths from delirium tremens. Denmark 1911-31. Price changes were very large in the period 1916-18 due to shortages during World War I, and the Danish case can be conceived as a natural experiment. No evidence for lagged price effects in the expected direction was found. On the contrary, the evidence pointed in the opposite direction. The immediate reduction in sales following rising prices are, to some degree, counteracted by an adjustment in the opposite direction the following year. The delirium tremens data confirm this pattern. Becker's theory is not confirmed. Several possible explanations are discussed. If the pattern observed in these data is representative of a more general mechanism, current price elasticity estimates may be too high, by ignoring lagged compensatory effects.

  6. Testing viability of cross subsidy using time-variant price elasticities of industrial demand for electricity: Indian experience

    International Nuclear Information System (INIS)

    Chattopadhyay, Pradip

    2007-01-01

    Indian electric tariffs are characterized by very high rates for industrial and commercial classes to permit subsidized electric consumption by residential and agricultural customers. We investigate the viability of this policy using monthly data for 1997-2003 on electric consumption by a few large industrial customers under the aegis of a small distribution company in the state of Uttar Pradesh. For a given price/cost ratio, it can be shown that if the cross-subsidizing class' electricity demand is sufficiently elastic, increasing the class' rates fail to recover incremental cross-subsidy necessary to support additional revenues for subsidized classes. This suboptimality is tested by individually estimating time-variant price-elasticities of demand for these industrial customers using Box-Cox and linear regressions. We find that at least for some of these customers, cross-subsidy was suboptimal prior to as late as October 2001, when rates were changed following reforms

  7. Testing viability of cross subsidy using time-variant price elasticities of industrial demand for electricity: Indian experience

    Energy Technology Data Exchange (ETDEWEB)

    Chattopadhyay, Pradip [New Hampshire Public Utilities Commission, 21 South Fruit Street, Suite 10, Concord NH 03301 (United States)]. E-mail: pradip.chattopadhyay@puc.nh.gov

    2007-01-15

    Indian electric tariffs are characterized by very high rates for industrial and commercial classes to permit subsidized electric consumption by residential and agricultural customers. We investigate the viability of this policy using monthly data for 1997-2003 on electric consumption by a few large industrial customers under the aegis of a small distribution company in the state of Uttar Pradesh. For a given price/cost ratio, it can be shown that if the cross-subsidizing class' electricity demand is sufficiently elastic, increasing the class' rates fail to recover incremental cross-subsidy necessary to support additional revenues for subsidized classes. This suboptimality is tested by individually estimating time-variant price-elasticities of demand for these industrial customers using Box-Cox and linear regressions. We find that at least for some of these customers, cross-subsidy was suboptimal prior to as late as October 2001, when rates were changed following reforms.

  8. Estimating the price elasticity of beer: meta-analysis of data with heterogeneity, dependence, and publication bias.

    Science.gov (United States)

    Nelson, Jon P

    2014-01-01

    Precise estimates of price elasticities are important for alcohol tax policy. Using meta-analysis, this paper corrects average beer elasticities for heterogeneity, dependence, and publication selection bias. A sample of 191 estimates is obtained from 114 primary studies. Simple and weighted means are reported. Dependence is addressed by restricting number of estimates per study, author-restricted samples, and author-specific variables. Publication bias is addressed using funnel graph, trim-and-fill, and Egger's intercept model. Heterogeneity and selection bias are examined jointly in meta-regressions containing moderator variables for econometric methodology, primary data, and precision of estimates. Results for fixed- and random-effects regressions are reported. Country-specific effects and sample time periods are unimportant, but several methodology variables help explain the dispersion of estimates. In models that correct for selection bias and heterogeneity, the average beer price elasticity is about -0.20, which is less elastic by 50% compared to values commonly used in alcohol tax policy simulations. Copyright © 2013 Elsevier B.V. All rights reserved.

  9. Price Elasticity of Demand and Capacity-Restraint Transit Fare Strategy: A Case Study of Bangkok Mass Transit System

    Directory of Open Access Journals (Sweden)

    Ackchai Sirikijpanichkul

    2015-01-01

    Full Text Available Traffic congestion is a chronic problem of Bangkok. Similar to other metropolises, the city perpetually seeks for alternatives to road travel. Mass rapid transit seems to be the only way out that is expected to mitigate traffic congestion in the city. However, without common fare system, travelers need to pay an initial entrance fee every time they enter each transit system. This excess cost tapers the demand and affects the efficient use of the system. This research investigates the influence of fare price on transit use which is measured by price elasticity of demand and proposes the optimum fare price if the common fare is used. The analysis is based on the findings from the stated preference survey techniques. Finally, the conclusion on fare level that encourage more patronage, maintain service quality and operator revenue is addressed.

  10. Estimation of area and income elasticities of water demand in a number of cities and towns in Gauteng

    OpenAIRE

    2012-01-01

    M.Ing. Water demand prediction can be useful for future planning and has a significant economic effect on a city, town or suburb. There are numerous factors influencing water demand and therefore influencing the prediction thereof. The effect of each of these factors on the water demand is called the elasticity of that factor. The main aim of this study is to determine area and income elasticities of demand. This will enable the reader to predict water demand by taking stand size (area) an...

  11. Availability, quality and price of produce in low-income neighbourhood food stores in California raise equity issues.

    Science.gov (United States)

    Gosliner, Wendi; Brown, Daniel M; Sun, Betty C; Woodward-Lopez, Gail; Crawford, Patricia B

    2018-06-01

    To assess produce availability, quality and price in a large sample of food stores in low-income neighbourhoods in California. Cross-sectional statewide survey. Between 2011 and 2015, local health departments assessed store type, WIC (Supplemental Nutrition Program for Women, Infants, and Children)/SNAP (Supplemental Nutrition Assistance Program) participation, produce availability, quality and price of selected items in stores in low-income neighbourhoods. Secondary data provided reference chain supermarket produce prices matched by county and month. t Tests and ANOVA examined differences by store type; regression models examined factors associated with price. Large grocery stores (n 231), small markets (n 621) and convenience stores (n 622) in 225 neighbourhoods. Produce in most large groceries was rated high quality (97 % of fruits, 98 % of vegetables), but not in convenience stores (25 % fruits, 14 % vegetables). Small markets and convenience stores participating in WIC and/or SNAP had better produce availability, variety and quality than non-participating stores. Produce prices across store types were, on average, higher than reference prices from matched chain supermarkets (27 % higher in large groceries, 37 % higher in small markets, 102 % higher in convenience stores). Price was significantly inversely associated with produce variety, adjusting for quality, store type, and SNAP and WIC participation. The study finds that fresh produce is more expensive in low-income neighbourhoods and that convenience stores offer more expensive, poorer-quality produce than other stores. Variety is associated with price and most limited in convenience stores, suggesting more work is needed to determine how convenience stores can provide low-income consumers with access to affordable, high-quality produce. WIC and SNAP can contribute to the solution.

  12. Market versus agriculture in Poland – macroeconomic relations of incomes, prices and productivity in terms of the sustainable development paradigm

    OpenAIRE

    CZYŻEWSKI, Bazyli; MAJCHRZAK, Adam

    2017-01-01

    In the article macroeconomic relations of prices, productivity and incomes in Polish agriculture in the context of changes in the EU Common Agricultural Policy were studied. The authors have developed a macroeconomic model which explains these relations and confirms the occurrence of market failures in agriculture in Poland. The developed model proves the existence of a puzzling exchangeable relation between the real productivity of production factors in agriculture, and agricultural incomes,...

  13. Aim High or Go Low? Pricing Strategies and Enrollment Effects when the Net Price Elasticity Varies with Need and Ability

    Science.gov (United States)

    Curs, Bradley R.; Singell, Larry D., Jr.

    2010-01-01

    Detailed data on individual applicants to a large public university are used to demonstrate that net price responsiveness decreases with need and ability. Enrollment effects are simulated and show a movement towards a high tuition/high aid (low tuition/low aid) policy significantly lowers (raises) tuition revenue with a modest increase (decrease)…

  14. Alcohol taxes' contribution to prices in high and middle-income countries: Data from the International Alcohol Control Study.

    Science.gov (United States)

    Wall, Martin; Casswell, Sally; Callinan, Sarah; Chaiyasong, Surasak; Viet Cuong, Pham; Gray-Phillip, Gaile; Parry, Charles

    2017-11-22

    Taxation is increasingly being used as an effective means of influencing behaviour in relation to harmful products. In this paper we use data from six participating countries of the International Alcohol Control Study to examine and evaluate their comparative prices and tax regimes. We calculate taxes and prices for three high-income and three middle-income countries. The data are drawn from the International Alcohol Control survey and from the Alcohol Environment Protocol. Tax systems are described and then the rates of tax on key products presented. Comparisons are made using the Purchasing Power Parity rates. The price and purchase data from each country's International Alcohol Control survey is then used to calculate the mean percentage of retail price paid in tax weighted by actual consumption. Both ad valorem and specific per unit of alcohol taxation systems are represented among the six countries. The prices differ widely between countries even though presented in terms of Purchasing Power Parity. The percentage of tax in the final price also varies widely but is much lower than the 75% set by the World Health Organization as a goal for tobacco tax. There is considerable variation in tax systems and prices across countries. There is scope to increase taxation and this analysis provides comparable data, including the percentage of tax in final price, from some middle and high-income countries for consideration in policy discussion. © 2017 The Authors Drug and Alcohol Review published by John Wiley & Sons Australia, Ltd on behalf of Australasian Professional Society on Alcohol and other Drugs.

  15. Understanding access to medicines in low- and middle-income countries through the use of price and availability indicators

    NARCIS (Netherlands)

    Cameron, A.M.

    2013-01-01

    Objectives: While it is generally understood that large sections of the population in low- and middle-income countries (LMICs) lack access to medicines, the concept of access is difficult to define and measure.Data on medicine prices and availability obtained through national facility-based surveys

  16. Using non-time-series to determine supply elasticity: how far do prices change the Hubbert curve?

    International Nuclear Information System (INIS)

    Reynolds, D.B.

    2002-01-01

    An important concern of OPEC's work is to be able to understand how much supply of oil exists in different countries, in order to help better conserve oil. This paper extends M. King Hubbert's oil production and discovery forecasting model (Hubbert, 1962), using a non-time-series cumulative discovery and production quadratic Hubbert curve and structural shift variables to model technology and regulation changes. The model can be used to determine better world oil supplies. Price is tested, to see how powerful it is for increasing or decreasing oil supply. Using a trend of cumulative production, instead of time, will help to better fix the supply elasticity with respect to price, which is shown to be very inelastic. An interesting question is whether cumulative discovery or production constitutes an I(2) variable. This paper explains that they are not I(2) variables. (Author)

  17. Estimating the Own-Price Elasticity for Irrigation Water in the Musi Catchment of India

    NARCIS (Netherlands)

    Hellegers, P.J.G.J.; Davidson, B.

    2011-01-01

    As irrigation water is an input into a production process, its demand must be ‘derived’. According to theory, a derived demand schedule should be downward sloping and dependent on the outputs produced from it, the prices of other inputs and the price of the water itself. Problems arise when an

  18. The effects of the energy price reform on households consumption in Iran

    International Nuclear Information System (INIS)

    Moshiri, Saeed

    2015-01-01

    The substantial subsidizing of energy prices over the years has led to high energy consumption, inefficiencies, fiscal pressures, and environmental problems in Iran. To address the increasing socio-economic problems associated with the energy subsidies, the government embarked on an aggressive energy price reform through which energy subsidies were removed and cash handouts were given to all households in 2010. In this paper, I analyze the effectiveness of the energy price reform in Iran by estimating energy demand elasticities for households in different income groups. I apply a two-stage consumer optimization model and estimate the system of energy expenditures shares using the household budget survey data for the period 2001–2008. The results show that the overall price elasticities of demand are small, but income elasticities are close to one. The results also indicate heterogeneous responses to energy price and income changes in different income groups. Specifically, the urban households show stronger response to price changes, but rural households, particularly mid-income households, to income changes. These findings suggest that the current policy of price increases would not solely be able to reduce energy consumption and, therefore, it should be geared towards increasing energy efficiency through a series of price and non-price measures. - Highlights: • The effectiveness of the recent energy price reform in Iran is analyzed. • Energy demand elasticities for households in different income groups are estimated. • A two-stage optimization model was applied to estimate the system of equations using micro-data for 2001–2008. • The price elasticities are small and income elasticities rather large, but responses are heterogeneous. • A price and non-price reform policy package is needed for different income groups and regions

  19. Estimating elasticity for residential electricity demand in China.

    Science.gov (United States)

    Shi, G; Zheng, X; Song, F

    2012-01-01

    Residential demand for electricity is estimated for China using a unique household level dataset. Household electricity demand is specified as a function of local electricity price, household income, and a number of social-economic variables at household level. We find that the residential demand for electricity responds rather sensitively to its own price in China, which implies that there is significant potential to use the price instrument to conserve electricity consumption. Electricity elasticities across different heterogeneous household groups (e.g., rich versus poor and rural versus urban) are also estimated. The results show that the high income group is more price elastic than the low income group, while rural families are more price elastic than urban families. These results have important policy implications for designing an increasing block tariff.

  20. Estimating the Price Elasticity of Demand for Different Levels of Alcohol Consumption among Young Adults

    OpenAIRE

    Vinish Shrestha

    2015-01-01

    Understanding the effect of higher alcohol prices on alcohol demand according to one’s level of alcohol consumption is crucial while evaluating the effectiveness of using alcohol taxes as an alcohol-control medium. In this study, I estimate the differential responses to alcohol prices on alcohol demand for young adults by asking whether heavy drinkers are more responsive to higher alcohol prices than light and moderate drinkers. To conduct the analysis, I use the data from the National Long...

  1. The impact of introducing patient co-payments in Germany on the use of IVF and ICSI: a price-elasticity of demand assessment.

    Science.gov (United States)

    Connolly, M P; Griesinger, G; Ledger, W; Postma, M J

    2009-11-01

    Authorities concerned by rising healthcare costs have a tendency to target reproductive treatments because of the perception that infertility is a low priority. In 2004 German health authorities introduced a 50% co-payment for patients, in an effort to save cost. We explored the impact of this pricing policy on the utilization of reproductive treatments in Germany. Using aggregated annual in-vitro fertilization (IVF) and intracytoplasmic sperm injection (ICSI) cycle data in Germany, we evaluated the relationship between changes in the number of cycles in relation to changes in costs faced by consumers following the introduction of a patient co-payment from 'no fees' to 1500-2000 euros by estimating the short-run price-elasticity of demand. The impact of introducing patient co-payments for IVF/ICSI on the likelihood of switching to other low-cost fertility treatments was evaluated using the cross-price elasticity methodology. RESULTS The reduction in demand for IVF and ICSI cycles in the year following the introduction of patient co-payments resulted in elasticities of -0.41 and -0.34, respectively. The price-elasticity for the combined reduction of IVF/ICSI in relation to the co-payment was estimated to be -0.36. The cross-price elasticity for clomifene was close to zero (-0.01) suggesting that demand for these interventions are independent of each other and no substitution occurred. We report price elasticities for IVF and ICSI of -0.41 and -0.34 after introducing a 500-2000 euros co-payment. These findings likely represent short-run elasticities that are likely to vary over time as factors that influence the supply and demand for fertility treatments change.

  2. Migration Elasticities, Fiscal Federalism and the Ability of States to Redistribute Income

    OpenAIRE

    Giertz, Seth H.; Tosun, Mehmet S.

    2012-01-01

    This paper develops a simulation model in order to examine the effectiveness of state attempts at redistribution under a variety of migration elasticity assumptions. Key outputs from the simulation include the impact of tax-induced migration on state revenues, excess burden, and fiscal externalities. With modest migration elasticities, the costs of state-level redistribution are substantial, but state action may still be preferred to a federal policy that is at odds with preferences of a stat...

  3. REGRESSIONAL ANALYSIS OF CONSUMER NUTRITION SPENDINGS IN THE HOUSEHOLDS OF THE REGION AS FUNCTION OF PERSONAL INCOME AND PRICE

    Directory of Open Access Journals (Sweden)

    I. N. Siulzhyn

    2017-01-01

    Full Text Available The multiple regression analysis method is widely used to describe and investigate some processes of the regional economy and may be also used to solve an important problem of distinguishing the effects of various independent or partially dependent variables. The regression model considered includes the specification of its constituent relationships, the choice of variables included in each relation, and the definition of mathematical functions corresponding to these relations. Regression model of food expenditure with two independent variables - expenditure as a function of income and price is based upon the official quarterly averaged statistical information (2015 and 2016 years. All the data are presented in the interpolated monthly version. Regression analysis made it possible to specify the dependence of expenditure on food in the country's households on the disposable personal income and the relative price of foodstuffs, which must be taken into account when solving problems of the region's social and economic development.

  4. Regional Differences in the Price-Elasticity of Demand for Energy

    Energy Technology Data Exchange (ETDEWEB)

    Bernstein, M. A.; Griffin, J.

    2006-02-01

    At the request of the National Renewable Energy Laboratory (NREL), the RAND Corporation examined the relationship between energy demand and energy prices with the focus on whether the relationships between demand and price differ if these are examined at different levels of data resolution. In this case, RAND compares national, regional, state, and electric utility levels of data resolution. This study is intended as a first step in helping NREL understand the impact that spatial disaggregation of data can have on estimating the impacts of their programs. This report should be useful to analysts in NREL and other national laboratories, as well as to policy nationals at the national level. It may help them understand the complex relationships between demand and price and how these might vary across different locations in the United States.

  5. How Are Property Investment Returns Determined? : Estimating the Micro-Structure of Asset Prices, Property Income, and Discount Rates

    OpenAIRE

    Shimizu, Chihiro

    2014-01-01

    How exactly should one estimate property investment returns? Investors in property aim to maximize capital gains from price increases and income generated by the property. How are the returns on investment in property determined based on its characteristics, and what kind of market characteristics does it have? Focusing on the Tokyo commercial property market and residential property market, the purpose of this paper was to break down and measure the micro-structure of property investment ret...

  6. DETERMINING THE INCOME ELASTICITY OF DEMAND FOR HEALTH EXPENDITURE : AN EMPIRICAL ANALYSIS

    OpenAIRE

    Farhana Binti MAHARUDIN; Zahariah Binti Mohd ZAIN; Irfah Najihah Binti Basir MALAN

    2013-01-01

    The main purpose of this study is to investigate the long-run relationship between public health care expenditure and income in Malaysia. There are many factors that affect health care expenditure positively such as income per head, population, the ageing population and national saving. The public health care is essential for economic growth and hence needs greater government involvement. The results of the unit root test indicated that all variables involved are stationary. The Johansen coin...

  7. The impacts of petroleum price fluctuations on income distribution across ethnic groups in Malaysia

    NARCIS (Netherlands)

    Saari, M. Yusof; Dietzenbacher, Erik; Los, Bart

    2016-01-01

    Crude oil price hikes have compelled governments of developing countries to let domestic prices of energy increase. Fiscal priorities made it impossible to fully compensate the hikes by raising energy subsidies. This paper examines the potential impacts of a limited deregulation of the petroleum

  8. The economic cost of fuel price subsidies in Ghana

    Science.gov (United States)

    Ofori, Roland Oduro

    I adapt the Harberger formula for deadweight loss to develop approximations for the deadweight loss created by multiple fuel price subsidies. I also estimate the own-price, cross-price, and income elasticities of demand for gasoline and diesel in Africa. I use data on fuel prices and sales in combination with my formulas and elasticity estimates to calculate the deadweight loss of fuel price subsidies in Ghana from 2009 to 2014. I show that the average efficiency cost of the gasoline and diesel price subsidies in Ghana is 0.8% of fuel price subsidy transfers. This result stresses the futility of basing subsidy reforms on economic efficiency losses, which are relatively small due to very inelastic energy demand, and the need for such reforms to be motivated by the poor-targeting of subsidies to low-income households and the impact of subsidies on government debt-financing.

  9. A STUDY OF FACTORS AFFECTING THE ROOM PRICE PROPOSEDBYHOTELS TO INCOMING TRAVEL AGENCIES: FETHİYE SAMPLE

    Directory of Open Access Journals (Sweden)

    Emre ERGUN

    2012-07-01

    Full Text Available The purpose of the study wastoassessto understand the factors affecting theroom priceproposed by hotels to incoming travel agencies.The data wascollected from the managers hired in Fethiye hotelsusing questionnaire techniqueand analyzed using the statistical package programs.The degree of the factorsaffecting the room price such asthe positive relations between hotel managers andtravel agency managers,regularpayments to hotels, the location ofthe hotel andso on were determined.This study aimedtocontributethe travel agency managerson their strategiesneededin order toimprove screwing down onaccomodationcosts.

  10. Equity in Pharmaceutical Pricing and Reimbursement: Crossing the Income Divide in Asia Pacific.

    Science.gov (United States)

    Daems, Rutger; Maes, Edith; Glaetzer, Christoph

    2013-05-01

    The article takes a three-dimensional approach (triangulation) in defining international pricing policy for pharmaceuticals using cost-effectiveness analysis (CEA), willingness-to-pay (WTP) analysis, and ability-to-pay (ATP) analysis. It attempts to find a balance between the various economic methods of which some focus on effectiveness while others are geared toward incorporating equity in the equation. A critical review of the first two established economic methods and their ability to evaluate not only "efficacy" but also "fairness" in pricing decisions identifies a gap in the latter. Therefore, a third analytic method is presented that measures the ATP based on a country's score in the human development index of the United Nations Development Program for 120 countries. This approach allows practicing differential pricing among and within countries. To refine this equity-driven pricing concept, two additional parameters can be added to the model: the Oxford "Multidimensional Poverty Index" and the "Out-of-Pocket" or "Self Pay" health expenditure as reported by the World Bank. There is no hierarchy between the above three pricing methods. Because one method provides further insight into the other, however, it is recommended to start with CEA followed by WTP analysis. These types of analysis are closely linked in that the first provides the CE ratio for the compound investigated and the other sets the anticipated ceiling threshold of the payer's WTP (in a particular country). The ATP method provides a supplementary "equity" check and facilitates the process of equity-based differential pricing. A third method should be used in conjunction with the standard CEA and WTP analysis that measures the ATP with the human development index as yardstick to provide sustainable and equitable access to medicines. We recommend that ATP analysis becomes an additional practice in policy decision making and in defining international pricing strategies for pharmaceuticals

  11. Fuel consumption: short term and long term price impacts per population type

    International Nuclear Information System (INIS)

    2011-01-01

    This report presents assessments of the price sensitivity of household fuel consumption. After a literature review on price-elasticity assessments and the use of pseudo-panels, the investigation analyses the deciding factors of the household fuel expense and its evolution between 1985 and 2006. It proposes a short term price-elasticity assessment based on the most recent survey, and also proposes price-elasticity assessments for sub-populations, notably in terms of income level or location (rural or urban areas)

  12. The Big Drink Debate: perceptions of the impact of price on alcohol consumption from a large scale cross-sectional convenience survey in north west England.

    Science.gov (United States)

    Cook, Penny A; Phillips-Howard, Penelope A; Morleo, Michela; Harkins, Corinne; Briant, Linford; Bellis, Mark A

    2011-08-23

    A large-scale survey was conducted in 2008 in north west England, a region with high levels of alcohol-related harm, during a regional 'Big Drink Debate' campaign. The aim of this paper is to explore perceptions of how alcohol consumption would change if alcohol prices were to increase or decrease. A convenience survey of residents (≥ 18 years) of north west England measured demographics, income, alcohol consumption in previous week, and opinions on drinking behaviour under two pricing conditions: low prices and discounts and increased alcohol prices (either 'decrease', 'no change' or 'increase'). Multinomial logistic regression used three outcomes: 'completely elastic' (consider that lower prices increase drinking and higher prices decrease drinking); 'lower price elastic' (lower prices increase drinking, higher prices have no effect); and 'price inelastic' (no change for either). Of 22,780 drinkers surveyed, 80.3% considered lower alcohol prices and discounts would increase alcohol consumption, while 22.1% thought raising prices would decrease consumption, making lower price elasticity only (i.e. lower prices increase drinking, higher prices have no effect) the most common outcome (62%). Compared to a high income/high drinking category, the lightest drinkers with a low income (adjusted odds ratio AOR = 1.78, 95% confidence intervals CI 1.38-2.30) or medium income (AOR = 1.88, CI 1.47-2.41) were most likely to be lower price elastic. Females were more likely than males to be lower price elastic (65% vs 57%) while the reverse was true for complete elasticity (20% vs 26%, P price of alcohol reduces consumption, and one in five of the surveyed population agreed; more work is required to increase this agreement to achieve public support for policy change. Such policy should also recognise that alcohol is an addictive drug, and the population may be prepared to pay more to drink the amount they now feel they need.

  13. Reforming residential electricity tariff in China: Block tariffs pricing approach

    International Nuclear Information System (INIS)

    Sun, Chuanwang; Lin, Boqiang

    2013-01-01

    The Chinese households that make up approximately a quarter of world households are facing a residential power tariff reform in which a rising block tariff structure will be implemented, and this tariff mechanism is widely used around the world. The basic principle of the structure is to assign a higher price for higher income consumers with low price elasticity of power demand. To capture the non-linear effects of price and income on elasticities, we set up a translog demand model. The empirical findings indicate that the higher income consumers are less sensitive than those with lower income to price changes. We further put forward three proposals of Chinese residential electricity tariffs. Compared to a flat tariff, the reasonable block tariff structure generates more efficient allocation of cross-subsidies, better incentives for raising the efficiency of electricity usage and reducing emissions from power generation, which also supports the living standards of low income households. - Highlights: • We design a rising block tariff structure of residential electricity in China. • We set up a translog demand model to find the non-linear effects on elasticities. • The higher income groups are less sensitive to price changes. • Block tariff structure generates more efficient allocation of cross-subsidies. • Block tariff structure supports the living standards of low income households

  14. Price

    International Nuclear Information System (INIS)

    Anon.

    1991-01-01

    The price terms in wheeling contracts very substantially, reflecting the differing conditions affecting the parties contracting for the service. These terms differ in the manner in which rates are calculated, the formulas used, and the philosophy underlying the accord. For example, and EEI study found that firm wheeling rates ranged from 20 cents to $1.612 per kilowatt per month. Nonfirm rates ranged from .15 mills to 5.25 mills per kilowatt-hour. The focus in this chapter is on cost-based rates, reflecting the fact that the vast majority of existing contracts are based on rate designs reflecting embedded costs. This situation may change in the future, but, for now, this fact can't be ignored

  15. The search for co-integration between money, prices and income: Low frequency evidence from the Turkish economy

    Directory of Open Access Journals (Sweden)

    Saatçioğlu Cem

    2009-01-01

    Full Text Available In this paper, we aim to test the empirical validity of the QTM relationship for the Turkish economy. Using some contemporaneous time series estimation techniques, our estimation results reveal that stationarity characteristics of the velocities of currency in circulation and the broad money aggregate in the economy cannot be rejected through a quantity theoretical co-integrating long-term variable space. We find that there exists an about one-to-one proportionality between money and prices and money and real income, and that exogeneity of money cannot be rejected for the currency in circulation in the economy. But, the exception here comes from the broad monetary aggregate used in the QTM equation such that money seems to be endogenous as for the long-term variable space.

  16. Prices paid for adult and paediatric antiretroviral treatment by low- and middle-income countries in 2012: high, low or just right?

    Science.gov (United States)

    Perriëns, Joseph H; Habiyambere, Vincent; Dongmo-Nguimfack, Boniface; Hirnschall, Gottfried

    2014-01-01

    A viable market for antiretroviral drugs in low- and middle-income countries is key to the continued scale-up of antiretroviral treatment. We describe the price paid by low- and middle-income countries for 10 first- and 7 second-line adult and paediatric treatment regimens from 2003 to 2012, and compare the price of their finished formulations with the price of their active pharmaceutical ingredients in 2005, 2007, 2010 and 2012. Between 2003 and 2012 the median price of adult first-line treatment regimens per treatment-year decreased from USD499 to USD122, and that of second-line regimens from USD2,934 to USD497. In 2005 adult formulations were sold for a price 170% higher than the cost of their active pharmaceutical ingredients. This margin had decreased to 28% in 2012. Between 2004 and 2013, the price of paediatric treatment per treatment-year decreased from USD585 to USD147 for first-line and from USD763 to USD288 for second-line treatment. In 2005, paediatric treatment regimens were sold at a price 231% higher than the cost of their active pharmaceutical ingredients. This margin remained high and was 195% in 2012. The prices paid for antiretroviral drugs by low- and middle-income countries decreased between 2003 and 2012. Although the margins on their sale decreased, there is likely still space for price reduction, especially for the more recent World Health Organization recommended adult first-line regimens and for paediatric treatment.

  17. Electricity consumption in G7 countries: A panel cointegration analysis of residential demand elasticities

    International Nuclear Information System (INIS)

    Narayan, Paresh Kumar; Smyth, Russell; Prasad, Arti

    2007-01-01

    This article applies recently developed panel unit root and panel cointegration techniques to estimate the long-run and short-run income and price elasticities for residential demand for electricity in G7 countries. The panel results indicate that in the long-run residential demand for electricity is price elastic and income inelastic. The study concludes that from an environmental perspective there is potential to use pricing policies in the G7 countries to curtail residential electricity demand, and thus curb carbon emissions, in the long run. (author)

  18. Optimal Commodity Taxation and Income Distribution

    OpenAIRE

    Benassi, Corrado; Randon, Emanuela

    2015-01-01

    We consider the interplay between income distribution and optimal commodity taxation, linking equity issues to optimal taxes through the effect of income distribution on market demand and its price elasticity. We find conditions to conciliate the equity and efficiency tradeoff and to assess the impact of inequality changes on the optimal taxation of necessity and luxury goods. We show that the regressivity or progressivity of the tax system is determined by the distribution of luxuries and ne...

  19. Impact of a targeted direct marketing price promotion intervention (Buywell) on food-purchasing behaviour by low income consumers: a randomised controlled trial.

    Science.gov (United States)

    Stead, M; MacKintosh, A M; Findlay, A; Sparks, L; Anderson, A S; Barton, K; Eadie, D

    2017-08-01

    Price promotions are a promising intervention for encouraging healthier food purchasing. We aimed to assess the impact of a targeted direct marketing price promotion combined with healthy eating advice and recipe suggestions on the purchase of selected healthier foods by low income consumers. We conducted a randomised controlled trial (n = 53 367) of a direct marketing price promotion (Buywell) combined with healthy eating advice and recipe suggestions for low income consumers identified as 'less healthy' shoppers. Impact was assessed using electronic point of sale data for UK low income shoppers before, during and after the promotion. The proportion of customers buying promoted products in the intervention month increased by between 1.4% and 2.8% for four of the five products. There was significantly higher uptake in the promotion month (P marketing price promotions combined with healthy eating advice and recipe suggestions targeted at low income consumers are feasible and can have a modest impact on short-term food-purchasing behaviour, although further approaches are needed to help sustain these changes. © 2017 The British Dietetic Association Ltd.

  20. Do Income Smoothing Practices Explain the Lower Earnings-Price Ratio of Japanese Firms Compared to Those of the U.S. Firms?

    Directory of Open Access Journals (Sweden)

    Indra Wijaya Kusuma

    2005-01-01

    Another results show that controlling for income smoothing does not eliminate the differences in the earnings-price ratios of the Japanese and U.S. firms. It is appropriate to conclude that although income smoothing plays a role in explaining the variations of earnings-price ratios across Japanese firms, it is not the only factor that contributes to the differences in the earnings-price ratios of Japanese and U.S. firms.  Other factors may play a role which are either country-specific (such as inflationary expectations, tax regimes or firm-specific (such as quality of earnings, real returns as suggested by Brown (1989. The overall results are consistent across samples.

  1. Food prices and poverty negatively affect micronutrient intakes in Guatemala.

    Science.gov (United States)

    Iannotti, Lora L; Robles, Miguel; Pachón, Helena; Chiarella, Cristina

    2012-08-01

    Limited empirical evidence exists for how economic conditions affect micronutrient nutrition. We hypothesized that increasing poverty and rising food prices would reduce consumption of high-quality "luxury" foods, leading to an increased probability of inadequacy for several nutrients. The 2006 Guatemala National Living Conditions Survey was analyzed. First, energy and nutrient intakes and adequacy levels were calculated. Second, the income-nutrient relationships were investigated by assessing disparities in intakes, determining income-nutrient elasticities, and modeling nutrient intakes by reductions in income. Third, the food price-nutrient relationships were explored through determination of price-nutrient elasticities and modeling 2 price scenarios: an increase in food prices similar in magnitude to the food price crisis of 2007-2008 and a standardized 10% increase across all food groups. Disparities in nutrient intakes were greatest for vitamin B-12 (0.38 concentration index) and vitamin A (0.30 concentration index); these nutrients were highly and positively correlated with income (r = 0.22-0.54; P < 0.05). Although the baseline probability of inadequacy was highest for vitamin B-12 (83%), zinc showed the greatest increase in probability of inadequacy as income was reduced, followed by folate and vitamin A. With rising food prices, zinc intake was most acutely affected under both scenarios (P < 0.05) and folate intake in the poorest quintile (+7 percentage points) under the 10% scenario. Price-nutrient elasticities were highest for vitamin B-12 and the meat, poultry, and fish group (-0.503) and for folate and the legumes group (-0.343). The economic factors of food prices and income differentially influenced micronutrient intakes in Guatemala, notably zinc and folate intakes.

  2. Elasticity of Long Distance Travelling

    DEFF Research Database (Denmark)

    Knudsen, Mette Aagaard

    2011-01-01

    With data from the Danish expenditure survey for 12 years 1996 through 2007, this study analyses household expenditures for long distance travelling. Household expenditures are examined at two levels of aggregation having the general expenditures on transportation and leisure relative to five other...... aggregated commodities at the highest level, and the specific expenditures on plane tickets and travel packages at the lowest level. The Almost Ideal Demand System is applied to determine the relationship between expenditures on transportation and leisure and all other purchased non-durables within...... packages has higher income elasticity of demand than plane tickets but also higher than transportation and leisure in general. The findings within price sensitiveness are not as sufficient estimated, but the model results indicate that travel packages is far more price elastic than plane tickets which...

  3. Pricing of electricity in Indonesia

    International Nuclear Information System (INIS)

    Amarullah, M.

    1983-01-01

    The objectives of this study are 1) to establish a sound theoretical basis for the determinants of electricity demand in Indonesia, 2) to measure the welfare losses of existing electricity pricing, and 3) to suggest a method of reducing these welfare losses. An econometric model for electricity demand is estimated using pooled time-series of fifteen regions in Indonesia covering the period 1970-1979. The short run price elasticities for both residential and industrial/business sectors are found to be inelastic, while the long run price elasticities for these sectors are found to be quite elastic with a value of -.61 for the residential sector and of -1.1 for the industrial/business sector. Income elasticity is .8 in the short run and around 1.00 for the long run. The exposure variable that captures the accessibility of electricity, has long run elasticity of 1.00 for the residential sector and less than 1.00 for the industrial/business sector. Due to distributional considerations, the 1980's electricity rate was set below its efficient level, and has created a welfare loss of Rp.8273.23 million per month. This accounts for 36.03% of the monthly electricity revenue. A rebate mechanism is recommended in this study, which provides a way to mitigate conflicting aspects of efficiency and equity

  4. Fuel consumption: short term and long term price impacts per population type; Consommation de carburant: effets des prix a court et a long termes par type de population

    Energy Technology Data Exchange (ETDEWEB)

    NONE

    2011-07-01

    This report presents assessments of the price sensitivity of household fuel consumption. After a literature review on price-elasticity assessments and the use of pseudo-panels, the investigation analyses the deciding factors of the household fuel expense and its evolution between 1985 and 2006. It proposes a short term price-elasticity assessment based on the most recent survey, and also proposes price-elasticity assessments for sub-populations, notably in terms of income level or location (rural or urban areas)

  5. Regarding fuel prices and automobility. A brief analysis of price and cost elasticities; Over brandstofprijzen en automobiliteit. Een beknopte analyse van prijs- en kostenelasticiteit

    Energy Technology Data Exchange (ETDEWEB)

    Groot, W.

    2012-01-15

    Car drivers do not drive significantly less when fuel prices at the pump rise. If fuel prices increase by approximately 12.5 percent, the long-term decrease in car kilometres travelled is just 2.5 percent. Higher fuel prices have also not resulted in a more fuel-efficient 'car fleet' (i.e. the range of available car model types). The fuel consumption rate per kilometre remained relatively constant from the late 1980s to 2009, although recent years have seen a marked improvement in the per kilometre fuel consumption rate, as measured in CO2 emissions of new passenger cars. These were the findings of the title study, conducted by the KiM Netherlands Institute for Transport Policy Analysis. This study was based on data covering the period 1980 to 2009. The majority of the definitive effects of higher fuel prices revealed in this study were less pronounced than the effects previously cited in available literature, especially with regard to the long-term effects [Dutch] Uit de titel studie blijkt dat automobilisten in beperkte mate minder gaan rijden als de brandstofprijzen aan de pomp stijgen. Een stijging van de benzineprijs met ongeveer 12,5 procent leidt op langere termijn tot een vermindering van de hoeveelheid afgelegde kilometers met 2,5 procent. De hoge brandstofprijzen hebben ook niet geleid tot een zuiniger wagenpark. Het benzineverbruik per kilometer is tussen het eind van de jaren tachtig en 2009 vrijwel gelijk gebleven. Met als kanttekening dat in de meest recente jaren sprake is van een zichtbare verbetering van het verbruik per kilometer, afgemeten aan de CO2-uitstoot van nieuwe personenauto's. Het KiM heeft zich in de studie gebaseerd op cijfers over de periode 1980-2009. De meeste in het onderzoek vastgestelde effecten van hogere benzineprijzen zijn kleiner dan de effecten die in de beschikbare literatuur zijn aangetroffen. Dit geldt vooral voor de effecten op de lange termijn.

  6. Regarding fuel prices and automobility. A brief analysis of price and cost elasticities; Over brandstofprijzen en automobiliteit. Een beknopte analyse van prijs- en kostenelasticiteit

    Energy Technology Data Exchange (ETDEWEB)

    Groot, W.

    2012-01-15

    Car drivers do not drive significantly less when fuel prices at the pump rise. If fuel prices increase by approximately 12.5 percent, the long-term decrease in car kilometres travelled is just 2.5 percent. Higher fuel prices have also not resulted in a more fuel-efficient 'car fleet' (i.e. the range of available car model types). The fuel consumption rate per kilometre remained relatively constant from the late 1980s to 2009, although recent years have seen a marked improvement in the per kilometre fuel consumption rate, as measured in CO2 emissions of new passenger cars. These were the findings of the title study, conducted by the KiM Netherlands Institute for Transport Policy Analysis. This study was based on data covering the period 1980 to 2009. The majority of the definitive effects of higher fuel prices revealed in this study were less pronounced than the effects previously cited in available literature, especially with regard to the long-term effects [Dutch] Uit de titel studie blijkt dat automobilisten in beperkte mate minder gaan rijden als de brandstofprijzen aan de pomp stijgen. Een stijging van de benzineprijs met ongeveer 12,5 procent leidt op langere termijn tot een vermindering van de hoeveelheid afgelegde kilometers met 2,5 procent. De hoge brandstofprijzen hebben ook niet geleid tot een zuiniger wagenpark. Het benzineverbruik per kilometer is tussen het eind van de jaren tachtig en 2009 vrijwel gelijk gebleven. Met als kanttekening dat in de meest recente jaren sprake is van een zichtbare verbetering van het verbruik per kilometer, afgemeten aan de CO2-uitstoot van nieuwe personenauto's. Het KiM heeft zich in de studie gebaseerd op cijfers over de periode 1980-2009. De meeste in het onderzoek vastgestelde effecten van hogere benzineprijzen zijn kleiner dan de effecten die in de beschikbare literatuur zijn aangetroffen. Dit geldt vooral voor de effecten op de lange termijn.

  7. Income and Wealth Distribution in a Neoclassical Two-Sector Heterogeneous-Households Growth Model with Elastic Labor Supply and Consumer Durable Goods

    Directory of Open Access Journals (Sweden)

    Wei-Bin ZHANG

    2017-06-01

    Full Text Available This paper proposes a two-sector two-group growth model with elastic labor supply and consumer durable goods. We study dynamics of wealth and income distribution in a competitive economy with capital accumulation as the main engine of economic growth. The model is built on the Uzawa two-sector model. It is also influenced by the neoclassical growth theory and the post-Keynesian theory of growth and distribution. We plot the motion of the economic system and determine the economic equilibrium. We carry out comparative dynamic analysis with regard to the propensity to save and improvements in human capital and technology.

  8. How Are Property Investment Returns Determined? — Estimating the Micro-Structure of Asset Prices, Property Income, and Discount Rates —

    OpenAIRE

    清水, 千弘; Chihiro, Shimizu

    2014-01-01

    How exactly should one estimate property investment returns? Investors in property aim to maximize capital gains from price increases and income generated by the property. How are the returns on investment in property determined based on its characteristics, and what kind of market characteristics does it have? Focusing on the Tokyo commer-cial property market and residential property market, the purpose of this paper was to break down and measure the micro-structure of property investment re...

  9. The Exposure of Mortgage Borrowers to Interest Rate Risk, Income Risk and House Price Risk – Evidence from Swiss Loan Application Data

    OpenAIRE

    Guin, Benjamin; Brown, Martin

    2015-01-01

    We study the exposure of mortgage borrowers in Switzerland to interest rate, income and house price risks and examine how the households’ choice of risky mortgages is related to individual interest rate expectations and risk-aversion. Our analysis is based on a unique data set of household mortgage applications from September 2012 until January 2014. Our assessment of risk exposure among mortgage borrowers in Switzerland is highly sensitive to the underlying assumptions on mortgage costs, hou...

  10. Is the price effect on fuel consumption symmetric? some evidence from an empirical study

    International Nuclear Information System (INIS)

    Sentenac Chemin, E.

    2009-04-01

    We generally consider that the price elasticity of the energy demand is quite small. But it appears that strong increases in gasoline price lead to modifications in consumer behaviours. The high volatility of petroleum prices and thus gasoline prices and the strong increases since the beginning of 2000 justify an analysis of price effects on gasoline consumption. Thus, in this paper, we estimate the effects of price variations on gasoline consumption, in the short and the long-term, in two countries: the United States and India. We use a co-integration modelling to test for long-run relationship between gasoline consumption, income, price and vehicle ownership in the two countries. We use an error correction model to test for short-run prices effects and more precisely for asymmetric effects on demand of increases and decreases in gasoline prices. The main conclusions are the following. - The United States: (1) The long-term price elasticity is relatively high for an industrialised country because gasoline taxes are low (2) Households are more sensitive to a price increase than a price decrease. - India: (1) Price elasticity in the long-run is quite high but is quite small in the short run. It is not surprising for an emergent country (2) It seems that there is no asymmetric effect of price variations on gasoline consumption. (author)

  11. Budget Constraints Affect Male Rats’ Choices between Differently Priced Commodities

    Science.gov (United States)

    Kalenscher, Tobias

    2015-01-01

    Demand theory can be applied to analyse how a human or animal consumer changes her selection of commodities within a certain budget in response to changes in price of those commodities. This change in consumption assessed over a range of prices is defined as demand elasticity. Previously, income-compensated and income-uncompensated price changes have been investigated using human and animal consumers, as demand theory predicts different elasticities for both conditions. However, in these studies, demand elasticity was only evaluated over the entirety of choices made from a budget. As compensating budgets changes the number of attainable commodities relative to uncompensated conditions, and thus the number of choices, it remained unclear whether budget compensation has a trivial effect on demand elasticity by simply sampling from a different total number of choices or has a direct effect on consumers’ sequential choice structure. If the budget context independently changes choices between commodities over and above price effects, this should become apparent when demand elasticity is assessed over choice sets of any reasonable size that are matched in choice opportunities between budget conditions. To gain more detailed insight in the sequential choice dynamics underlying differences in demand elasticity between budget conditions, we trained N=8 rat consumers to spend a daily budget by making a number of nosepokes to obtain two liquid commodities under different price regimes, in sessions with and without budget compensation. We confirmed that demand elasticity for both commodities differed between compensated and uncompensated budget conditions, also when the number of choices considered was matched, and showed that these elasticity differences emerge early in the sessions. These differences in demand elasticity were driven by a higher choice rate and an increased reselection bias for the preferred commodity in compensated compared to uncompensated budget

  12. Budget Constraints Affect Male Rats' Choices between Differently Priced Commodities.

    Science.gov (United States)

    van Wingerden, Marijn; Marx, Christine; Kalenscher, Tobias

    2015-01-01

    Demand theory can be applied to analyse how a human or animal consumer changes her selection of commodities within a certain budget in response to changes in price of those commodities. This change in consumption assessed over a range of prices is defined as demand elasticity. Previously, income-compensated and income-uncompensated price changes have been investigated using human and animal consumers, as demand theory predicts different elasticities for both conditions. However, in these studies, demand elasticity was only evaluated over the entirety of choices made from a budget. As compensating budgets changes the number of attainable commodities relative to uncompensated conditions, and thus the number of choices, it remained unclear whether budget compensation has a trivial effect on demand elasticity by simply sampling from a different total number of choices or has a direct effect on consumers' sequential choice structure. If the budget context independently changes choices between commodities over and above price effects, this should become apparent when demand elasticity is assessed over choice sets of any reasonable size that are matched in choice opportunities between budget conditions. To gain more detailed insight in the sequential choice dynamics underlying differences in demand elasticity between budget conditions, we trained N=8 rat consumers to spend a daily budget by making a number of nosepokes to obtain two liquid commodities under different price regimes, in sessions with and without budget compensation. We confirmed that demand elasticity for both commodities differed between compensated and uncompensated budget conditions, also when the number of choices considered was matched, and showed that these elasticity differences emerge early in the sessions. These differences in demand elasticity were driven by a higher choice rate and an increased reselection bias for the preferred commodity in compensated compared to uncompensated budget conditions

  13. Meat Consumption Patterns among Different Income Groups in Imo ...

    African Journals Online (AJOL)

    This research examined meat consumption patterns among different income groups in Imo State, Nigeria. A combination of purposive and simple random sampling techniques was used to select the markets and 200 respondents. The result of cross price elasticity of meat and fish showed that they were substitute with cross ...

  14. Limits to growth in organic sales : price elasticity of consumer demand for organic food in Dutch supermarkets

    NARCIS (Netherlands)

    Bunte, F.H.J.; Galen, van M.A.; Kuiper, W.E.; Bakker, J.H.

    2007-01-01

    This report determines how sensitive consumer demand for organic products is to changes in the prices of organic products. The report is based on the analysis of scanner data for supermarkets in ten Dutch communities. In the framework of the analysis, an experiment has been performed in which the

  15. Divisia amount and price index for energy consumption

    International Nuclear Information System (INIS)

    Bentzen, J.

    1993-01-01

    In connection with the calculation of total energy consumption related to aggregation of the individual fuel's combustion values, an alternative to Btu aggregation (combustion value measurement), designated the ''Divisia index'', is presented. This represents an economic measure for energy consumption. The Divisia index is demonstrated in relation to total national energy consumption and total energy consumption within the Danish housing sector and also with regard to the estimation of price and income elasticity within energy demand. It is only possible to utilize the Divisia index in relation to the last 20 years, which is the period where energy consumption has stagnated. The question of possible irreversible effects on energy consumption caused by large variations in energy prices is discussed. It is suggested that the reaction to a fall in prices is different and less significant than is the case with price rises. In the long term, results point at a reasonably high price elasticity within energy demand. (AB) (22 refs.)

  16. Short- and long-run elasticities of electricity demand in the Korean service sector

    International Nuclear Information System (INIS)

    Lim, Kyoung-Min; Lim, Seul-Ye; Yoo, Seung-Hoon

    2014-01-01

    This paper attempts to examine the electricity demand function in the Korean service sector using the annual data covering the period 1970–2011. The short- and long-run elasticities of electricity demand with respect to price and income are empirically estimated using a co-integration and error-correction model. The short- and long-run price elasticities are estimated to be −0.421 and −1.002, respectively. The short- and long-run income elasticities are computed to be 0.855 and 1.090, respectively. Electricity demand in the service sector is inelastic to changes in both price and income in the short-run, but elastic in the long-run. Therefore, it appears that a pricing policy is more effective than the direct regulation of reducing electricity demand in the long-run in order to stabilize the electricity demand in the service sector. Moreover, it is necessary to encourage a more efficient use of electricity to cope with increasing demand for electricity following economic growth because the electricity demand in the service sector is income-elastic in the long-run. - Highlights: • We examine the electricity demand function in the Korean service sector. • We use the annual data covering the period 1970–2011. • The demand function is estimated using a co-integration and error-correction model. • The short- and long-run price elasticities are −0.421 and −1.002, respectively. • The short- and long-run income elasticities are 0.855 and 1.090, respectively

  17. Constructing "behavioral" comparison groups: A difference-in-difference analysis of the effect of copayment based on the patient's price elasticity.

    Science.gov (United States)

    Lin, Chaohsin; Hsu, Shuofen

    2014-12-01

    It is well known that the differences-in-differences (DD) estimator is based on the assumption that in the absence of treatment, the average outcomes for the treated group and the control group will follow a common trend over time. That can be problematic, especially when the selection for the treatment is influenced by the individual's unobserved behavior correlating with the medical utilization. The aim of this study was to develop an index for controlling a patient's unobserved heterogeneous response to reform, in order to improve the comparability of treatment assignment. This study showed that a DD estimator of the reform effects can be decomposed into effects induced by moral hazard and by changes in health risk within the same treated/untreated group. This article also presented evidence that the constructed index of the price elasticity of the adjusted clinical group has good statistical properties for identifying the impact of reform. © The Author(s) 2012.

  18. Is the price effect on fuel consumption symmetric? Some evidence from an empirical study

    International Nuclear Information System (INIS)

    Sentenac-Chemin, Elodie

    2012-01-01

    We generally consider that the price elasticity of the energy demand is quite small. But it appears that strong increases in gasoline price lead to modifications in consumer behaviors. The high volatility of petroleum prices and the strong increases since the beginning of 2000 justify an analysis of price effects on gasoline consumption. We estimate the effects of price variations on gasoline consumption, in the United States and India. We use a co-integration modelling to test for long-run relationship between gasoline consumption, income, price and vehicle ownership in the two countries. We use an error correction model to test for short-run prices effects and more precisely for asymmetric effects on demand of increases and decreases in gasoline prices. The main conclusions are the following. Concerning the United States, the long-term price elasticity is relatively high for an industrialised country because gasoline taxes are low, but we show that households are more sensitive to a price increase than a price decrease. About India, price elasticity in the long-run is quite high but is quite small in the short-run. It is not surprising for an emergent country. It seems that there is no asymmetric effect of price variations on gasoline consumption.

  19. Second Thoughts on the European Escape from Hunger: Famines, Price Elasticities, Entitlements, Chronic Malnutrition, and Mortality Rates

    OpenAIRE

    Robert W. Fogel

    1989-01-01

    The six principal findings of this paper are as follows: (1) crisis mortality accounted for less than 5 percent of total mortality in England prior to 1800 and the elimination of crisis mortality accounted for just 15 percent of the decline in total mortality between the eighteenth and nineteenth centuries. (2) The use of variations in wheat prices to measure variations in the food supply has led to gross overestimates of the variability of the food supply. (3) The famines that plagued Englan...

  20. Analysis of cigarette demand in Argentina: the impact of price changes on consumption and government revenues

    Directory of Open Access Journals (Sweden)

    German Rodríguez-Iglesias

    2017-01-01

    Full Text Available Objective. To estimate cigarette demand and to simulate a tax policy targeted to reduce tobacco consumption. Materials and methods. Demand was estimated using a vector error correction model. Simulation exercises present the impact of a tax increase on consumption and revenues. Results. Changes in real income and the real price of cigarettes affect the demand for cigarettes in Argentina. The long term price elasticity is 0.279 (a 10% increase in real prices reduces cigarette consumption by 2.79% per quarter and the long term income elasticity is 0.411 (a 10% increase in real income raises consumption by 4.11% per quarter. Even in a conservative scenario, imulations show that increasing the price of cigarettes by 100% using excise taxes would maximize revenues and reduce cigarette consumption. Conclusion. There is sufficient room to increase taxes, reducing cigarette consumption, while still increasing tax revenues.

  1. Testing the Limits of the Price Elasticity of Potential Students at Colleges and Universities: Has the Increased Direct Cost to the Student Begun to Drive down Higher Education Enrolment?

    Science.gov (United States)

    Fincher, Mark; Katsinas, Stephen

    2017-01-01

    Higher education enrolment has long been known to rise and fall counter to the current economic situation. This counter-cyclical enrolment response represents an economic principle where a price-elastic consumer is more likely make a consumption choice when another valuable use of resources is not available. Higher unemployment has historically…

  2. An analysis of purchase price of legal and illicit cigarettes in urban retail environments in 14 low- and middle-income countries.

    Science.gov (United States)

    Brown, Jennifer; Welding, Kevin; Cohen, Joanna E; Cherukupalli, Rajeev; Washington, Carmen; Ferguson, Jacqueline; Clegg Smith, Katherine

    2017-10-01

    To estimate and compare price differences between legal and illicit cigarettes in 14 low- and middle-income countries (LMIC). A cross-sectional census of all packs available on the market was purchased. Cigarette packs were purchased in formal retail settings in three major cities in each of 14 LMIC: Bangladesh, Brazil, China, Egypt, India, Indonesia, Mexico, Pakistan, the Philippines, Russia, Thailand, Turkey, Ukraine and Vietnam. A total of 3240 packs were purchased (range = 58 packs in Egypt to 505 in Russia). Packs were categorized as 'legal' or 'illicit' based on the presence of a health warning label from the country of purchase and existence of a tax stamp; 2468 legal and 772 illicit packs were in the analysis. Descriptive statistics stratified by country, city and neighborhood socio-economic status were used to explore the association between price and legal status of cigarettes. The number of illicit cigarettes in the sample setting was small (n price of legal cigarettes ranged from US$0.32 in Pakistan (n = 72) to US$3.24 in Turkey (n = 242); median purchase price of illicit cigarettes ranged from US$0.80 in Ukraine (n = 14) to US$3.08 in India (n = 41). The difference in median price between legal and illicit packs as a percentage of the price of legal packs ranged from 32% in Philippines to 455% in Bangladesh. Median purchase price of illicit cigarette packs was higher than that of legal cigarette packs in six countries (Bangladesh, India, Pakistan, Philippines, Thailand, Vietnam). Median purchase price of illicit packs was lower than that of legal packs in Turkey, Ukraine and China. The median purchase price of illicit cigarettes is higher than that of legal cigarette packs in Bangladesh, India, Pakistan, Philippines, Thailand, and Vietnam, Brazil, Egypt, Indonesia, Mexico, Russia appear to have few or no illicit cigarettes for purchase from formal, urban retailers. © 2017 The Authors. Addiction published by John Wiley & Sons Ltd on behalf

  3. Análise da elasticidade de transmissão de preços no mercado brasileiro de algodão Analysis of price transmission elasticity in the Brazilian cotton market

    Directory of Open Access Journals (Sweden)

    Marisa Zeferino Barbosa

    2002-01-01

    Full Text Available The article analyzes the elasticity of price transmission in the Brazilian cotton market from January, 1985, to December, 2000. For this purpose, the Dickey-Fuller Augmented (ADF unit root test, the Johansen cointegration test, the Vector Error Correction model (VEC, and the exogenicity test are applied. The results show that the One Price Law does not apply to the Brazilian cotton market, because variations in cotton international prices are not fully transmitted to domestic prices in Brazil in the long run. The exogenicity test shows that domestic cotton prices in Brazil do not react to changes in the long run equilibrium relationship. Possibly, these results are directly associated with government intervention in the sector (1985 to 1988 as well as to the credit conditions available for cotton acquisition in the international market between 1990 and 1997.

  4. Elasticities of demand for gasoline in Canada and the United States

    International Nuclear Information System (INIS)

    Nicol, C.J.

    2003-01-01

    Fluctuations in the world price of oil, the concern with greenhouse gas emissions and the efforts to revive the 1997 Kyoto Protocol have resulted in renewed interest in the estimation of elasticities of demand for gasoline. In this paper, a complete system of demand equations is estimated, including an equation for the demand for gasoline. Canadian family expenditure (FAMEX) and United States consumer expenditure (CEX) survey data are used. Household-level data permits estimation of elasticities for various household groups. Also, differences in demand responsiveness to own-price and income changes are estimated for different regions in Canada and the United States. Demand is found to be own-price and income inelastic, on the whole, as reported in earlier studies. There is also variation in these elasticities across regions of Canada and the United States. However, larger differences are observed with respect to household size and housing tenure, than to region of residence

  5. Soft drink prices, sales, body mass index and diabetes: Evidence from a panel of low-, middle- and high-income countries.

    Science.gov (United States)

    Goryakin, Yevgeniy; Monsivais, Pablo; Suhrcke, Marc

    2017-12-01

    We take advantage of four different cross-country datasets containing data on 78 countries for the period 1999-2014, in order to assess the relationship of carbonated soft drinks' sales, as well as their prices, with body mass index (BMI), overweight, obesity and diabetes. Using an ecological study design and multivariate regression longitudinal estimation approaches, we find that carbonated soft drink sales were significantly positively related to BMI, overweight and obesity - but only in the low and lower-middle income countries. This finding was robust to a number of sensitivity and falsification checks. In this sub-sample, an increase in per capita soft drink sales by 1 litre per year was related to an increase of BMI by about 0.009 kg/m 2 (p < 0.1).. This is a small effect, implying that halving annual consumption per capita in this group of countries would result in a drop of BMI by only about 0.03 kg/m 2 . Although soft drink prices were negatively related to weight-related outcomes in the sample of higher middle income and high income countries, this finding was not robust to falsification checks. The results thus suggest that sales restrictions to steer consumers away from soft drinks could indeed have a beneficial health effects in poorer countries, although the effect magnitude appears to be very small. However, given potential limitations of using ecological research design, results from individual level studies would be required to further ascertain the role of soft drink sales and prices in obesity and diabetes.

  6. [Study on elasticity of medical service demand at the township level in China].

    Science.gov (United States)

    Shi, Hong-xing; Lv, Jun; Xie, Yi-ping; Wang, Ying; Jia, Jin-zhong; Chang, Feng-shui; Duan, Lin; Sun, Mei; Wang, Zhi-feng; Hao, Mo

    2010-06-18

    To find out the economic laws regulating medical service demand in accordance with influencing factors at the township level, thus to provide references for further adjusting the medical service demand reasonably in the future. The model of medical service demand was established to measure the elasticity of demand in 49 township health clinics in 1995, 1999, 2003 and 2007. The price elasticity of outpatient and inpatient demand was stable during the four periods, and the average value was -0.029 and -0.132 respectively; the average value of income elasticity was 0.973 and 0.977, registering a downward trend in general. The medical service demand at the township level is price inelastic, indicating that it is a necessity for rural residents. The downward trend of income elasticity under the influence of some health policies illustrates a lightening in economic burden for medical service demand among rural residents in township health clinics.

  7. Price and maternal obesity influence purchasing of low- and high-energy-dense foods2

    Science.gov (United States)

    Epstein, Leonard H; Dearing, Kelly K; Paluch, Rocco A; Roemmich, James N; Cho, David

    2007-01-01

    Background Price can influence food purchases, which can influence consumption. Limited laboratory research has assessed the effect of price changes on food purchases, and no research on individual differences that may interact with price to influence purchases exists. Objective We aimed to assess the influence of price changes of low-energy-density (LED) and high-energy-density (HED) foods on mother’s food purchases in a laboratory food-purchasing analogue. Design Mothers were randomly assigned to price conditions in which the price of either LED or HED foods was manipulated from 75% to 125% of the reference purchase price, whereas the price of the alternative foods was kept at the reference value. Mothers completed purchases for 2 income levels ($15 or $30 per family member). Results Purchases were reduced when prices of LED (P elasticity of HED foods and substitution of LED for HED foods. PMID:17921365

  8. Long-run gasoline demand for passenger cars: the role of income distribution

    International Nuclear Information System (INIS)

    Storchmann, Karl

    2005-01-01

    It is commonly agreed that the level of income and prices are crucial determinants of the consumption of motor gasoline. The respective long run price and income elasticities are regularly calculated using cross sectional models. Despite the acknowledgement of the role of income distribution, it plays no role in intercountry cross sectional models. This is due to a lack of appropriate data. This paper shows that the omission of distributional characteristics provides misleading elasticities. Using available distributional measures this paper is referring to an income threshold, which is crucial to the acquisition of an automobile. It is shown that on the one hand, in poor countries an unequal income distribution is needed to enable at least some people to buy automobiles. On the other hand, in wealthy countries an unequal income distribution would exclude some people from acquiring automobiles. Hence, depending on the income level, inequality has a diverging impact on the ability to buy durable goods. The second part of this paper develops a pooled 90-country model to examine this approach empirically. It could be shown that distribution variables are highly significant to explain the demand for automobiles and motor gasoline. Moreover, the consideration of the distribution of income leads to a considerable decrease in income elasticity values. This is mainly due to the positive correlation between income level and income equality within the sample

  9. Why Changes in Price Matter When Thinking About Marijuana Policy: A Review of the Literature on the Elasticity of Demand.

    Science.gov (United States)

    Pacula, Rosalie Liccardo; Lundberg, Russell

    Recent debates regarding liberalization of marijuana policies often rest on assumptions regarding the extent to which such policy changes would lead to a change in marijuana consumption and by whom. This paper reviews the economics literature assessing the responsiveness of consumption to changes in price and enforcement risk and explicitly considers how this responsiveness varies by different user groups. In doing so, it demonstrates how most of the research has examined responsiveness to prevalence of use, which is a composite of different user groups, rather than level of consumption among regular or heavy users, which represent the largest share of total quantities consumed. Thus, it is not possible to generate reliable estimates of the impact of liberalizing policies on either tax revenues or harms, as these outcomes are most directly influenced by the amounts consumed by regular or heavy users, not prevalence rates.

  10. Motor fuel prices in Turkey

    International Nuclear Information System (INIS)

    Erdogdu, Erkan

    2014-01-01

    The world's most expensive motor fuel (gasoline, diesel and LPG) is sold most likely in the Republic of Turkey. This paper investigates the key issues related to the motor fuel prices in Turkey. First of all, the paper analyses the main reason behind high prices, namely motor fuel taxes in Turkey. Then, it estimates the elasticity of motor fuel demand in Turkey using an econometric analysis. The findings indicate that motor fuel demand in Turkey is quite inelastic and, therefore, not responsive to price increases caused by an increase in either pre-tax prices or taxes. Therefore, fuel market in Turkey is open to opportunistic behavior by firms (through excessive profits) and the government (through excessive taxes). Besides, the paper focuses on the impact of high motor fuel prices on road transport associated activities, including the pattern of passenger transportation, motorization rate, fuel use, total kilometers traveled and CO 2 emissions from road transportation. The impact of motor fuel prices on income distribution in Turkey and Turkish public opinion about high motor fuel prices are also among the subjects investigated in the course of the study. - Highlights: • The key issues (e.g. taxes) related to motor fuel prices in Turkey are explored. • Their impact on transport activities and income distribution is also investigated. • An econometric analysis is performed to estimate motor fuel demand in Turkey. • Motor fuel demand in Turkey is found to be quite inelastic. • Turkish fuel market is open to opportunistic behavior by firms and the government

  11. Poverty and price transmission

    DEFF Research Database (Denmark)

    Elleby, Christian

    A key parameter determining the welfare impact from a world market shock is the transmission elasticity which measures the average domestic response to an international price change. Many studies have estimated price transmission elasticities for a large number of countries but the variation in t...

  12. An analysis of factors affecting price volatility of the US oil market

    International Nuclear Information System (INIS)

    Yang, C.W.; Hwang, M.J.; Huang, B.N.

    2002-01-01

    This paper studies the price volatility of the crude oil market by examining the market structure of OPEC, the stable and unstable demand structure, and related elasticity of demand. In particular, the impacts of prosperity and recession of the world economy and the resulting demand shift on crude oil price are investigated. The error correction model is used to estimate the demand relations and related elasticity. The income effect on demand functions is evaluated to shed light on future prices. A simulation of potential oil prices under different scenarios on a cut of one million barrels per day by OPEC is evaluated. From our simulation, given the 4% cut in OPEC production, the oil price is expected to increase unless the recession is severe. The magnitude and scope of a price hike would be diminished if non-OPEC or domestic production were greatly expanded

  13. The Limits of Water Pricing in a Developing Country Metropolis: Empirical Lessons from an Industrial City of Pakistan

    Directory of Open Access Journals (Sweden)

    Shabbir Ahmad

    2017-07-01

    Full Text Available This paper seeks to question the effectiveness of water pricing as a means of consumer behavioural change in urban centres of the Global South by analysing the domestic usage for water in a major industrial city of Pakistan. Using survey data of 1100 households from Faisalabad city, we estimate the price and income elasticities of water demand. Instrumental variable methods are applied to overcome the endogeneity issues of water pricing. The findings reflect that price and income elasticities vary across different groups. Price elasticities range from −0.43 to −0.71, and income elasticities vary between 0.01 and 0.12. These findings suggest that pricing policies may have limited scope to drive households’ water consumption patterns. However, these empirics may suggest that policy makers should design an appropriate tariff structure to increase revenues that can be invested to further improve the existing water infrastructure. The study findings also suggest that non-pricing instruments, such as water saving campaigns, may be helpful in driving an efficient use of water in rapidly growing cities in the developing world.

  14. Free and Reduced-Price Meal Application and Income Verification Practices in School Nutrition Programs in the United States

    Science.gov (United States)

    Kwon, Junehee; Lee, Yee Ming; Park, Eunhye; Wang, Yujia; Rushing, Keith

    2017-01-01

    Purpose/Objectives: This study assessed current practices and attitudes of school nutrition program (SNP) management staff regarding free and reduced-price (F-RP) meal application and verification in SNPs. Methods: Stratified, randomly selected 1,500 SNP management staff in 14 states received a link to an online questionnaire and/or a printed…

  15. Light-duty vehicle fuel economy improvements, 1979--1998: A consumer purchase model of corporate average fuel economy, fuel price, and income effects

    Science.gov (United States)

    Chien, David Michael

    2000-10-01

    The Energy Policy and Conservation Act of 1975, which created fuel economy standards for automobiles and light trucks, was passed by Congress in response to the rapid rise in world oil prices as a result of the 1973 oil crisis. The standards were first implemented in 1978 for automobiles and 1979 for light trucks, and began with initial standards of 18 MPG for automobiles and 17.2 MPG for light trucks. The current fuel economy standards for 1998 have been held constant at 27.5 MPG for automobiles and 20.5 MPG for light trucks since 1990--1991. While actual new automobile fuel economy has almost doubled from 14 MPG in 1974 to 27.2 MPG in 1994, it is reasonable to ask if the CAFE standards are still needed. Each year Congress attempts to pass another increase in the Corporate Average Fuel Economy (CAFE) standard and fails. Many have called for the abolition of CAFE standards citing the ineffectiveness of the standards in the past. In order to determine whether CAFE standards should be increased, held constant, or repealed, an evaluation of the effectiveness of the CAFE standards to date must be established. Because fuel prices were rising concurrently with the CAFE standards, many authors have attributed the rapid rise in new car fuel economy solely to fuel prices. The purpose of this dissertation is to re-examine the determinants of new car fuel economy via three effects: CAFE regulations, fuel price, and income effects. By measuring the marginal effects of the three fuel economy determinants upon consumers and manufacturers choices, for fuel economy, an estimate was made of the influence of each upon new fuel economy. The conclusions of this dissertation present some clear signals to policymakers: CAFE standards have been very effective in increasing fuel economy from 1979 to 1998. Furthermore, they have been the main cause of fuel economy improvement, with income being a much smaller component. Furthermore, this dissertation has suggested that fuel prices have

  16. The Big Drink Debate: perceptions of the impact of price on alcohol consumption from a large scale cross-sectional convenience survey in north west England

    Directory of Open Access Journals (Sweden)

    Briant Linford

    2011-08-01

    Full Text Available Abstract Background A large-scale survey was conducted in 2008 in north west England, a region with high levels of alcohol-related harm, during a regional 'Big Drink Debate' campaign. The aim of this paper is to explore perceptions of how alcohol consumption would change if alcohol prices were to increase or decrease. Methods A convenience survey of residents (≥ 18 years of north west England measured demographics, income, alcohol consumption in previous week, and opinions on drinking behaviour under two pricing conditions: low prices and discounts and increased alcohol prices (either 'decrease', 'no change' or 'increase'. Multinomial logistic regression used three outcomes: 'completely elastic' (consider that lower prices increase drinking and higher prices decrease drinking; 'lower price elastic' (lower prices increase drinking, higher prices have no effect; and 'price inelastic' (no change for either. Results Of 22,780 drinkers surveyed, 80.3% considered lower alcohol prices and discounts would increase alcohol consumption, while 22.1% thought raising prices would decrease consumption, making lower price elasticity only (i.e. lower prices increase drinking, higher prices have no effect the most common outcome (62%. Compared to a high income/high drinking category, the lightest drinkers with a low income (adjusted odds ratio AOR = 1.78, 95% confidence intervals CI 1.38-2.30 or medium income (AOR = 1.88, CI 1.47-2.41 were most likely to be lower price elastic. Females were more likely than males to be lower price elastic (65% vs 57% while the reverse was true for complete elasticity (20% vs 26%, P Conclusions Lower pricing increases alcohol consumption, and the alcohol industry's continued focus on discounting sales encourages higher drinking levels. International evidence suggests increasing the price of alcohol reduces consumption, and one in five of the surveyed population agreed; more work is required to increase this agreement to achieve

  17. Price Sensitivity of Demand for Prescription Drugs: Exploiting a Regression Kink Design

    DEFF Research Database (Denmark)

    Simonsen, Marianne; Skipper, Lars; Skipper, Niels

    This paper investigates price sensitivity of demand for prescription drugs using drug purchase records for at 20% random sample of the Danish population. We identify price responsiveness by exploiting exogenous variation in prices caused by kinked reimbursement schemes and implement a regression ...... education and income are, however, more responsive to the price. Also, essential drugs that prevent deterioration in health and prolong life have lower associated average price sensitivity....... kink design. Thus, within a unifying framework we uncover price sensitivity for different subpopulations and types of drugs. The results suggest low average price responsiveness with corresponding price elasticities ranging from -0.08 to -0.25, implying that demand is inelastic. Individuals with lower...

  18. Elasticity of energy consumption

    International Nuclear Information System (INIS)

    Stam, M.

    2004-01-01

    Insight is given into the price elasticities of several energy carriers. Next, attention is paid to the impact of the discussion on changes of the Regulating Energy Levy (REB, abbreviated in Dutch) in the Netherlands [nl

  19. The impacts of energy prices on energy intensity: Evidence from China

    International Nuclear Information System (INIS)

    Hang, Leiming; Tu, Meizeng

    2007-01-01

    In this paper, we present a review of the deregulation of energy prices in China between 1985 and 2004 and assess the impacts of changes in energy prices on aggregate energy intensity and coal/oil/electricity intensity. We used time series data to provide estimates of energy price elasticities. Empirical results showed that: (1) The own-price elasticities of coal, oil, and aggregate energy were negative in periods both before and after 1995, implying that higher relative prices of different energy types lead to the decrease in coal, oil, and aggregate energy intensities. However, the positive own-price elasticity of electricity after 1995 probably indicates that the price effect was weaker than other factors such as income effect and population effect. (2) The impacts of energy prices were asymmetric over time. (3) Sectoral adjustment also drove the decrease in aggregate energy intensity. Although raising energy prices to boost efficiency of energy use seems to be an effective policy tool, other policy implications concerned with energy prices, such as energy supply security and fuel poverty, must also be considered

  20. The income elasticity of Willingness-To-Pay (WTP) revisited: A meta-analysis of studies for restoring Good Ecological Status (GES) of water bodies under the Water Framework Directive (WFD).

    Science.gov (United States)

    Tyllianakis, Emmanouil; Skuras, Dimitris

    2016-11-01

    The income elasticity of Willingness-To-Pay (WTP) is ambiguous and results from meta-analyses are disparate. This may be because the environmental good or service to be valued is very broadly defined or because the income measured in individual studies suffers from extensive non-reporting or miss reporting. The present study carries out a meta-analysis of WTP to restore Good Ecological Status (GES) under the Water Framework Directive (WFD). This environmental service is narrowly defined and its aims and objectives are commonly understood among the members of the scientific community. Besides income reported by the individual studies, wealth and income indicators collected by Eurostat for the geographic entities covered by the individual studies are used. Meta-regression analyses show that income is statistically significant, explains a substantial proportion of WTP variability and its elasticity is considerable in magnitude ranging from 0.6 to almost 1.7. Results are robust to variations in the sample of the individual studies participating in the meta-analysis, the econometric approach and the function form of the meta-regression. The choice of wealth or income measure is not that important as it is whether this measure is Purchasing Power Parity (PPP) adjusted among the individual studies. Copyright © 2016 Elsevier Ltd. All rights reserved.

  1. Short-Run and Long-Run Elasticities of Diesel Demand in Korea

    Directory of Open Access Journals (Sweden)

    Seung-Hoon Yoo

    2012-11-01

    Full Text Available This paper investigates the demand function for diesel in Korea covering the period 1986–2011. The short-run and long-run elasticities of diesel demand with respect to price and income are empirically examined using a co-integration and error-correction model. The short-run and long-run price elasticities are estimated to be −0.357 and −0.547, respectively. The short-run and long-run income elasticities are computed to be 1.589 and 1.478, respectively. Thus, diesel demand is relatively inelastic to price change and elastic to income change in both the short-run and long-run. Therefore, a demand-side management through raising the price of diesel will be ineffective and tightening the regulation of using diesel more efficiently appears to be more effective in Korea. The demand for diesel is expected to continuously increase as the economy grows.

  2. New estimates of elasticity of demand for healthcare in rural China.

    Science.gov (United States)

    Zhou, Zhongliang; Su, Yanfang; Gao, Jianmin; Xu, Ling; Zhang, Yaoguang

    2011-12-01

    Only limited empirical studies reported own-price elasticity of demand for health care in rural China. Neither research on income elasticity of demand for health care nor cross-price elasticity of demand for inpatient versus outpatient services in rural China has been reported. However, elasticity of demand is informative to evaluate current policy and to guide further policy making. Our study contributes to the literature by estimating three elasticities (i.e., own-price elasticity, cross-price elasticity, and income elasticity of demand for health care based on nationwide-representative data. We aim to answer three empirical questions with regard to health expenditure in rural China: (1) Which service is more sensitive to price change, outpatient or inpatient service? (2) Is outpatient service a substitute or complement to inpatient service? and (3) Does demand for inpatient services grow faster than demand for outpatient services with income growth? Based on data from a National Health Services Survey, a Probit regression model with probability of outpatient visit and probability of inpatient visit as dependent variables and a zero-truncated negative binomial regression model with outpatient visits as dependent variable were constructed to isolate the effects of price and income on demand for health care. Both pooled and separated regressions for 2003 and 2008 were conducted with tests of robustness. Own-price elasticities of demand for first outpatient visit, outpatient visits among users and first inpatient visit are -0.519 [95% confidence interval (-0.703, -0.336)], -0.547 [95% confidence interval (-0.747, -0.347)] and -0.372 [95% confidence interval (-0.517, -0.226)], respectively. Cross-price elasticities of demand for first outpatient visit, outpatient visits among users and first inpatient visit are 0.073 [95% confidence interval (-0.176, 0.322)], 0.308 [95% confidence interval (0.087, 0.528)], and 0.059 [95% confidence interval (-0.085, 0

  3. An analysis of gasoline demand elasticities at the national and local levels in Mexico

    Energy Technology Data Exchange (ETDEWEB)

    Crotte, Amado [Mexican Ministry of Communications and Transport, Mexico City (Mexico); Noland, Robert B. [Alan M. Voorhees Transportation Center, E. J. Bloustein School of Planning and Public Policy, Rutgers University, New Brunswick, NJ 08901 (United States); Graham, Daniel J. [Centre for Transport Studies, Department of Civil and Environmental Engineering, Imperial College London, SW7 2AZ London (United Kingdom)

    2010-08-15

    The majority of evidence on gasoline demand elasticities is derived from models based on national data. Since the largest growth in population is now taking place in cities in the developing world it is important that we understand whether this national evidence is applicable to demand conditions at the local level. The aim of this paper is to estimate and compare gasoline per vehicle demand elasticities at the national and local levels in Mexico. National elasticities with respect to price, income, vehicle stock and metro fares are estimated using both a time series cointegration model and a panel GMM model for Mexican states. Estimates for Mexico City are derived by modifying national estimates according to mode shares as suggested by, and by estimating a panel Within Groups model with data aggregated by borough. Although all models agree on the sign of the elasticities the magnitudes differ greatly. Elasticities change over time and differ between the national and local levels, with smaller price responses in Mexico City. In general, price elasticities are smaller than those reported in the gasoline demand surveys, a pattern previously found in developing countries. The fact that income and vehicle stock elasticities increase over time may suggest that vehicles are being used more intensively in recent years and that Mexico City residents are purchasing larger vehicles. Elasticities with respect to metro fares are negligible, which suggests little substitution between modes. Finally, the fact that fuel efficiency elasticities are smaller than vehicle stock elasticities suggests that vehicle stock size, rather than its composition, has a larger impact on gasoline consumption in Mexico City. (author)

  4. An analysis of gasoline demand elasticities at the national and local levels in Mexico

    International Nuclear Information System (INIS)

    Crotte, Amado; Noland, Robert B.; Graham, Daniel J.

    2010-01-01

    The majority of evidence on gasoline demand elasticities is derived from models based on national data. Since the largest growth in population is now taking place in cities in the developing world it is important that we understand whether this national evidence is applicable to demand conditions at the local level. The aim of this paper is to estimate and compare gasoline per vehicle demand elasticities at the national and local levels in Mexico. National elasticities with respect to price, income, vehicle stock and metro fares are estimated using both a time series cointegration model and a panel GMM model for Mexican states. Estimates for Mexico City are derived by modifying national estimates according to mode shares as suggested by, and by estimating a panel Within Groups model with data aggregated by borough. Although all models agree on the sign of the elasticities the magnitudes differ greatly. Elasticities change over time and differ between the national and local levels, with smaller price responses in Mexico City. In general, price elasticities are smaller than those reported in the gasoline demand surveys, a pattern previously found in developing countries. The fact that income and vehicle stock elasticities increase over time may suggest that vehicles are being used more intensively in recent years and that Mexico City residents are purchasing larger vehicles. Elasticities with respect to metro fares are negligible, which suggests little substitution between modes. Finally, the fact that fuel efficiency elasticities are smaller than vehicle stock elasticities suggests that vehicle stock size, rather than its composition, has a larger impact on gasoline consumption in Mexico City. (author)

  5. Differential Responses to Food Price Changes by Personal Characteristic: A Systematic Review of Experimental Studies.

    Science.gov (United States)

    Mizdrak, Anja; Scarborough, Peter; Waterlander, Wilma E; Rayner, Mike

    2015-01-01

    Fiscal interventions to improve population diet have been recommended for consideration by many organisations including the World Health Organisation and the United Nations and policies such as sugar-sweetened beverage taxes have been implemented at national and sub-national levels. However, concerns have been raised with respect to the differential impact of fiscal interventions on population sub-groups and this remains a barrier to implementation. To examine how personal characteristics (such as socioeconomic status, sex, impulsivity, and income) moderate changes in purchases of targeted foods in response to food and beverage price changes in experimental settings. Systematic review. Online databases (PubMed, EMBASE, Web of Science, EconLit and PsycInfo), reference lists of previous reviews, and additional data from study authors. We included randomised controlled trials where food and beverage prices were manipulated and reported differential effects of the intervention on participant sub-groups defined according to personal characteristics. Where possible, we extracted data to enable the calculation of price elasticities for the target foods by personal characteristic. 8 studies were included in the review. Across studies, the difference in price elasticity varied from 0.02 to 2.43 between groups within the same study. 11 out of the total of 18 comparisons of own-price elasticity estimates by personal characteristic differed by more than 0.2 between groups. Income related factors were the most commonly considered and there was an indication that own-price elasticity estimates do vary by income but the direction of this effect was not clear. Experimental studies provide an opportunity to examine the differential effects of fiscal measures to improve population diets. Patterns in price sensitivity by personal characteristics are complex. General conclusions pertaining to the effects of personal characteristics on price sensitivity are not supported by the

  6. When Do Price Thresholds Matter in Retail Categories?

    OpenAIRE

    Koen Pauwels; Shuba Srinivasan; Philip Hans Franses

    2007-01-01

    Marketing literature has long recognized that brand price elasticity need not be monotonic and symmetric, but has yet to provide generalizable market-level insights on threshold-based price elasticity, asymmetric thresholds, and the sign and magnitude of elasticity transitions. This paper introduces smooth transition regression models to study threshold-based price elasticity of the top 4 brands across 20 fast-moving consumer good categories. Threshold-based price elasticity is found for 76% ...

  7. When do price thresholds matter in retail categories?

    OpenAIRE

    Pauwels, Koen; Srinivasan, Shuba; Franses, Philip Hans

    2007-01-01

    textabstractMarketing literature has long recognized that brand price elasticity need not be monotonic and symmetric, but has yet to provide generalizable market-level insights on threshold-based price elasticity, asymmetric thresholds, and the sign and magnitude of elasticity transitions. This paper introduces smooth transition regression models to study threshold-based price elasticity of the top 4 brands across 20 fast-moving consumer good categories. Threshold-based price elasticity is fo...

  8. Household demand elasticities for meat products in Uruguay

    Energy Technology Data Exchange (ETDEWEB)

    Lanfranco, B. A.; Rava, C.

    2014-06-01

    This article analyzed the demand for meats at household level over the past decade in Uruguay, a country that exhibits a very high per capita consumption of these products. In particular, the consumption of beef is one of the highest in the world and only comparable to Argentina. The analysis involved a two-step estimation of an incomplete system of censored demand equations using household data from the last available national income and expenditure survey (2005/06). Thirteen meat products were included in the analysis: six broad beef products (de boned hindquarter cuts, bone-in hindquarter cuts, ground beef, rib plate, bone-in forequarter cuts, and other beef cuts), four products from other meats (sheep, pork, poultry, and fish), and three generic mixed-meat products. A complete set of short-term income, own-price and cross-price elasticities were computed and reported along with their 90% confidence intervals (CI). The results were consistent with both economic theory and empirical evidence as well as with the expected behavior, considering the relevance of these products, particularly beef, in the diet of Uruguayan consumers. All meat items were necessary goods and evidenced income-inelastic responses, which was expected given their high consumption level. All meats behaved as normal goods although exhibiting different reactions to changes in price. In general, beef cuts were more price elastic than other more broadly defined products. The more specific and dis aggregated the meat product the higher its corresponding direct price elasticity. The complement/substitute relationships found in this study were highly depended on the specific product combinations. (Author)

  9. Household demand elasticities for meat products in Uruguay

    Directory of Open Access Journals (Sweden)

    Bruno A. Lanfranco

    2014-01-01

    Full Text Available This article analyzed the demand for meats at household level over the past decade in Uruguay, a country that exhibits a very high per capita consumption of these products. In particular, the consumption of beef is one of the highest in the world and only comparable to Argentina. The analysis involved a two-step estimation of an incomplete system of censored demand equations using household data from the last available national income and expenditure survey (2005/06. Thirteen meat products were included in the analysis: six broad beef products (deboned hindquarter cuts, bone-in hindquarter cuts, ground beef, rib plate, bone-in forequarter cuts, and other beef cuts, four products from other meats (sheep, pork, poultry, and fish, and three generic mixed-meat products. A complete set of short-term income, own-price and cross-price elasticities were computed and reported along with their 90% confidence intervals (CI. The results were consistent with both economic theory and empirical evidence as well as with the expected behavior, considering the relevance of these products, particularly beef, in the diet of Uruguayan consumers. All meat items were necessary goods and evidenced income-inelastic responses, which was expected given their high consumption level. All meats behaved as normal goods although exhibiting different reactions to changes in price. In general, beef cuts were more price elastic than other more broadly defined products. The more specific and disaggregated the meat product the higher its corresponding direct price elasticity. The complement/substitute relationships found in this study were highly depended on the specific product combinations.

  10. The effects of price and perceived quality on the behavioural economics of alcohol, amphetamine, cannabis, cocaine, and ecstasy purchases.

    Science.gov (United States)

    Goudie, Andrew J; Sumnall, Harry R; Field, Matt; Clayton, Hannah; Cole, Jon C

    2007-07-10

    Behavioural economic models of substance use describe the relationship between changes in unit price and consumption. However, these models rarely take account of the perceived quality (i.e. potency) of controlled drugs. Therefore we investigated the effects of both price and quality on the decision to purchase controlled drugs by polysubstance misusers. Forty current polysubstance misusers (29 males, 11 females; mean age 23.8) were recruited into the study. Participants were asked to hypothetically purchase drugs from a price list of alcohol, amphetamine, cannabis, cocaine and ecstasy at different levels of quality and price (i.e. better quality drugs cost more money). The disposable income available for those purchases was systematically varied in order to determine the impact of income on the decision to purchase drugs. Demand for both normal and strong alcohol was income inelastic. Demand for both poor and average quality cannabis and ecstasy was income inelastic, but demand for good quality cannabis and ecstasy was income elastic. The demand for poor quality cocaine was income inelastic, with the demand for both average and good quality cocaine being income elastic. Participants reported too few purchases of amphetamine, which precluded behavioural economic analysis. These results suggest that, like other goods, controlled drugs are purchased based upon the consumer's interpretations of their relative value. Therefore, it is probable that the purchase and subsequent use of controlled drugs by polysubstance misusers will be heavily influenced by the economic environment.

  11. Nonlinear Pricing in Energy and Environmental Markets

    Science.gov (United States)

    Ito, Koichiro

    This dissertation consists of three empirical studies on nonlinear pricing in energy and environmental markets. The first investigates how consumers respond to multi-tier nonlinear price schedules for residential electricity. Chapter 2 asks a similar research question for residential water pricing. Finally, I examine the effect of nonlinear financial rewards for energy conservation by applying a regression discontinuity design to a large-scale electricity rebate program that was implemented in California. Economic theory generally assumes that consumers respond to marginal prices when making economic decisions, but this assumption may not hold for complex price schedules. The chapter "Do Consumers Respond to Marginal or Average Price? Evidence from Nonlinear Electricity Pricing" provides empirical evidence that consumers respond to average price rather than marginal price when faced with nonlinear electricity price schedules. Nonlinear price schedules, such as progressive income tax rates and multi-tier electricity prices, complicate economic decisions by creating multiple marginal prices for the same good. Evidence from laboratory experiments suggests that consumers facing such price schedules may respond to average price as a heuristic. I empirically test this prediction using field data by exploiting price variation across a spatial discontinuity in electric utility service areas. The territory border of two electric utilities lies within several city boundaries in southern California. As a result, nearly identical households experience substantially different nonlinear electricity price schedules. Using monthly household-level panel data from 1999 to 2008, I find strong evidence that consumers respond to average price rather than marginal or expected marginal price. I show that even though this sub-optimizing behavior has a minimal impact on individual welfare, it can critically alter the policy implications of nonlinear pricing. The second chapter " How Do

  12. The Effect of Price and Socio-Economic Level on the Consumption of Sugar-Sweetened Beverages (SSB): The Case of Ecuador.

    Science.gov (United States)

    Paraje, Guillermo

    2016-01-01

    The objective of this article is to estimate the own-price, cross-price and income elasticities of demand for SSB in Ecuador, as an indispensable step for predicting a reduction in the consumption of said beverages caused by the potential implementation of taxes in Ecuador. In addition, the own-price, cross-price and income elasticities of sugar-free substitutes like mineral water and diet soft drinks and juices are also estimated. The data from the 2011-2012 ENIGHUR, which contains detailed information on household consumption and socioeconomic variables, was used. The estimates are done using Deaton's Almost Ideal Demand System (AIDS) which accounts for differences in the quality of goods purchased. This demand system is estimated for different socio-economic groups, according to total household expenditure. The results reveal own-price elasticities for SSB between -1.17 and -1.33 depending on the socio-economic group, in line with the existing evidence for developed countries. Own-price elasticity for non-SSB is between -1 and -1.24. Income elasticities reveal that both SSB and non-SSB are normal goods with elasticities decreasing for higher socio-economic groups. These results show that the consumption of SSB is sensitive to price changes, meaning that the implementation of taxes on said beverages could be effective in reducing their consumption. The fact that non-SSB are also sensitive to price changes would indicate that subsidies could be implemented for the production of some of them.

  13. Analysis of unity price-elasticity of ‘Gala’ apple’s demand/ Análise de elasticidade preço unitário da demanda de maçã ‘Gala’

    Directory of Open Access Journals (Sweden)

    Rommel Noce

    2004-05-01

    Full Text Available This study was accomplished with the objective of esteeming the value of price of the ‘Gala’ apple in which the total revenue obtained with the commercialization would be maximum. From the demand equation it was possible to analyze the price elasticity and to make inferences on the ‘Gala’ apple commercialization in Brazil.Este estudo foi realizado com o objetivo de estimar o valor de preço da maçã ‘Gala’ no qual a receita total obtida com a comercialização seria máxima. A partir da equação de demanda foi possível analisar a elasticidade de preço e fazer inferências sobre a comercialização de maçã ‘Gala’ no Brasil.

  14. PRICE AND PRICING STRATEGIES

    OpenAIRE

    SUCIU Titus

    2013-01-01

    In individual companies, price is one significant factor in achieving marketing success. In many purchase situations, price can be of great importance to customers. Marketers must establish pricing strategies that are compatible with the rest of the marketing mix. Management should decide whether to charge the same price to all similar buyers of identical quantities of a product (a one-price strategy) or to set different prices (a flexible price strategy). Many organizations, especially retai...

  15. Demand elasticity of oil in Barbados

    Energy Technology Data Exchange (ETDEWEB)

    Moore, Alvon, E-mail: armoore@centralbank.org.bb [Economist, Central Bank of Barbados, Toms Adams Financial Centre, Bridgetown (Barbados)

    2011-06-15

    The importation of oil is a significant component of Barbados' imports, rising from 7% of imports in 1998 to over 20% in 2009. This increase has impacted greatly on the level of foreign reserves. As a price-taker, relying entirely on imported oil for our energy needs could prove a continuous drain on the economy. With a view to formulating an appropriate energy policy for Barbados, this paper analyses the demand for oil using monthly data from 1998 to 2009. The paper estimates the elasticities of demand for oil by employing single equation cointegration approach and comparing the results with countries that rely heavily on imported oil and whose policy objective are to alter their energy structure to rely less on imported oil. The results show that the demand for oil imports is price inelastic in the long run. The consumption of oil is responsive to past consumption, prices, income, electricity consumption and the number of appliances imported in the short-run. A policy framework to reduce the use of oil for electricity consumption via alternative energy sources should be considered and the taxation of oil imports given its elasticity is a good source of revenue. - Highlights: > Demand for oil is price inelastic in the long-run (-0.552). > The relationship between oil demand and income is insignificant in the long run. > As electricity consumption increases by 1%, the demand for oil rises by 1.43%. > Need to determine if investments in alternative sources can offset demand for oil. > Investment in alternative resources may be required before gains are realised.

  16. Demand elasticity of oil in Barbados

    International Nuclear Information System (INIS)

    Moore, Alvon

    2011-01-01

    The importation of oil is a significant component of Barbados' imports, rising from 7% of imports in 1998 to over 20% in 2009. This increase has impacted greatly on the level of foreign reserves. As a price-taker, relying entirely on imported oil for our energy needs could prove a continuous drain on the economy. With a view to formulating an appropriate energy policy for Barbados, this paper analyses the demand for oil using monthly data from 1998 to 2009. The paper estimates the elasticities of demand for oil by employing single equation cointegration approach and comparing the results with countries that rely heavily on imported oil and whose policy objective are to alter their energy structure to rely less on imported oil. The results show that the demand for oil imports is price inelastic in the long run. The consumption of oil is responsive to past consumption, prices, income, electricity consumption and the number of appliances imported in the short-run. A policy framework to reduce the use of oil for electricity consumption via alternative energy sources should be considered and the taxation of oil imports given its elasticity is a good source of revenue. - Highlights: → Demand for oil is price inelastic in the long-run (-0.552). → The relationship between oil demand and income is insignificant in the long run. → As electricity consumption increases by 1%, the demand for oil rises by 1.43%. → Need to determine if investments in alternative sources can offset demand for oil. → Investment in alternative resources may be required before gains are realised.

  17. Energy consumption and energy prices

    International Nuclear Information System (INIS)

    Bentzen, J.

    1993-01-01

    Data are presented on energy consumption and energy prices related to a number of OECD (Organisation for Economic Co-operation and Development) lands covering the period 1951-1990. The information sources are described and the development of energy consumption and prices in Denmark are illustrated in relation to these other countries. The energy intensity (the relation between energy consumption and the gross national product) is dealt with. Here it is possible to follow development during the whole post-war period. It is generally understood that Denmark saved large amounts of energy after 1973-74 but, taken over the whole post-war period, savings and decline in energy-gross national product relations are less dramatic compared to conditions in other OECD countries. Energy coefficients or elasticities show the relative rise in consumption compared to the relative rise in gross national product (growth rate). This is shown to be typically unstable and an eventual connection with the amount of energy price increase and/or the growth rate of the national economy is considered. Results of Granger causuality tests on energy consumption, national income and energy prices are presented. Effective energy prices were very low in Denmark up to 1970 when they suddenly began to increase. Since the oil crisis Denmark's energy consumption has fallen whereas the other countries have used rather more energy than before. Effective promotion of energy savings must be seen in relation to the fact that the 1970 basis level of energy consumption and intensity was unusually high. The high effective energy prices have also encouraged energy savings in Denmark. (AB)

  18. Economic impact on the Florida economy of energy price spikes

    International Nuclear Information System (INIS)

    Mory, J.F.

    1992-01-01

    A substantial disturbance in oil supplies is likely to generate a large price upsurge and a downturn in the level of economic activity. Each of these two effects diminishes demand by a certain amount. The specific price surge required to reduce demand to the lower level of supply can be calculated with an oil demand function and with empirical estimations of the association between price spikes and declines in economic activity. The first section presents an energy demand model for Florida, which provides the price and income elasticities needed. The second section includes theoretical explanations and empirical estimations of the relationship between price spikes and recessions. Based on historical evidence, it seems that Florida's and the nation's economic systems are very sensitive to oil price surges. As price spikes appear damaging to the economy, it could be expected that reductions in the price of oil are beneficial to the system. That is likely to be the case in the long run, but no empirical evidence of favorable short-term effects of oil price decreases was found. Several possible explanations and theoretical reasons are offered to explain this lack of association. The final section presents estimates of the effect of oil disruptions upon specific industries in Florida and the nation

  19. Prices and Price Setting

    NARCIS (Netherlands)

    R.P. Faber (Riemer)

    2010-01-01

    textabstractThis thesis studies price data and tries to unravel the underlying economic processes of why firms have chosen these prices. It focuses on three aspects of price setting. First, it studies whether the existence of a suggested price has a coordinating effect on the prices of firms.

  20. Why Electricity Demand Is Highly Income-Elastic in Spain: A Cross-Country Comparison Based on an Index-Decomposition Analysis

    Directory of Open Access Journals (Sweden)

    Julián Pérez-García

    2017-03-01

    Full Text Available Since 1990, Spain has had one of the highest elasticities of electricity demand in the European Union. We provide an in-depth analysis into the causes of this high elasticity, and we examine how these same causes influence electricity demand in other European countries. To this end, we present an index-decomposition analysis of growth in electricity demand which allows us to identify three key factors in the relationship between gross domestic product (GDP and electricity demand: (i structural change; (ii GDP growth; and (iii intensity of electricity use. Our findings show that the main differences in electricity demand elasticities across countries and time are accounted for by the fast convergence in residential per capita electricity consumption. This convergence has almost concluded, and we expect the Spanish energy demand elasticity to converge to European standards in the near future.

  1. Intergenerational Top Income Persistence

    DEFF Research Database (Denmark)

    Munk, Martin D.; Bonke, Jens; Hussain, M. Azhar

    2016-01-01

    In this paper, we investigate intergenerational top earnings and top income mobility in Denmark. Access to administrative registers allowed us to look at very small fractions of the population. We find that intergenerational mobility is lower in the top when including capital income in the income...... measure— for the rich top 0.1% fathers and sons the elasticity is 0.466. Compared with Sweden, however, the intergenerational top income persistence is about half the size in Denmark....

  2. Lamb Production Costs: Analyses of Composition and Elasticities Analysis of Lamb Production Costs

    Directory of Open Access Journals (Sweden)

    C. Raineri

    2015-08-01

    Full Text Available Since lamb is a commodity, producers cannot control the price of the product they sell. Therefore, managing production costs is a necessity. We explored the study of elasticities as a tool for basing decision-making in sheep production, and aimed at investigating the composition and elasticities of lamb production costs, and their influence on the performance of the activity. A representative sheep production farm, designed in a panel meeting, was the base for calculation of lamb production cost. We then performed studies of: i costs composition, and ii cost elasticities for prices of inputs and for zootechnical indicators. Variable costs represented 64.15% of total cost, while 21.66% were represented by operational fixed costs, and 14.19% by the income of the factors. As for elasticities to input prices, the opportunity cost of land was the item to which production cost was more sensitive: a 1% increase in its price would cause a 0.2666% increase in lamb cost. Meanwhile, the impact of increasing any technical indicator was significantly higher than the impact of rising input prices. A 1% increase in weight at slaughter, for example, would reduce total cost in 0.91%. The greatest obstacle to economic viability of sheep production under the observed conditions is low technical efficiency. Increased production costs are more related to deficient zootechnical indexes than to high expenses.

  3. Fuel demand elasticities for energy and environmental policies: Indian sample survey evidence

    International Nuclear Information System (INIS)

    Gundimeda, Haripriya; Koehlin, Gunnar

    2008-01-01

    India has been running large-scale interventions in the energy sector over the last decades. Still, there is a dearth of reliable and readily available price and income elasticities of demand to base these on, especially for domestic use of traditional fuels. This study uses the linear approximate Almost Ideal Demand System (LA-AIDS) using micro data of more than 100,000 households sampled across India. The LA-AIDS model is expanded by specifying the intercept as a linear function of household characteristics. Marshallian and Hicksian price and expenditure elasticities of demand for four main fuels are estimated for both urban and rural areas by different income groups. These can be used to evaluate recent and current energy policies. The results can also be used for energy projections and carbon dioxide simulations given different growth rates for different segments of the Indian population. (author)

  4. Inferred demand and supply elasticities from a comparison of world oil models

    International Nuclear Information System (INIS)

    Huntington, H.G.

    1992-01-01

    This paper summarizes the responses of oil supply and demand to prices and income in 11 world oil models that were compared in a recent Energy Modeling Forum (EMF) study. In May 1989, the EMF commenced a study of international oil supplies and demands (hereafter, EMF-11) to compare alternative perspectives on supply and demand issues and how these developments influence the level and direction of world oil prices. In analysing these issues, the EMF-11 working group relied partly upon results from 11 world oil models, using standardized assumptions about oil prices and gross domestic product (GDP). During the study, inferred price elasticities of supply and demand were derived from a comparison of results across different oil price scenarios with the same GDP growth path. Inferred income elasticities of demand were derived from a comparison of results across different economic growth scenarios with the same oil price-path. Together, these estimates summarize several important relationships for understanding oil markets. The first section provides some background on the EMF study and on general trends in the scenarios of interest that help to understand the results. Following sections explain the derivation and qualifications of the inferred estimates, report the results and summarize the key conclusions. (author)

  5. Effects of price and availability on abortion demand.

    Science.gov (United States)

    Gohmann, S F; Ohsfeldt, R L

    1993-10-01

    This study explained the variation in US state abortion demand due to the price of services, the net of insurance cost of birth services, the ability to pay, contraceptive use, individual attitudes regarding abortion, and government policy affecting cost of benefits of terminating an unintended pregnancy or of carrying to birth. The empirical model uses pooled data from 48 states for 1982, 1984, 1985, and 1987. Prices are deflated to 1977 dollars. Another two-staged least squares model is based on cross-sectional state level data for 1985. The dependent variable is the log of abortion per 1000 pregnancies. Other variables pertain to income, education, labor force, family planning, tax, aid to families with dependent children, religion, and abortion-related measures. The results of the cross-sectional analysis are consistent with Medoff's and Garbacz's findings. The estimated coefficient of per capita income is positive with a point elasticity ranging from 0.62 to 1.0. The model with the most complete specifications has an abortion price elasticity range from -0.75 to -1.3 and is statistically significant when religion measures are excluded. The Hausman test shows the pro-choice variable significantly correlated with the error term. The net price of birth services is not statistically significant. Catholic religion and no religion are only significant when the abortion provider variable is excluded. The suggestion is that the effect of Catholicism is ambiguous. In the pooled analysis, the fixed effects model is used to control for abortion attitudes and other unobserved factors. Abortion demand includes abortion per 1000 pregnancies, the ratio of abortions to pregnancies, and the logarithm of abortions per 1000 pregnancies. Higher income is associated with a higher abortion rate and elasticities of 0.76 and 0.35 and is associated with a higher pregnancy rate. The abortion ratio is found to be elastic with respect to price, and price elasticities are sensitive to

  6. The effect of rising food prices on food consumption: systematic review with meta-regression.

    Science.gov (United States)

    Green, Rosemary; Cornelsen, Laura; Dangour, Alan D; Turner, Rachel; Shankar, Bhavani; Mazzocchi, Mario; Smith, Richard D

    2013-06-17

    To quantify the relation between food prices and the demand for food with specific reference to national and household income levels. Systematic review with meta-regression. Online databases of peer reviewed and grey literature (ISI Web of Science, EconLit, PubMed, Medline, AgEcon, Agricola, Google, Google Scholar, IdeasREPEC, Eldis, USAID, United Nations Food and Agriculture Organization, World Bank, International Food Policy Research Institute), hand searched reference lists, and contact with authors. We included cross sectional, cohort, experimental, and quasi-experimental studies with English abstracts. Eligible studies used nationally representative data from 1990 onwards derived from national aggregate data sources, household surveys, or supermarket and home scanners. The primary outcome extracted from relevant papers was the quantification of the demand for foods in response to changes in food price (own price food elasticities). Descriptive and study design variables were extracted for use as covariates in analysis. We conducted meta-regressions to assess the effect of income levels between and within countries on the strength of the relation between food price and demand, and predicted price elasticities adjusted for differences across studies. 136 studies reporting 3495 own price food elasticities from 162 different countries were identified. Our models predict that increases in the price of all foods result in greater reductions in food consumption in poor countries: in low and high income countries, respectively, a 1% increase in the price of cereals results in reductions in consumption of 0.61% (95% confidence interval 0.56% to 0.66%) and 0.43% (0.36% to 0.48%), and a 1% increase in the price of meat results in reductions in consumption of 0.78% (0.73% to 0.83%) and 0.60% (0.54% to 0.66%). Within all countries, our models predict that poorer households will be the most adversely affected by increases in food prices. Changes in global food prices will

  7. Implementing differential pricing for essential medicines via country-specific bilateral negotiated discounts.

    Science.gov (United States)

    Tetteh, Ebenezer Kwabena

    2009-01-01

    It is widely acknowledged that limited access to essential medicines undermines efforts at improving the health and economic well-being of low-income populations. This has spurred on a number of solutions, including differential pricing based on the economics of price discrimination. A desirable feature of differential pricing is its potential ability to reconcile static and dynamic efficiency concerns. There are, however, various shades of differential pricing and this paper aims to evaluate their consistency with economic theory. Starting with the report of the workshop on 'Differential Pricing and Financing of Essential Drugs' held by secretariats of the World Trade Organization and WHO in Hosbjor, Norway, in 2001, this paper takes issue with how differential pricing has been defined as a tool for improving access to essential drug benefits. The paper notes that inadequate attention has been given to policies and institutional arrangements for creating, expressing and maintaining 'truly' price-elastic demands in low-income nations and for segmenting markets. In addition, considerations of equity and solidarity have distracted policy advocates from balancing conflicting, yet well intended, views and general rules. The paper argues why differential pricing should be implemented via country-specific bilateral negotiated discounts. It maintains that it is feasible to muster an environment conducive to profitable differential pricing whilst satisfying general rules and concerns about self-reliance, transparency, accountability, equity and solidarity.

  8. The Morishima Gross elasticity of substitution

    OpenAIRE

    Blackorby, Charles; Primont, Daniel; Russell, R. Robert

    2007-01-01

    We show that the Hotelling-Lau elasticity of substitution, an extension of the Allen-Uzawa elasticity to allow for optimal output-quantity (or utility) responses to changes in factor prices, inherits all of the failings of the Allen-Uzawa elasticity identified by Blackorby and Russell [1989 AER]. An analogous extension of the Morishima elasticity of substitution to allow for output quantity changes preserves the salient properties of the original Hicksian notion of elasticity of substitution.

  9. Are Alcohol Taxation and Pricing Policies Regressive? Product-Level Effects of a Specific Tax and a Minimum Unit Price for Alcohol.

    Science.gov (United States)

    Vandenberg, Brian; Sharma, Anurag

    2016-07-01

    To compare estimated effects of two policy alternatives, (i) a minimum unit price (MUP) for alcohol and (ii) specific (per-unit) taxation, upon current product prices, per capita spending (A$), and per capita consumption by income quintile, consumption quintile and product type. Estimation of baseline spending and consumption, and modelling policy-to-price and price-to-consumption effects of policy changes using scanner data from a panel of demographically representative Australian households that includes product-level details of their off-trade alcohol spending (n = 885; total observations = 12,505). Robustness checks include alternative price elasticities, tax rates, minimum price thresholds and tax pass-through rates. Current alcohol taxes and alternative taxation and pricing policies are not highly regressive. Any regressive effects are small and concentrated among heavy consumers. The lowest-income consumers currently spend a larger proportion of income (2.3%) on alcohol taxes than the highest-income consumers (0.3%), but the mean amount is small in magnitude [A$5.50 per week (95%CI: 5.18-5.88)]. Both a MUP and specific taxation will have some regressive effects, but the effects are limited, as they are greatest for the heaviest consumers, irrespective of income. Among the policy alternatives, a MUP is more effective in reducing consumption than specific taxation, especially for consumers in the lowest-income quintile: an estimated mean per capita reduction of 11.9 standard drinks per week (95%CI: 11.3-12.6). Policies that increase the cost of the cheapest alcohol can be effective in reducing alcohol consumption, without having highly regressive effects. © The Author 2015. Medical Council on Alcohol and Oxford University Press. All rights reserved.

  10. Developments in Global Food Prices

    OpenAIRE

    Vanessa Rayner; Emily Laing; Jamie Hall

    2011-01-01

    Global food prices have increased significantly since the early 2000s, reversing the long-run trend decline in relative food prices over previous decades. A range of supply disruptions in key food-producing countries have contributed to higher food prices, along with strong demand from developing countries as per capita incomes rise and consumption patterns change. Rising commodity prices are leading to higher headline consumer price inflation in many countries though, at this stage, core mea...

  11. Oil prices, nuclear energy consumption, and economic growth: New evidence using a heterogeneous panel analysis

    International Nuclear Information System (INIS)

    Lee, Chien-Chiang; Chiu, Yi-Bin

    2011-01-01

    This paper applies panel data analysis to examine the short-run dynamics and long-run equilibrium relationships among nuclear energy consumption, oil prices, oil consumption, and economic growth for developed countries covering the period 1971-2006. The panel cointegration results show that in the long run, oil prices have a positive impact on nuclear energy consumption, suggesting the existence of the substitution relationship between nuclear energy and oil. The long-run elasticity of nuclear energy with respect to real income is approximately 0.89, and real income has a greater impact on nuclear energy than do oil prices in the long run. Furthermore, the panel causality results find evidence of unidirectional causality running from oil prices and economic growth to nuclear energy consumption in the long run, while there is no causality between nuclear energy consumption and economic growth in the short run. - Research highlights: → We examine the relationship among nuclear energy consumption, oil prices, oil consumption, and economic growth for developed countries. → The existence of the substitution relationship between nuclear energy and oil. → Real income has a greater impact on nuclear energy than do oil prices in the long run. → An unidirectional causality running from oil prices and economic growth to nuclear energy consumption in the long run.

  12. Estimating elasticities of demand for natural gas in the European household sector

    Energy Technology Data Exchange (ETDEWEB)

    Nilsen, Odd Bjarte; Asche, Frank; Tveteras, Ragnar

    2005-12-15

    This paper analyzes the residential natural gas demand in 12 European countries using a dynamic loglinear demand model, which allows for country-specific elasticity estimates in the short-run and long run. The explanatory variables include a heating degree days index, real prices of natural gas, light fuel oil, electricity, and real private income per capita. Our data set is a country panel with annual observations from 1978 to 2002. Short panel data sets like this represents a challenge for econometric estimation, as standard estimators often provide implausible estimates of elasticities. The demand model is estimated using both homogeneous and heterogeneous estimators, with a particular focus on the shrinkage estimator (an empirical Bayes estimator). The shrinkage short-run own-price and income elasticity tend to be very inelastic, but with greater long-run responsiveness. We provide support for employing a heterogeneous estimator such as the shrinkage estimator. But the empirical results also motivate a further scrutiny of its properties. We also consider the problem of reporting t-statistics of shrinkage estimators in the empirical Bayes (EB) framework and the problem of using the delta method to approximate the elasticities. The delta method biases upward the t-statistics of the shrinkage elasticities. An alternative approach, the bootstrap sampling methods obtained more reliable confidence intervals. We call into question - is the traditional way of constructing confidence intervals or t-statistics of the shrinkage estimator to naive. (Author)

  13. Is the Armington Elasticity Really Constant across Importers?

    OpenAIRE

    Yilmazkuday, Hakan

    2009-01-01

    This paper shows that the Armington elasticity, which refers to both the elasticity of substitution across goods and the price elasticity of demand under the assumption of a large number of varieties, systematically changes from one importer country to another in an international trade context. Then a natural question to ask is "What determines the Armington elasticity?" The answer comes from the distinction between the elasticity of demand with respect to the destination price (i.e., the Arm...

  14. Price Sensitivity of Demand for Prescription Drugs

    DEFF Research Database (Denmark)

    Simonsen, Marianne; Skipper, Lars; Skipper, Niels

    2016-01-01

    We investigate price sensitivity of demand for prescription drugs, using drug purchase records for the entire Danish population. We identify price responsiveness by exploiting variation in prices caused by kinked reimbursement schemes and implement a regression kink design. The results suggest some...... price responsiveness with corresponding price elasticities ranging from −0.2 to −0.7. Individuals with chronic disease and especially individuals above the age of 65 respond less to the price of drugs....

  15. House Prices and Taxes

    DEFF Research Database (Denmark)

    Gjedsted Nielsen, Mads

    This paper is the first to consider a large scale natural experiment to estimate the effect of taxes on house prices. We find that a 1 percentage-point increase in income tax rates lead to a drop in house prices of at most 2.2%. This corresponds to a tax capitalization for the average household...... capitalization from earlier studies. Furthermore, we find no effect of property taxes on house prices. We attribute this to the low levels of Danish municipal property tax rates compared to income tax rates....

  16. Consumer food choices: the role of price and pricing strategies.

    Science.gov (United States)

    Steenhuis, Ingrid H M; Waterlander, Wilma E; de Mul, Anika

    2011-12-01

    To study differences in the role of price and value in food choice between low-income and higher-income consumers and to study the perception of consumers about pricing strategies that are of relevance during grocery shopping. A cross-sectional study was conducted using structured, written questionnaires. Food choice motives as well as price perceptions and opinion on pricing strategies were measured. The study was carried out in point-of-purchase settings, i.e. supermarkets, fast-food restaurants and sports canteens. Adults (n 159) visiting a point-of-purchase setting were included. Price is an important factor in food choice, especially for low-income consumers. Low-income consumers were significantly more conscious of value and price than higher-income consumers. The most attractive strategies, according to the consumers, were discounting healthy food more often and applying a lower VAT (Value Added Tax) rate on healthy food. Low-income consumers differ in their preferences for pricing strategies. Since price is more important for low-income consumers we recommend mainly focusing on their preferences and needs.

  17. Elasticities of electricity demand in urban Indian households

    International Nuclear Information System (INIS)

    Filippini, Massimo; Pachauri, Shonali

    2004-01-01

    In the past, several electricity demand studies have been published for India based on aggregate macro data at the country or sub-national/state level. Since the underlying theory of consumer demand is based on the behaviour of individual agents, the use of micro data, which reflects individual and household behaviour, more closely, can shed greater light on the nature of consumer responses. In this paper, seasonal price and income elasticities of electricity demand in the residential sector of all urban areas of India are estimated for the first time using disaggregate level survey data for about 30,000 households. Three electricity demand functions have been econometrically estimated using monthly data for the winter, monsoon and summer season in order to understand the extent to which factors like income, prices, household size and other household specific characteristics, influence variations observed in individual households' electricity demand. The results show electricity demand is income and price inelastic in all three seasons, and that household, demographic and geographical variables are significant in determining electricity demand

  18. Price freezes, durables and residential electricity demand - Evidence from the Greater Buenos Aires

    Energy Technology Data Exchange (ETDEWEB)

    Casarin, Ariel; Delfino, Maria Eugenia

    2010-09-15

    This paper examines the determinants of residential electricity demand in the Greater Buenos Aires between 1997 and 2006. During the second half of this period, residential tariffs remained nominally fixed, while an income boom boosted up the sales of durables. This study differs from previous works in that it explicitly considers the impact of the stock of air-conditioners on residential demand. The paper reports short- and long-run elasticities and examines the contribution of prices and durables to recent demand growth. Simulations illustrate the impact of prices and durables on future demand.

  19. Price elastic power consumption as reserve power - a demonstration in the horticultural sector. Final report; Priselastisk elforbrug som reservekraft - et demonstrationsprojekt i gartneribranchen. Slutrapport

    Energy Technology Data Exchange (ETDEWEB)

    NONE

    2012-11-01

    Danish greenhouses have a relatively high level of electricity consumption for plant growth lighting. Part of the electricity consumption is flexible, and the main purpose of the project was to find out if the plant growth lighting of the greenhouses is fit for the market for reserve power. The greenhouses' total potential for delivery of upgrading services was up to 80 MW for a short period in spring 2007. Four greenhouses participated in practise on the regulating power market with a flexible consumption. The upscaling of the demonstration was not carried through because e.g. the price development on the regulating power market reduced the gain considerably, and the investments for installation of on-line metering at the greenhouses did not measure up with the earnings. (Author)

  20. Renewable energy consumption and income in emerging economies

    International Nuclear Information System (INIS)

    Sadorsky, Perry

    2009-01-01

    Increased economic growth and demand for energy in emerging economies is creating an opportunity for these countries to increase their usage of renewable energy. This paper presents and estimates two empirical models of renewable energy consumption and income for a panel of emerging economies. Panel cointegration estimates show that increases in real per capita income have a positive and statistically significant impact on per capita renewable energy consumption. In the long term, a 1% increase in real income per capita increases the consumption of renewable energy per capita in emerging economies by approximately 3.5%. Long-term renewable energy per capita consumption price elasticity estimates are approximately equal to -0.70.

  1. Investor response to consumer elasticity

    International Nuclear Information System (INIS)

    Grenaa Jensen, Stine; Meibom, Peter; Ravn, H.F.; Straarup, Sarah

    2004-01-01

    In the Nordic electricity system there is considerable uncertainty with respect to the long-term development in production capacity. The process towards liberalisation of the electricity sector started in a situation with a large reserve margin, but this margin is gradually vanishing. Since the potential investors in new production capacity are unaccustomed with investments under the new regime it is unknown if and when investments will take place. The electricity price is the key market signal to potential investors. The price is settled as a balance between supply and demand, and it is generally assumed that the demand side has an important role in this, and increasingly so. However, since consumers have not earlier had the incentive to respond to electricity prices, no reliable estimate of demand elasticity is known. The purpose of the present study is to analyse the role of electricity demand elasticity for investments in new electricity production capacity. Electricity price scenarios generated with a partial equilibrium model (Balmorel) are combined with a model of investment decisions. In this, various scenarios concerning the development in the demand elasticity are used. The simulated investment decisions are taken in a stochastic, dynamic setting, where a key point is the timing of the investment decision in relation to the gathering of new information relative to the stochastic elements. Based on this, the consequences of the development in consumer price elasticity for investments in a base load and a peak load plant are investigated. The main result of the analysis is that peak load investments can be made unprofitable by the development in consumer price elasticity, such that an investor will tend to wait with his peak load investment, until the development in consumer price elasticity has been revealed. (au)

  2. Quasi-experimental taxation elasticities of US gasoline demand

    International Nuclear Information System (INIS)

    Goel, R.K.

    1994-01-01

    Taxation elasticities provide inputs in public policy aimed at raising revenues. Using the quasi-experimental method, this paper calculates gasoline taxation elasticities for the USA over 1952-86. The medium (mean) elasticity over this period is found to be -0.075 (-0.122). However, the elasticity following the oil shock of 1973 is found to be statistically different from the pre-shock elasticity. Reasons for this change in elasticity are discussed. The implication of this analysis is that tax policies based on price elasticities, rather than on tax elasticities, might be using an inappropriate elasticity estimate and consequently misinterpreting the government's ability to raise tax revenues. (author)

  3. Domestic Price, (Expected) Foreign Price, and Travel Spending by Canadians in the United States

    OpenAIRE

    Jan Vilasuso; Fredric C. Menz

    1998-01-01

    In this paper, the authors develop and test a model to explain travel expenditures in the United States by Canadians. The model examines a consumer's choice problem where income is allocated between domestic and foreign consumption. Consumers do not know the foreign price level and base their spending in part on expected foreign price. In addition to expected foreign price, domestic price, exchange rates, income, and foreign price uncertainty influence travel spending. Empirically, each deter...

  4. Energy pricing policy in Iran

    International Nuclear Information System (INIS)

    Davood Manzoor

    1995-01-01

    Low energy prices in Iran do not reflect economic costs. Further distortions exist in the tariff structures of most energy sources and in their relative prices. Price reform is a key policy element for achieving increased energy conservation and economic substitution. Subsidies should be made transparent and explained by the Government, and, when eliminated, they could be compensated by target measures or direct subsidies for low income households. Price reforms are under way, with some caution though, because of possible political and inflationary consequences. In order to better understand the need for price reforms a brief analysis of the current energy pricing policy is provided there. (author)

  5. Analysis of thermal coal pricing and the coal price distortion in China from the perspective of market forces

    International Nuclear Information System (INIS)

    Cui, Herui; Wei, Pengbang

    2017-01-01

    The price of thermal coal has always been the focus of the debate between coal mining industry and electric power industry. The thermal coal price is always lower than other same quality coal, and this phenomenon of thermal coal price distortion has been existing in China for a long time. The distortion coal price can not reflect the external cost and the resource scarcity of coal, which could result in environment deteriorating and inefficient resource allocation. This paper studied the phenomenon of thermal coal price distortion through economic theoretical modeling and empirical cointegration analysis from the perspective of market forces. The results show that thermal coal price is determined by electricity price, the prediction elasticity of a electricity enterprise, price elasticity of demand of electricity, the input prediction elasticity of a electricity enterprise and the price elasticity of supply of thermal coal. The main reason of coal price distortion is the unbalance market force of coal industry and thermal coal generation industry. The distortion rate of coal price is positively related to the market force of electric power industry and negatively related to the industrial concentration of coal industry. - Highlights: • This paper studied thermal coal pricing and the coal price distortion in China. • The main reason of coal price distortion is the unbalance market force. • Thermal coal price is also influenced by electricity price and price elasticity of demand of electricity. • The distortion rate of coal price is negatively related to the industrial concentration of coal industry.

  6. When do price thresholds matter in retail categories?

    NARCIS (Netherlands)

    K.H. Pauwels (Koen); S. Srinivasan (Shuba); Ph.H.B.F. Franses (Philip Hans)

    2007-01-01

    textabstractMarketing literature has long recognized that brand price elasticity need not be monotonic and symmetric, but has yet to provide generalizable market-level insights on threshold-based price elasticity, asymmetric thresholds, and the sign and magnitude of elasticity transitions. This

  7. A survey of oil product demand elasticities for developing countries

    International Nuclear Information System (INIS)

    Dahl, Carol

    1994-01-01

    As more and more developing countries join the ranks of the rich they will consume both more oil and higher percentage of the lighter products. To satisfy this growing demand oil production and refinery capacity that can provide the right quantity and mix of products must be developed. In a companion piece, Dahl (1993) found the total demand for oil to be price inelastic (-0.34) and income elastic (1.32) These elasticities can give information on the total quantity of oil that might be demanded, the total amount of distillation capacity that might be needed and the overall increases in product prices that might be necessary to choke off demand growth. However, with this overall growth in product demand, the more the shift towards the lighter portion of the barrel, the more complex the refinery and the greater the demand for downstream capital. To provide information on this mix in developing countries in the coming years, this paper surveys the available work on econometric demand elasticities by oil product. (author)

  8. Asset Pricing and Monetary Policy

    OpenAIRE

    Bingbing Dong

    2014-01-01

    This paper examines the role of money in understanding the behavior of asset prices and whether and how monetary policy should react to asset prices such as stock prices and equity premiums. To do so, I introduce money via the form of transaction cost into a production economy with limited stock market participation where agents with lower inter-temporal elasticity of substitution (IES), called non-stockholders, have no access to stock market. In addition to facilitating transactions of consu...

  9. Testing and estimating time-varying elasticities of Swiss gasoline demand

    International Nuclear Information System (INIS)

    Neto, David

    2012-01-01

    This paper is intended to test and estimate time-varying elasticities for gasoline demand in Switzerland. For this purpose, a smooth time-varying cointegrating parameters model is investigated in order to describe smooth mutations of the Swiss gasoline demand. The methodology, based on Chebyshev polynomials, is rigorously outlined. Our empirical finding states that the time-invariance assumption does not hold for long-run price and income elasticities. Furthermore they highlight that gasoline demand passed through some periods of sensitivity and non sensitivity with respect to the price. Our empirical statements are of great importance to assess the performance of a gasoline tax as an instrument for CO 2 reduction policy. Indeed, such an instrument can contribute to reduce emissions of greenhouse gases only if the demand is not fully inelastic with respect to the price. Our results suggest that such a carbon-tax would not be always suitable since the price elasticity is found not stable over time and not always significant.

  10. Accounting for asymmetric price responses and underlying energy demand trends in OECD industrial energy demand

    International Nuclear Information System (INIS)

    Adeyemi, Olutomi I.; Hunt, Lester C.

    2014-01-01

    This paper explores the way technical progress and improvements in energy efficiency are captured when modelling OECD industrial energy demand. The industrial sectors of the developed world involve a number of different practices and processes utilising a range of different technologies. Consequently, given the derived demand nature of energy, it is vital when modelling industrial energy demand that the impact of technical progress is appropriately captured. However, the energy economics literature does not give a clear guide on how this can be achieved; one strand suggests that technical progress is ‘endogenous’ via asymmetric price responses whereas another strand suggests that it is ‘exogenous’. More recently, it has been suggested that potentially there is a role for both ‘endogenous’ technical progress and ‘exogenous’ technical progress and consequently the general model should be specified accordingly. This paper therefore attempts to model OECD industrial energy demand using annual time series data over the period 1962–2010 for 15 OECD countries. Using the Structural Time Series Model framework, the general specifications allow for both asymmetric price responses (for technical progress to impact endogenously) and an underlying energy demand trend (for technical progress and other factors to impact exogenously, but in a non-linear way). The results show that almost all of the preferred models for OECD industrial energy demand incorporate both a stochastic underlying energy demand trend and asymmetric price responses. This gives estimated long-run income elasticities in the range of 0.34 to 0.96; estimated long-run price-maximum elasticities in the range of − 0.06 to − 1.22; estimated long-run price-recovery elasticities in the range of 0.00 to − 0.27; and estimated long-run price-cut elasticities in the range of 0.00 to − 0.18. Furthermore, the analysis suggests that when modelling industrial energy demand there is a place for

  11. Farm-retail price spread for pork in Malaysia

    OpenAIRE

    Tey, (John) Yeong-Sheng; Randy, Stringer; Wendy, Umberger

    2009-01-01

    The price difference between farm and retail levels is called price spread, which is constituted mostly by marketing costs and profits. From the price spread, this paper intends to estimate elasticities of price transmission for pork in Malaysia via different empirical model specifications of markup pricing model. Using data from January 1997 to December 2007, a quantitative analysis of farm-to-retail price spreads was undertaken for pork in Malaysia. It was found that retail price is the onl...

  12. Elasticity and competitiveness of Indonesia’s palm oil export in India market

    Directory of Open Access Journals (Sweden)

    Awan Setya Dewanta

    2016-10-01

    Full Text Available This study examines the elasticity and competitiveness of Indonsia’s palm oil export in the India market, 1990 -2014. The methods used are Error Correction Model (ECM and Revealed Comparative Advantage (RCA approach. The results shows that the price is inelastic in short-term but it is elastic in long-term. The income and exchange rate are elastic in the long-term. There is also a decline in competitiveness in the market India. These findings also demonstrate that palm oil is normal goods and can be easily substituted with the same products of other countries or other vegetable oils. It threatens the Indonesian palm oil competitiveness in the Indian market.

  13. On the variable elasticity of the demand for gasoline; The case of the USA

    Energy Technology Data Exchange (ETDEWEB)

    Yu Hsing (Southeastern Louisiana Univ., Hammond, LA (US). Dept. of Economics)

    1990-04-01

    This paper tests the variable elasticity of the demand for gasoline by applying the well-known Box-Cox extended autoregressive (BCEA) model of Savin and White. This model can simultaneously test for functional form and autocorrelation in a time-series regression. Major findings are the log-linear form chosen a priori in most of previous studies can be rejected in favour of the BCEA model; long-run price elasticities varied from -1.118 in 1973 to -0.290 in 1981; and long-run income elasticities declined consistently from 0.944 in 1960 to 0.452 in 1985. These findings have policy implications for more accurate forecast of gasoline demand, gasoline taxes, energy conservation and others. (author).

  14. Price regions and socio-economic efficiency

    International Nuclear Information System (INIS)

    2001-01-01

    In a market without market power, a system in which each node (small price regions) has its own price most effective. The loss when two nodes are combined into one price region is greater the more elastic the demand and supply curve is in the two regions and the more unequal the impact on the flow across the bottleneck is

  15. Energy consumption and energy R and D in OECD: Perspectives from oil prices and economic growth

    International Nuclear Information System (INIS)

    Leng Wong, Siang; Chia, Wai-Mun; Chang, Youngho

    2013-01-01

    We estimate the short-run and long-run elasticities of various types of energy consumption and energy R and D to changes in oil prices and income of the 20 OECD countries over the period of 1980–2010 using the Nerlove partial adjustment model (NPAM). We find negative income elasticity for coal consumption but positive income elasticity for oil and gas consumption suggesting the importance of economic growth in encouraging the usage of cleaner energy from coal to oil and gas. By introducing time dummies into the regressions, we show that climatic mitigation policies are able to promote the usage of cleaner energies. Through the dynamic linkages between energy consumption and energy R and D, we find that fossil fuel consumption promotes fossil fuel R and D and fossil fuel R and D in turn drives its own consumption. Renewable energy R and D which is more responsive to economic growth reduces fossil fuel consumption and hence fossil fuel R and D. - Highlights: • Economic growth encourages the use of cleaner forms of energy. • Economic growth promotes renewable energy R and D. • Subsidies for renewable energy R and D promote renewable energy consumption. • Fossil fuel R and D promotes fossil fuel consumption in countries with oil reserves. • Oil consumption reduces significantly with higher oil prices

  16. Policy on energy pricing

    Energy Technology Data Exchange (ETDEWEB)

    Webb, M. G.

    1977-10-15

    Some economic principles of energy pricing in a market type economy in which there is consumer sovereignty are discussed. Thus resources will be allocated via the production processes in line with the preferences of consumers as revealed by their purchases of goods and services. Prices play the crucial role of coordinating instruments in this allocative process. It is assumed that all the energy industries are in the public sector. The following topics are discussed: the specification of objectives for the energy sector; marginal cost pricing; problems associated with the measurement of marginal costs; some aspects of the environmental costs associated with energy production and use, and some issues related to time differentiated tariffs; the modification of prices to achieve financial targets; and the use of energy prices to achieve income distribution objectives.

  17. Elastic properties

    International Nuclear Information System (INIS)

    Ledbetter, H.M.

    1983-01-01

    This chapter investigates the following five aspects of engineering-material solid-state elastic constants: general properties, interrelationships, relationships to other physical properties, changes during cooling from ambient to near-zero temperature, and near-zero-temperature behavior. Topics considered include compressibility, bulk modulus, Young's modulus, shear modulus, Poisson's ratio, Hooke's law, elastic-constant measuring methods, thermodynamic potentials, higher-order energy terms, specific heat, thermal expansivity, magnetic materials, structural phase transitions, polymers, composites, textured aggregates, and other-phenomena correlations. Some of the conclusions concerning polycrystalline elastic properties and their temperature dependence are: elastic constants are physical, not mechanical, properties which relate thermodynamically to other physical properties such as specific heat and thermal expansivity; elastic constants at low temperatures are nearly temperature independent, as required by the third law of thermodynamics; and elastic constants can be used to study directional properties of materials, such as textured aggregates and composites

  18. Price Sensitivity of Demand for Prescription Drugs

    DEFF Research Database (Denmark)

    Skipper, Lars; Simonsen, Marianne; Skipper, Niels

    This paper investigates price sensitivity of demand for prescription drugs using drug purchase records for at 20% random sample of the Danish population. We identify price responsiveness by exploiting exogenous variation in prices caused by kinked reimbursement schemes and implement a regression ...... education and income are, however, more responsive to the price. Also, essential drugs that prevent deterioration in health and prolong life have lower associated average price sensitivity....

  19. Elasticidad precio de la demanda y perfil de los usuarios de la parada “Pablo de Olavide" de Metro de Sevilla || Price Elasticity of Demand and Profile of “Pablo de Olavide" Metro Stop's Users of Seville Metro

    Directory of Open Access Journals (Sweden)

    Hernández-Díaz, Alfredo G.

    2014-06-01

    Full Text Available En el presente trabajo mostramos los resultados más relevantes obtenidos en un proceso de encuestación a 300 usuarios de la estación “Pablo de Olavide" del metro de Sevilla. El objetivo del trabajo es doble: por un lado, analizar el perfil del usuario (motivaciones por las que usan el metro, intermodalidad y flujos; mientras que, por otro lado, a partir de las disposiciones a pagar con respecto a posibles incrementos en el precio del servicio, estimamos parcialmente la elasticidad precio de la demanda para esta población objetivo tan concreta. El perfil tan específico de los usuarios de dicha parada así como las características propias del metro de Sevilla explican algunos de los resultados obtenidos esperando ayuden a los gestores y administradores de Metro de Sevilla en la toma de decisiones. || In this paper the most relevant results obtained in a survey conducted by 300 users of the “Pablo de Olavide" Seville metro stop are presented. The aim of the paper is twofold. On the one hand, the user profile is analysed: motivations for using the subway, intermodality and ows, whereas, on the other hand, the price elasticity of demand is partially computed by means of the willingness to pay for that specic user profile. In fact, both the particular user profile and Seville metro's characteristics explain some of the obtained results that hopefully will help managers of Seville Metro in making decisions.

  20. Demand Uncertainty and Price Stabilization

    OpenAIRE

    E. Kwan Choi; Stanley R. Johnson

    1987-01-01

    Price stabilization is an important policy goal of government intervention in competitive markets. These policies are primarily directed at raising producer income and stabilizing market prices at levels acceptable to consumers and producers (Fox 1956, Turnovsky 1978, Newbery and Stiglitz 1979). Many of the stabilization policy results have been developed from the study of agricultural commodity markets. In these markets, prices tend to be highly variable due to uncertain and inelastic supply...

  1. Short-run and long-run elasticities of import demand for crude oil in Turkey

    International Nuclear Information System (INIS)

    Altinay, Galip

    2007-01-01

    The aim of this study is to attempt to estimate the short-run and the long-run elasticities of demand for crude oil in Turkey by the recent autoregressive distributed lag (ARDL) bounds testing approach to cointegration. As a developing country, Turkey meets its growing demand for oil principally by foreign suppliers. Thus, the study focuses on modelling the demand for imported crude oil using annual data covering the period 1980-2005. The bounds test results reveal that a long-run cointegration relationship exists between the crude oil import and the explanatory variables: nominal price and income, but not in the model that includes real price in domestic currency. The long-run parameters are estimated through a long-run static solution of the estimated ARDL model, and then the short-run dynamics are estimated by the error correction model. The estimated models pass the diagnostic tests successfully. The findings reveal that the income and price elasticities of import demand for crude oil are inelastic both in the short run and in the long run

  2. The effect of agricultural price-support policies on interregional and rural-to-urban migration in Korea: 1976-1980.

    Science.gov (United States)

    Shefer, D

    1987-08-01

    The impact of rice price-support policies, designed to increase farmers' income and reduce rural-urban migration in the Republic of Korea, is examined for the period 1976-1980 using a polytomous logistic model. "Our findings revealed that the elasticity of migration with respect to rice yield per origin farm household is positive and is significantly different from zero. The elasticities of migration with respect to rate of urbanization, particularly urban concentration-agglomeration, and population size of the destination are also positive and are significantly different from zero.... Our findings questioned the wisdom of employing rice price price-support programs as a viable policy for reducing interregional and rural-to-urban migration in Korea." excerpt

  3. Are sweet snacks more sensitive to price increases than sugar-sweetened beverages: analysis of British food purchase data

    Science.gov (United States)

    Smith, Richard D; Quirmbach, Diana; Jebb, Susan A

    2018-01-01

    Objectives Taxing sugar-sweetened beverages (SSBs) is now advocated, and implemented, in many countries as a measure to reduce the purchase and consumption of sugar to tackle obesity. To date, there has been little consideration of the potential impact that such a measure could have if extended to other sweet foods, such as confectionery, cakes and biscuits that contribute more sugar to the diet than SSBs. The objective of this study is to compare changes in the demand for sweet snacks and SSBs arising from potential price increases. Setting Secondary data on household itemised purchases of all foods and beverages from 2012 to 2013. Participants Representative sample of 32 249 households in Great Britain. Primary and secondary outcome measures Change in food and beverage purchases due to changes in their own price and the price of other foods or beverages measured as price elasticity of demand for the full sample and by income groups. Results Chocolate and confectionery, cakes and biscuits have similar price sensitivity as SSBs, across all income groups. Unlike the case of SSBs, price increases in these categories are also likely to prompt reductions in the purchase of other sweet snacks and SSBs, which magnify the overall impact. The effects of price increases are greatest in the low-income group. Conclusions Policies that lead to increases in the price of chocolate and confectionery, cakes and biscuits may lead to additional and greater health gains than similar increases in the price of SSBs through direct reductions in the purchases of these foods and possible positive multiplier effects that reduce demand for other products. Although some uncertainty remains, the associations found in this analysis are sufficiently robust to suggest that policies—and research—concerning the use of fiscal measures should consider a broader range of products than is currently the case. PMID:29700100

  4. Are sweet snacks more sensitive to price increases than sugar-sweetened beverages: analysis of British food purchase data.

    Science.gov (United States)

    Smith, Richard D; Cornelsen, Laura; Quirmbach, Diana; Jebb, Susan A; Marteau, Theresa M

    2018-04-26

    Taxing sugar-sweetened beverages (SSBs) is now advocated, and implemented, in many countries as a measure to reduce the purchase and consumption of sugar to tackle obesity. To date, there has been little consideration of the potential impact that such a measure could have if extended to other sweet foods, such as confectionery, cakes and biscuits that contribute more sugar to the diet than SSBs. The objective of this study is to compare changes in the demand for sweet snacks and SSBs arising from potential price increases. Secondary data on household itemised purchases of all foods and beverages from 2012 to 2013. Representative sample of 32 249 households in Great Britain. Change in food and beverage purchases due to changes in their own price and the price of other foods or beverages measured as price elasticity of demand for the full sample and by income groups. Chocolate and confectionery, cakes and biscuits have similar price sensitivity as SSBs, across all income groups. Unlike the case of SSBs, price increases in these categories are also likely to prompt reductions in the purchase of other sweet snacks and SSBs, which magnify the overall impact. The effects of price increases are greatest in the low-income group. Policies that lead to increases in the price of chocolate and confectionery, cakes and biscuits may lead to additional and greater health gains than similar increases in the price of SSBs through direct reductions in the purchases of these foods and possible positive multiplier effects that reduce demand for other products. Although some uncertainty remains, the associations found in this analysis are sufficiently robust to suggest that policies-and research-concerning the use of fiscal measures should consider a broader range of products than is currently the case. © Article author(s) (or their employer(s) unless otherwise stated in the text of the article) 2018. All rights reserved. No commercial use is permitted unless otherwise expressly

  5. Do consumers of manufactured cigarettes respond differently to price changes compared with their Roll-Your-Own counterparts? Evidence from New Zealand.

    Science.gov (United States)

    Tait, Peter; Rutherford, Paul; Saunders, Caroline

    2015-05-01

    Price-based mechanisms are an important tobacco cessation policy tool in New Zealand (NZ) and so measurement of smokers' reaction to price changes is crucial in determining efficacy of this approach. Although approximately two-thirds of NZ tobacco demand is for manufactured cigarettes (MC) and one-third is for Roll-Your-Own (RYO) tobacco, previous price elasticity estimates have ignored differences between RYO tobacco and MC consumers. We employ a seemingly unrelated regression econometric approach applied to quarterly data over the period 1991-2011 to estimate price elasticities of demand separately for MC and RYO tobacco. Estimate of price elasticity of demand for MC is -1.033, and -0.441 for RYO tobacco. RYO tobacco is an inferior good; a 1% increase in average weekly income is associated with a 0.8% reduction in demand. RYO tobacco is a substitute for MC; a 1% increase in the price of MC is associated with a 0.867% increase in demand for RYO tobacco. There is significantly different price responsiveness across the two tobacco product types. MC smokers react far more strongly to price increases compared with RYO tobacco smokers. These findings suggest that pricing mechanisms may be more effective for reducing MC demand than for RYO tobacco. However, substitution between products means that this pricing effect is muted by the uptake of RYO tobacco use. Cessation policy specific to RYO use should be designed to target this growing group. Published by the BMJ Publishing Group Limited. For permission to use (where not already granted under a licence) please go to http://group.bmj.com/group/rights-licensing/permissions.

  6. Do healthcare tax credits help poor-health individuals on low incomes?

    Science.gov (United States)

    Di Novi, Cinzia; Marenzi, Anna; Rizzi, Dino

    2018-03-01

    In several countries, personal income tax permits tax credits for out-of-pocket healthcare expenditure. Tax credits benefit taxpayers at all income levels by reducing their net tax liability and modify the price of out-of-pocket expenditure. To the extent that consumer demand is price elastic, they may influence the amount of eligible healthcare expenditure for which taxpayers may claim a credit. These effects influence, in turn, income distributions and taxpayers' health status and therefore income-related inequality in health. Redistributive consequences of tax credits have been widely investigated. However, little is known about the ability of tax credits to alleviate health inequality. In this paper, we study the potential effects that tax credits for health expenses may have on income-related inequality in health status with reference to the Italian institutional setting. The analysis is performed using a tax-benefit microsimulation model that reproduces the personal income tax and incorporates taxpayers' behavioral responses to changes in tax credit rate. Our results suggest that the current healthcare tax credit design tends to favor the richest part of the population.

  7. Estimating the Price Elasticity of Demand for Cannabis: A Geographical and Crowdsourced Approach || La estimación de la elasticidad en los precios de la demanda de cannabis: un enfoque geográfico y basado en la colaboración abierta distribuida

    Directory of Open Access Journals (Sweden)

    Halcoussis, Dennis

    2017-06-01

    Full Text Available Recent legalizations of cannabis at the state level in the United States have given rise to renewed interest in the price elasticity of demand for cannabis and implications for likely state excise and sales tax revenues. We use crowdsourced data on prices, qualities, and consumption of cannabis across regional markets in the United States to estimate the price elasticity of demand for cannabis. We use distances from growing areas to the major markets as a proxy for cost variations. We obtain an estimate of the price elasticity of demand for cannabis of -0.418, which suggests that legalizing and taxing recreational cannabis use would be lucrative for government treasuries. || Las recientes legalizaciones del cannabis a nivel estatal en los Estados Unidos han dado lugar a un renovado interés en la elasticidad en los precios de la demanda de cannabis y sus implicaciones en los ingresos por impuestos estatales y sobre ingresos por ventas. Utilizamos datos en colaboración abierta sobre precios, calidades y consumo de cannabis en los mercados regionales de los Estados Unidos para estimar la elasticidad en los precios de la demanda de cannabis. Utilizamos distancias desde las zonas de cultivo hasta los principales mercados como sustituto de las variaciones de los costos. Se obtiene una estimación de la elasticidad en los precios de la demanda de cannabis de -0,418, lo que sugiere que la legalización y el gravamen del cannabis para uso recreativo sería lucrativo para los erarios públicos.

  8. Geographical Income Polarization

    DEFF Research Database (Denmark)

    Azhar, Hussain; Jonassen, Anders Bruun

    inter municipal income inequality. Counter factual simulations show that rising property prices to a large part explain the rise in polarization. One side-effect of polarization is tendencies towards a parallel polarization of residence location patterns, where low skilled individuals tend to live...

  9. Impact of Income on Customers' Loyalty: Are Customers with Higher Income more Loyal?

    Directory of Open Access Journals (Sweden)

    Klopotan Igor

    2016-03-01

    Full Text Available Background: Recent research on customers’ loyalty mostly focuses on several indicators, such as price, income and promotion. However, the level of income and its impacts on customers' loyalty have not been investigated in greater details.

  10. Price fairness

    OpenAIRE

    Diller, Hermann

    2013-01-01

    Purpose – The purpose of this article is to integrate the various strands of fair price research into a concise conceptual model. Design/methodology/approach – The proposed price fairness model is based on a review of the fair pricing literature, incorporating research reported in not only English but also German. Findings – The proposed fair price model depicts seven components of a fair price: distributive fairness, consistent behaviour, personal respect and regard for the partner, fair dea...

  11. Income trusts and limited partnerships

    International Nuclear Information System (INIS)

    Toews, E.L.

    1999-01-01

    This author provided a conceptual overview of income trusts and limited partnerships that are designed to pass operating cash flow directly to investors without the imposition of corporate taxes, discussed the evolution of the market, the mechanism used to price income funds, past and present performance of the sector, and made some predictions concerning the sector's future performance. 13 figs

  12. Dynamic Pricing

    DEFF Research Database (Denmark)

    Sharifi, Reza; Anvari-Moghaddam, Amjad; Fathi, S. Hamid

    2017-01-01

    Dynamic pricing scheme, also known as real-time pricing (RTP), can be more efficient and technically beneficial than the other price-based schemes (such as flat-rate or time-of-use (TOU) pricing) for enabling demand response (DR) actions. Over the past few years, advantages of RTP-based schemes h...... of dynamic pricing can lead to increased willingness of consumers to participate in DR programs which in turn improve the operation of liberalized electricity markets.......Dynamic pricing scheme, also known as real-time pricing (RTP), can be more efficient and technically beneficial than the other price-based schemes (such as flat-rate or time-of-use (TOU) pricing) for enabling demand response (DR) actions. Over the past few years, advantages of RTP-based schemes...

  13. Elasticity of Substitution and Antidumping Measures

    DEFF Research Database (Denmark)

    Drud Hansen, Jørgen; Meinen, Philipp; Nielsen, Jørgen Ulff-Møller

    Abstract This paper analyzes the role of the elasticity of substitution for anti-dumping decisions across countries. In monopolistic competition models with cost heterogeneous firms across countries, price differences vary inversely with the elasticity of substitution. Anti-dumping duties should...... therefore also vary inversely with the elasticity of substitution at least for countries which have a strong focus on prices in the determination of their anti-dumping measures. We test this for ten countries from 1990 to 2009 using data on anti-dumping from Chad Bown (2010) and US-data at 8-digit level...... in our empirical investigation support the predicted role of the elasticity of substitution as we find a significant negative relation between the elasticity of substitution and the final anti-dumping duties for the ‘lesser duty rule’ group of countries. The countries which do not follow the ‘lesser duty...

  14. Assessing the potential effectiveness of food and beverage taxes and subsidies for improving public health: a systematic review of prices, demand and body weight outcomes.

    Science.gov (United States)

    Powell, L M; Chriqui, J F; Khan, T; Wada, R; Chaloupka, F J

    2013-02-01

    Taxes and subsidies are increasingly being considered as potential policy instruments to incentivize consumers to improve their food and beverage consumption patterns and related health outcomes. This study provided a systematic review of recent U.S. studies on the price elasticity of demand for sugar-sweetened beverages (SSBs), fast food, and fruits and vegetables, as well as the direct associations of prices/taxes with body weight outcomes. Based on the recent literature, the price elasticity of demand for SSBs, fast food, fruits and vegetables was estimated to be -1.21, -0.52, -0.49 and -0.48, respectively. The studies that linked soda taxes to weight outcomes showed minimal impacts on weight; however, they were based on existing state-level sales taxes that were relatively low. Higher fast-food prices were associated with lower weight outcomes particularly among adolescents, suggesting that raising prices would potentially impact weight outcomes. Lower fruit and vegetable prices were generally found to be associated with lower body weight outcomes among both low-income children and adults, suggesting that subsidies that would reduce the cost of fruits and vegetables for lower-socioeconomic populations may be effective in reducing obesity. Pricing instruments should continue to be considered and evaluated as potential policy instruments to address public health risks. © 2012 The Authors. obesity reviews © 2012 International Association for the Study of Obesity.

  15. Assessing the Potential Effectiveness of Food and Beverage Taxes and Subsidies for Improving Public Health: A Systematic Review of Prices, Demand and Body Weight Outcomes

    Science.gov (United States)

    Powell, Lisa M.; Chriqui, Jamie F.; Khan, Tamkeen; Wada, Roy; Chaloupka, Frank J.

    2012-01-01

    Taxes and subsidies are increasingly being considered as potential policy instruments to incentivize consumers to improve their food and beverage consumption patterns and related health outcomes. This study provided a systematic review of recent U.S. studies on the price elasticity of demand for sugar-sweetened beverages (SSBs), fast food and fruits and vegetables as well as the direct associations of prices/taxes with body weight outcomes. Based on the recent literature, the price elasticity of demand for SSBs, fast food, fruits and vegetables was estimated to be −1.21, −0.52, −0.49 and −0.48, respectively. The studies that linked soda taxes to weight outcomes showed minimal impacts on weight; however, they were based on existing state-level sales taxes that were relatively low. Higher fast-food prices were associated with lower weight outcomes particularly among adolescents suggesting that raising prices would potentially impact weight outcomes. Lower fruit and vegetable prices were generally found to be associated with lower body weight outcomes among both low-income children and adults suggesting that subsidies that would reduce the cost of fruits and vegetables for lower-socioeconomic populations may be effective in reducing obesity. Pricing instruments should continue to be considered and evaluated as potential policy instruments to address public health risks. PMID:23174017

  16. The effect of cigarette price increase on the cigarette consumption in Taiwan: evidence from the National Health Interview Surveys on cigarette consumption.

    Science.gov (United States)

    Lee, Jie-Min; Hwang, Tsorng-Chyi; Ye, Chun-Yuan; Chen, Sheng-Hong

    2004-12-14

    This study uses cigarette price elasticity to evaluate the effect of a new excise tax increase on cigarette consumption and to investigate responses from various types of smokers. Our sample consisted of current smokers between 17 and 69 years old interviewed during an annual face-to-face survey conducted by Taiwan National Health Research Institutes between 2000 to 2003. We used Ordinary Least Squares (OLS) procedure to estimate double logarithmic function of cigarette demand and cigarette price elasticity. In 2002, after Taiwan had enacted the new tax scheme, cigarette price elasticity in Taiwan was found to be -0.5274. The new tax scheme brought about an average annual 13.27 packs/person (10.5%) reduction in cigarette consumption. Using the cigarette price elasticity estimate from -0.309 in 2003, we calculated that if the Health and Welfare Tax were increased by another NT 3 dollars per pack and cigarette producers shifted this increase to the consumers, cigarette consumption would be reduced by 2.47 packs/person (2.2%). The value of the estimated cigarette price elasticity is smaller than one, meaning that the tax will not only reduce cigarette consumption but it will also generate additional tax revenues. Male smokers who had no income or who smoked light cigarettes were found to be more responsive to changes in cigarette price. An additional tax added to the cost of cigarettes would bring about a reduction in cigarette consumption and increased tax revenues. It would also help reduce incidents smoking-related illnesses. The additional tax revenues generated by the tax increase could be used to offset the current financial deficiency of Taiwan's National Health Insurance program and provide better public services.

  17. The effect of cigarette price increase on the cigarette consumption in Taiwan: evidence from the National Health Interview Surveys on cigarette consumption

    Directory of Open Access Journals (Sweden)

    Ye Chun-Yuan

    2004-12-01

    Full Text Available Abstract Background This study uses cigarette price elasticity to evaluate the effect of a new excise tax increase on cigarette consumption and to investigate responses from various types of smokers. Methods Our sample consisted of current smokers between 17 and 69 years old interviewed during an annual face-to-face survey conducted by Taiwan National Health Research Institutes between 2000 to 2003. We used Ordinary Least Squares (OLS procedure to estimate double logarithmic function of cigarette demand and cigarette price elasticity. Results In 2002, after Taiwan had enacted the new tax scheme, cigarette price elasticity in Taiwan was found to be -0.5274. The new tax scheme brought about an average annual 13.27 packs/person (10.5% reduction in cigarette consumption. Using the cigarette price elasticity estimate from -0.309 in 2003, we calculated that if the Health and Welfare Tax were increased by another NT$ 3 per pack and cigarette producers shifted this increase to the consumers, cigarette consumption would be reduced by 2.47 packs/person (2.2%. The value of the estimated cigarette price elasticity is smaller than one, meaning that the tax will not only reduce cigarette consumption but it will also generate additional tax revenues. Male smokers who had no income or who smoked light cigarettes were found to be more responsive to changes in cigarette price. Conclusions An additional tax added to the cost of cigarettes would bring about a reduction in cigarette consumption and increased tax revenues. It would also help reduce incidents smoking-related illnesses. The additional tax revenues generated by the tax increase could be used to offset the current financial deficiency of Taiwan's National Health Insurance program and provide better public services.

  18. Biofuel and Food-Commodity Prices

    Directory of Open Access Journals (Sweden)

    David Zilberman

    2012-09-01

    Full Text Available The paper summarizes key findings of alternative lines of research on the relationship between food and fuel markets, and identifies gaps between two bodies of literature: one that investigates the relationship between food and fuel prices, and another that investigates the impact of the introduction of biofuels on commodity-food prices. The former body of literature suggests that biofuel prices do not affect food-commodity prices, but the latter suggests it does. We try to explain this gap, and then show that although biofuel was an important contributor to the recent food-price inflation of 2001–2008, its effect on food-commodity prices declined after the recession of 2008/09. We also show that the introduction of cross-price elasticity is important when explaining soybean price, but less so when explaining corn prices.

  19. Speed and income

    DEFF Research Database (Denmark)

    Fosgerau, Mogens

    2005-01-01

    The relationship between speed and income is established in a microeconomic model focusing on the trade-off between travel time and the risk of receiving a penalty for exceeding the speed limit. This is used to determine when a rational driver will choose to exceed the speed limit. The relationship...... between speed and income is found again in the empirical analysis of a cross-sectional dataset comprising 60,000 observations of car trips. This is used to perform regressions of speed on income, distance travelled, and a number of controls. The results are clearly statistically significant and indicate...... an average income elasticity of speed of 0.02; it is smaller at short distances and about twice as large at the longest distance investigated of 200 km....

  20. The effect of cigarette price increases on cigarette consumption, tax revenue, and smoking-related death in Africa from 1999 to 2013.

    Science.gov (United States)

    Ho, Li-Ming; Schafferer, Christian; Lee, Jie-Min; Yeh, Chun-Yuan; Hsieh, Chi-Jung

    2017-11-01

    This study investigates the effects of price hikes on cigarette consumption, tobacco tax revenues, and reduction in smoking-caused mortality in 36 African countries. Using panel data from the 1999-2013 Euromonitor International, the World Bank and the World Health Organization, we applied fixed-effects and random-effects regression models of panel data to estimate the elasticity of cigarette prices and simulate the effect of price fluctuations. Cigarette price elasticity was the highest for low-income countries and considerably lower for other African economies. The administered simulation shows that with an average annual cigarette price increase of 7.38%, the average annual cigarette consumption would decrease by 3.84%, and the average annual tobacco tax revenue would increase by 19.39%. By 2050, the number of averted smoking-attributable deaths (SADs) will be the highest in South Africa, followed by the Democratic Republic of Congo, Madagascar, and Ethiopia. Excise tax increases have a significant effect on the reduction of smoking prevalence and the number of averted smoking-attributable deaths, Low-income countries are most affected by high taxation policies.

  1. 75 FR 34074 - Postal Pricing Methods

    Science.gov (United States)

    2010-06-16

    ... Methods AGENCY: Postal Regulatory Commission. ACTION: Notice of proposed rulemaking. SUMMARY: The... price sensitivity (elasticity) to volumes actually mailed during the rebate program. This method is... indicated by the market elasticity. Mitchell Comments at 4-6. Postal Service method. In its data collection...

  2. The development in energy consumption, price sensitivity and allocation of power; Utviklingen i stroemforbruket, prisfoelsomheten og stroemmarkedet

    Energy Technology Data Exchange (ETDEWEB)

    Halvorsen, Bente

    2012-11-15

    This report discusses the development in energy consumption in households, service industries, primary industries and other small industries, both in the short run (hour to hour, day by day) and over a longer period, back to the 1960. The report discusses the main driving forces behind this development, as well as the demand price sensitivity and its role in the allocation of power between customers and over time. The analysis shows that for the short-term fluctuations in consumption from hour to hour, the temperature of the main driver, while price changes have less influence. For the long-term trend, however, changes in relative energy prices are a key driver, along with population and income growth. Even if the short term price sensitivity is low for end-users, it may still have a big influence on the short-term clearance of the market (from hour to hour), as it affects the short term price sensitivity in the spot market. The long-term price elasticities in the retail markets is more important for determining consumption over a time period, and is important in allocating energy resources over time in the spot market, e.g. over the winter months. Empirical analyses show that the Norwegian demand responds to price changes, both in the short term in the spot market and in the longer term in the retail market. It takes a few weeks before the price signals from spot market affects the consumer prise for most end-users, but by then, most of the price signal has been transmitted. It also follows from the analysis that it is important to let prices vary between regions of the market in the event of scarcity, so customers in regions where shortages occur, have the incentive to change their demand. The faster these price signals affect consumer prices, the more efficient the market will be able to handle a tight power situation.(Author)

  3. Price stabilization for raw jute in Bangladesh

    OpenAIRE

    Takamasa Akiyama; Varangis, Panos

    1991-01-01

    Fluctuating prices for raw jute have been viewed as contributing to economic problems in the jute subsector. Price fluctuations were thought to reduce the jute farmers'welfare and there has been concern about the costs of parastatals'stocking operations in attempts to stabilize jute prices and incomes. The authors examine these fluctuations and analyze policies that might reduce them. They find that price fluctuations for raw jute reduce farmers'welfare only slightly because farmers'activitie...

  4. The effects of a rise in cigarette price on cigarette consumption, tobacco taxation revenues, and of smoking-related deaths in 28 EU countries-- applying threshold regression modelling

    Directory of Open Access Journals (Sweden)

    Chun-Yuan Yeh

    2017-09-01

    Full Text Available Abstract Background European Union public healthcare expenditure on treating smoking and attributable diseases is estimated at over €25bn annually. The reduction of tobacco consumption has thus become one of the major social policies of the EU. This study investigates the effects of price hikes on cigarette consumption, tobacco tax revenues and smoking-caused deaths in 28 EU countries. Methods Employing panel data for the years 2005 to 2014 from Euromonitor International, the World Bank and the World Health Organization, we used income as a threshold variable and applied threshold regression modelling to estimate the elasticity of cigarette prices and to simulate the effect of price fluctuations. Results The results showed that there was an income threshold effect on cigarette prices in the 28 EU countries that had a gross national income (GNI per capita lower than US$5418, with a maximum cigarette price elasticity of −1.227. The results of the simulated analysis showed that a rise of 10% in cigarette price would significantly reduce cigarette consumption as well the total death toll caused by smoking in all the observed countries, but would be most effective in Bulgaria and Romania, followed by Latvia and Poland. Additionally, an increase in the number of MPOWER tobacco control policies at the highest level of achievment would help reduce cigarette consumption. Conclusions It is recommended that all EU countries levy higher tobacco taxes to increase cigarette prices, and thus in effect reduce cigarette consumption. The subsequent increase in tobacco tax revenues would be instrumental in covering expenditures related to tobacco prevention and control programs.

  5. The effects of a rise in cigarette price on cigarette consumption, tobacco taxation revenues, and of smoking-related deaths in 28 EU countries-- applying threshold regression modelling.

    Science.gov (United States)

    Yeh, Chun-Yuan; Schafferer, Christian; Lee, Jie-Min; Ho, Li-Ming; Hsieh, Chi-Jung

    2017-09-21

    European Union public healthcare expenditure on treating smoking and attributable diseases is estimated at over €25bn annually. The reduction of tobacco consumption has thus become one of the major social policies of the EU. This study investigates the effects of price hikes on cigarette consumption, tobacco tax revenues and smoking-caused deaths in 28 EU countries. Employing panel data for the years 2005 to 2014 from Euromonitor International, the World Bank and the World Health Organization, we used income as a threshold variable and applied threshold regression modelling to estimate the elasticity of cigarette prices and to simulate the effect of price fluctuations. The results showed that there was an income threshold effect on cigarette prices in the 28 EU countries that had a gross national income (GNI) per capita lower than US$5418, with a maximum cigarette price elasticity of -1.227. The results of the simulated analysis showed that a rise of 10% in cigarette price would significantly reduce cigarette consumption as well the total death toll caused by smoking in all the observed countries, but would be most effective in Bulgaria and Romania, followed by Latvia and Poland. Additionally, an increase in the number of MPOWER tobacco control policies at the highest level of achievment would help reduce cigarette consumption. It is recommended that all EU countries levy higher tobacco taxes to increase cigarette prices, and thus in effect reduce cigarette consumption. The subsequent increase in tobacco tax revenues would be instrumental in covering expenditures related to tobacco prevention and control programs.

  6. Elastic Beanstalk

    CERN Document Server

    Vliet, Jurg; Wel, Steven; Dowd, Dara

    2011-01-01

    While it's always been possible to run Java applications on Amazon EC2, Amazon's Elastic Beanstalk makes the process easier-especially if you understand how it works beneath the surface. This concise, hands-on book not only walks you through Beanstalk for deploying and managing web applications in the cloud, you'll also learn how to use this AWS tool in other phases of development. Ideal if you're a developer familiar with Java applications or AWS, Elastic Beanstalk provides step-by-step instructions and numerous code samples for building cloud applications on Beanstalk that can handle lots

  7. Transfer Pricing

    DEFF Research Database (Denmark)

    Nielsen, Søren Bo

    2014-01-01

    Against a background of rather mixed evidence about transfer pricing practices in multinational enterprises (MNEs) and varying attitudes on the part of tax authorities, this paper explores how multiple aims in transfer pricing can be pursued across four different transfer pricing regimes. A MNE h...

  8. Gold prices

    OpenAIRE

    Joseph G. Haubrich

    1998-01-01

    The price of gold commands attention because it serves as an indicator of general price stability or inflation. But gold is also a commodity, used in jewelry and by industry, so demand and supply affect its pricing and need to be considered when gold is a factor in monetary policy decisions.

  9. Nuclear energy consumption, oil prices, and economic growth: Evidence from highly industrialized countries

    International Nuclear Information System (INIS)

    Lee, Chien-Chiang; Chiu, Yi-Bin

    2011-01-01

    This study utilizes the Johansen cointegration technique, the Granger non-causality test of Toda and Yamamoto (1995), the generalized impulse response function, and the generalized forecast error variance decomposition to examine the dynamic interrelationship among nuclear energy consumption, real oil price, oil consumption, and real income in six highly industrialized countries for the period 1965-2008. Our empirical results indicate that the relationships between nuclear energy consumption and oil are as substitutes in the U.S. and Canada, while they are complementary in France, Japan, and the U.K. Second, the long-run income elasticity of nuclear energy is larger than one, indicating that nuclear energy is a luxury good. Third, the results of the Granger causality test find evidence of unidirectional causality running from real income to nuclear energy consumption in Japan. A bidirectional relationship appears in Canada, Germany and the U.K., while no causality exists in France and the U.S. We also find evidence of causality running from real oil price to nuclear energy consumption, except for the U.S., and causality running from oil consumption to nuclear energy consumption in Canada, Japan, and the U.K., suggesting that changes in price and consumption of oil influence nuclear energy consumption. Finally, the results observe transitory initial impacts of innovations in real income and oil consumption on nuclear energy consumption. In the long run the impact of real oil price is relatively larger compared with that of real income on nuclear energy consumption in Canada, Germany, Japan, and the U.S.

  10. Nuclear energy consumption, oil prices, and economic growth: Evidence from highly industrialized countries

    Energy Technology Data Exchange (ETDEWEB)

    Lee, Chien-Chiang, E-mail: cclee@cm.nsysu.edu.tw; Chiu, Yi-Bin

    2011-03-15

    This study utilizes the Johansen cointegration technique, the Granger non-causality test of Toda and Yamamoto (1995), the generalized impulse response function, and the generalized forecast error variance decomposition to examine the dynamic interrelationship among nuclear energy consumption, real oil price, oil consumption, and real income in six highly industrialized countries for the period 1965-2008. Our empirical results indicate that the relationships between nuclear energy consumption and oil are as substitutes in the U.S. and Canada, while they are complementary in France, Japan, and the U.K. Second, the long-run income elasticity of nuclear energy is larger than one, indicating that nuclear energy is a luxury good. Third, the results of the Granger causality test find evidence of unidirectional causality running from real income to nuclear energy consumption in Japan. A bidirectional relationship appears in Canada, Germany and the U.K., while no causality exists in France and the U.S. We also find evidence of causality running from real oil price to nuclear energy consumption, except for the U.S., and causality running from oil consumption to nuclear energy consumption in Canada, Japan, and the U.K., suggesting that changes in price and consumption of oil influence nuclear energy consumption. Finally, the results observe transitory initial impacts of innovations in real income and oil consumption on nuclear energy consumption. In the long run the impact of real oil price is relatively larger compared with that of real income on nuclear energy consumption in Canada, Germany, Japan, and the U.S.

  11. A Multiperiod Equilibrium Pricing Model

    Directory of Open Access Journals (Sweden)

    Minsuk Kwak

    2014-01-01

    Full Text Available We propose an equilibrium pricing model in a dynamic multiperiod stochastic framework with uncertain income. There are one tradable risky asset (stock/commodity, one nontradable underlying (temperature, and also a contingent claim (weather derivative written on the tradable risky asset and the nontradable underlying in the market. The price of the contingent claim is priced in equilibrium by optimal strategies of representative agent and market clearing condition. The risk preferences are of exponential type with a stochastic coefficient of risk aversion. Both subgame perfect strategy and naive strategy are considered and the corresponding equilibrium prices are derived. From the numerical result we examine how the equilibrium prices vary in response to changes in model parameters and highlight the importance of our equilibrium pricing principle.

  12. PRICES - PREREQUISITE OF MARKET DEVELOPMENT

    Directory of Open Access Journals (Sweden)

    VĂDUVA MARIA

    2017-08-01

    Full Text Available Prices are the key points of transfer and interactions. Balance means knowing the real demand and adapting thier supply at its level and structure. In studying the prices, the knowledge of economic content and the mechanism of their formation in exchange process is a crucial prerequisites to accomplish the transition from theoretical foundations to practical foundations of concrete modalities, of pricing techniques. If demand can assimilate the production of considered enterprises, then the manufacturer is concerned to determine that level of production for which will get maximum profit, profitability threshold, elasticity of supply compared with the price, to choose the best outlet. Price depends on the intersection of demand and supply

  13. The Connection Between House Price Appreciation and Property Tax Revenues*

    OpenAIRE

    Lutz, Byron F.

    2008-01-01

    This paper explores two aspects of the connection between property tax revenues and house prices. First, I estimate the elasticity of property tax revenues with respect to house prices. This elasticity does not necessarily equal one as governments may adjust effective tax rates to offset changes in property values. Second, I examine the timing of the relationship. Institutional features of the property tax make it unlikely that changes in house prices will immediately influence tax revenues. ...

  14. Impact of regulated price adjustments on price variability in a very low inflation transition economy: Case of Armenia

    Directory of Open Access Journals (Sweden)

    Aghassi Mkrtchyan

    2005-06-01

    Full Text Available This paper examines the impact of monetary policy and administrative price adjustments on price variability in a low inflation economy characterized by relatively frequent administrative price adjustments. Fluctuations of market determined prices, prices of agricultural goods in particular, are linked to poor synchronization between administrative price changes and monetary policy. If monetary policy does not account for expected changes in administrative prices, demand for free goods shifts, causing fluctuation of prices for agricultural goods, because the supply of these goods is highly inelastic in Armenia. The findings contribute to a better understanding of agricultural price variability during 1998-2002. The impact of macroeconomic policy and structural adjustments on income distribution and rural poverty incidence are also examined. This research has immediate policy implications, since Armenia will continue to undergo major upward price adjustments of regulated prices, which may have a negative impact on income distribution unless aggregate demand management is changed.

  15. A Possible Method for Warning of House Price Bubble

    Directory of Open Access Journals (Sweden)

    Anthony Yanxiang Gu

    2013-07-01

    Full Text Available Metropolitan areas that had the most house price inflation between 1998 and 2006 and the highest price to income ratios are characterized by strong income growth and high population density. Areas with the highest price to income ratios in 2006 and lowest population density suffered the largest percentage price declines after the bubble burst. An equation is established for estimating warning level against house price bubble, and the estimated warning could leave 19 percent room and more than two years of time for action.

  16. Tax Bunching, Income Shifting and Self-employment

    DEFF Research Database (Denmark)

    le Maire, Christian Daniel; Schjerning, Bertel

    2013-01-01

    was neglected in this case, we would estimate a taxable income elasticity in the range of 0.43-0.53 and conclude that taxable incomes were highly sensitive to changes in marginal tax rates. We show, however, that more than half of the bunching in taxable income is driven by intertemporal income shifting...

  17. Elastic scattering

    International Nuclear Information System (INIS)

    Leader, Elliot

    1991-01-01

    With very few unexplained results to challenge conventional ideas, physicists have to look hard to search for gaps in understanding. An area of physics which offers a lot more than meets the eye is elastic and diffractive scattering where particles either 'bounce' off each other, emerging unscathed, or just graze past, emerging relatively unscathed. The 'Blois' workshops provide a regular focus for this unspectacular, but compelling physics, attracting highly motivated devotees

  18. How Does Pricing of Day-ahead Electricity Market Affect Put Option Pricing?

    Directory of Open Access Journals (Sweden)

    H. Raouf Sheybani

    2016-09-01

    Full Text Available In this paper, impacts of day-ahead market pricing on behavior of producers and consumers in option and day-ahead markets and on option pricing are studied. To this end, two comprehensive equilibrium models for joint put option and day-ahead markets under pay-as-bid and uniform pricing in day-ahead market are presented, respectively. Interaction between put option and day-ahead markets, uncertainty in fuel price, day-ahead market pricing, and elasticity of consumers to strike price, premium price, and day-ahead price are taken into account in these models. By applying the presented models to a test system impact of day-ahead market pricing on equilibrium of joint put option and day-ahead markets are studied.

  19. Credit price optimisation within retail banking | Terblanche | ORiON

    African Journals Online (AJOL)

    The willingness of a customer to pay for a product or service is mathematically captured by a price elasticity model. The model relates the responsiveness of customers to a change in the quoted price. In addition to overall price sensitivity, adverse selection could be observed whereby certain customer segments react ...

  20. Transfer Pricing

    DEFF Research Database (Denmark)

    Rohde, Carsten; Rossing, Christian Plesner

    trade internally as the units have to decide what prices should be paid for such inter-unit transfers. One important challenge is to uncover the consequences that different transfer prices have on the willingness in the organizational units to coordinate activities and trade internally. At the same time...... the determination of transfer price will affect the size of the profit or loss in the organizational units and thus have an impact on the evaluation of managers‟ performance. In some instances the determination of transfer prices may lead to a disagreement between coordination of the organizational units...

  1. Taking dietary habits into account: A computational method for modeling food choices that goes beyond price.

    Science.gov (United States)

    Beheshti, Rahmatollah; Jones-Smith, Jessica C; Igusa, Takeru

    2017-01-01

    Computational models have gained popularity as a predictive tool for assessing proposed policy changes affecting dietary choice. Specifically, they have been used for modeling dietary changes in response to economic interventions, such as price and income changes. Herein, we present a novel addition to this type of model by incorporating habitual behaviors that drive individuals to maintain or conform to prior eating patterns. We examine our method in a simulated case study of food choice behaviors of low-income adults in the US. We use data from several national datasets, including the National Health and Nutrition Examination Survey (NHANES), the US Bureau of Labor Statistics and the USDA, to parameterize our model and develop predictive capabilities in 1) quantifying the influence of prior diet preferences when food budgets are increased and 2) simulating the income elasticities of demand for four food categories. Food budgets can increase because of greater affordability (due to food aid and other nutritional assistance programs), or because of higher income. Our model predictions indicate that low-income adults consume unhealthy diets when they have highly constrained budgets, but that even after budget constraints are relaxed, these unhealthy eating behaviors are maintained. Specifically, diets in this population, before and after changes in food budgets, are characterized by relatively low consumption of fruits and vegetables and high consumption of fat. The model results for income elasticities also show almost no change in consumption of fruit and fat in response to changes in income, which is in agreement with data from the World Bank's International Comparison Program (ICP). Hence, the proposed method can be used in assessing the influences of habitual dietary patterns on the effectiveness of food policies.

  2. Taking dietary habits into account: A computational method for modeling food choices that goes beyond price.

    Directory of Open Access Journals (Sweden)

    Rahmatollah Beheshti

    Full Text Available Computational models have gained popularity as a predictive tool for assessing proposed policy changes affecting dietary choice. Specifically, they have been used for modeling dietary changes in response to economic interventions, such as price and income changes. Herein, we present a novel addition to this type of model by incorporating habitual behaviors that drive individuals to maintain or conform to prior eating patterns. We examine our method in a simulated case study of food choice behaviors of low-income adults in the US. We use data from several national datasets, including the National Health and Nutrition Examination Survey (NHANES, the US Bureau of Labor Statistics and the USDA, to parameterize our model and develop predictive capabilities in 1 quantifying the influence of prior diet preferences when food budgets are increased and 2 simulating the income elasticities of demand for four food categories. Food budgets can increase because of greater affordability (due to food aid and other nutritional assistance programs, or because of higher income. Our model predictions indicate that low-income adults consume unhealthy diets when they have highly constrained budgets, but that even after budget constraints are relaxed, these unhealthy eating behaviors are maintained. Specifically, diets in this population, before and after changes in food budgets, are characterized by relatively low consumption of fruits and vegetables and high consumption of fat. The model results for income elasticities also show almost no change in consumption of fruit and fat in response to changes in income, which is in agreement with data from the World Bank's International Comparison Program (ICP. Hence, the proposed method can be used in assessing the influences of habitual dietary patterns on the effectiveness of food policies.

  3. The importance of time cost in pricing outpatient care.

    Science.gov (United States)

    Heshmat, S

    1988-01-01

    The purpose of this article is to discuss the component of the full price charged to patients using outpatient care. The full price of a visit to a physician is equal to out-of-pocket payment (money price), and time costs. In particular, the article discusses the concept of time price (marginal value of time for a patient), and presents a specific example to illustrate the concept of time price elasticity. The concepts and information presented in this article can help marketing managers in setting pricing strategy that would explicitly consider time price.

  4. Chicago's water market: Dynamics of demand, prices and scarcity rents

    Science.gov (United States)

    Ipe, V.C.; Bhagwat, S.B.

    2002-01-01

    Chicago and its suburbs are experiencing an increasing demand for water from a growing population and economy and may experience water scarcity in the near future. The Chicago metropolitan area has nearly depleted its groundwater resources to a point where interstate conflicts with Wisconsin could accompany an increased reliance on those sources. Further, the withdrawals from Lake Michigan is limited by the Supreme Court decree. The growing demand and indications of possible scarcity suggest a need to reexamine the pricing policies and the dynamics of demand. The study analyses the demand for water and develops estimates of scarcity rents for water in Chicago. The price and income elasticities computed at the means are -0.002 and 0.0002 respectively. The estimated scarcity rents ranges from $0.98 to $1.17 per thousand gallons. The results indicate that the current prices do not fully account for the scarcity rents and suggest a current rate with in the range $1.53 to $1.72 per thousand gallons.

  5. Petroleum price

    International Nuclear Information System (INIS)

    Chevallier, B.

    2009-01-01

    The 'AFTP' conference on 'petroleum prices' organized by Total last March, tries to explain the different aspects of the crisis we undergo for July 2007 and its consequential effects on the petroleum markets (supply, demand evolvements, impacts on reserves, prices, refining...). (O.M.)

  6. Price Strategies in Banking Marketing

    Directory of Open Access Journals (Sweden)

    Iuliana Cetina

    2007-01-01

    Full Text Available All organizations must settle a price for the services they offer. The price for services is an important element of the marketing mix, being an important income source for the organization. The settlement of a correct price, both for the market and the competition, is a significant element for the sector of financial - banking services. Another important factor to take into consideration is the fact that the banks do not settle only the prices for individual services, but also coordinate their prices for service packages. As the competition in the financial - banking services has intensified, the settlement of correct prices has become an essential element for the marketing strategy. Nevertheless it is important to remind that the price is not a central element. There are other significant grounds, the price being only one of the elements of the marketing mix. Although in Romania many customers may be sensitive in present to the price, as the competition will increase, the quality of the services will become more important to the customers, and the demand will be complex.

  7. The poverty elasticity of growth

    OpenAIRE

    Heltberg, Rasmus

    2002-01-01

    How much does economic growth contribute to poverty reduction? I discuss analytical and empirical approches to assess the poverty elasticity of growth, and emphasize that the relationship between growth and poverty change is non-constant. For a given poverty measure, it depends on initial inequality and on the location of the poverty line relative to mean income. In most cases, growth is more important for poverty reduction than changes in inequality, but this does not tender inequality unimp...

  8. Can price get the monkey off our back? A meta-analysis of illicit drug demand.

    Science.gov (United States)

    Gallet, Craig A

    2014-01-01

    Because of the increased availability of price data over the past 15 years, several studies have estimated the demand for illicit drugs, providing 462 estimates of the price elasticity. Results from estimating several meta-regressions reveal that these price elasticity estimates are influenced by a number of study characteristics. For instance, the price elasticity differs across drugs, with its absolute value being smallest for marijuana, compared with cocaine and heroin. Furthermore, price elasticity estimates are sensitive to whether demand is modeled in the short-run or the long-run, measures of quantity and price, whether or not alcohol and other illicit drugs are included in the specification of demand, and the location of demand. However, a number of other factors, including the functional form of demand, several specification issues, the type of data and method used to estimate demand, and the quality of the publication outlet, have less influence on the price elasticity. Copyright © 2013 John Wiley & Sons, Ltd.

  9. The China price: Evidence and some implications

    OpenAIRE

    Álvarez, Roberto; Claro, Sebastián

    2006-01-01

    China´s import penetration in Chilean markets is higher in unskilled-labor intensive sectors as predicted by traditional endowment-based theories of comparative advantage. However, there is also evidence of within-industry specialization. In particular, high-income countries receive higher prices for its products, and Chinese products are not only cheaper in comparison to the world average but also relative to countries with similar income per capita. These price differences cannot account fo...

  10. A Note on Comparing the Elasticities of Demand Curves.

    Science.gov (United States)

    Nieswiadomy, Michael

    1986-01-01

    Demonstrates a simple and useful way to compare the elasticity of demand at each price (or quantity) for different demand curves. The technique is particularly useful for the intermediate microeconomic course. (Author)

  11. Incentive Elasticity of Demand for Bike/Walk Program

    Science.gov (United States)

    2008-12-29

    The primary objective of this research is to estimate the "incentive" (price) elasticity of demand for using non-motorized transportation (specifically walking and bicycling) to work. Results can be used directly in the formation of local policies to...

  12. A Note on the Teaching of Arc Elasticity.

    Science.gov (United States)

    Seldon, James R.

    1986-01-01

    Maintains that the Aba P. Lerner alternative for calculating arc elasticity is superior to the commonly used mean prices and quantities method typically used in intermediate microeconomics courses. (JDH)

  13. Stateless Income

    OpenAIRE

    Edward D Kleinbard

    2012-01-01

    This paper and its companion, The Lessons of Stateless Income, together comprehensively analyze the tax consequences and policy implications of the phenomenon of “stateless income.” Stateless income comprises income derived for tax purposes by a multinational group from business activities in a country other than the domicile of the group’s ultimate parent company, but which is subject to tax only in a jurisdiction that is not the location of the customers or the factors of production through...

  14. Equity impacts of price policies to promote healthy behaviours.

    Science.gov (United States)

    Sassi, Franco; Belloni, Annalisa; Mirelman, Andrew J; Suhrcke, Marc; Thomas, Alastair; Salti, Nisreen; Vellakkal, Sukumar; Visaruthvong, Chonlathan; Popkin, Barry M; Nugent, Rachel

    2018-04-04

    Governments can use fiscal policies to regulate the prices and consumption of potentially unhealthy products. However, policies aimed at reducing consumption by increasing prices, for example by taxation, might impose an unfair financial burden on low-income households. We used data from household expenditure surveys to estimate patterns of expenditure on potentially unhealthy products by socioeconomic status, with a primary focus on low-income and middle-income countries. Price policies affect the consumption and expenditure of a larger number of high-income households than low-income households, and any resulting price increases tend to be financed disproportionately by high-income households. As a share of all household consumption, however, price increases are often a larger financial burden for low-income households than for high-income households, most consistently in the case of tobacco, depending on how much consumption decreases in response to increased prices. Large health benefits often accrue to individual low-income consumers because of their strong response to price changes. The potentially larger financial burden on low-income households created by taxation could be mitigated by a pro-poor use of the generated tax revenues. Copyright © 2018 Elsevier Ltd. All rights reserved.

  15. Gas prices and price process

    International Nuclear Information System (INIS)

    Groenewegen, G.G.

    1992-01-01

    On a conference (Gas for Europe in the 1990's) during the Gasexpo '91 the author held a speech of which the Dutch text is presented here. Attention is paid to the current European pricing methods (prices based on the costs of buying, transporting and distributing the natural gas and prices based on the market value, which is deducted from the prices of alternative fuels), and the transparency of the prices (lack of information on the way the prices are determined). Also attention is paid to the market signal transparency and gas-gas competition, which means a more or less free market of gas distribution. The risks of gas-to-gas competition for a long term price stability, investment policies and security of supply are discussed. Opposition against the Third Party Access (TPA), which is the program to implement gas-to-gas competition, is caused by the fear of natural gas companies for lower gas prices and lower profits. Finally attention is paid to government regulation and the activities of the European Commission (EC) in this matter. 1 fig., 6 ills., 1 tab

  16. Implications Of Aggregate Demand Elasticity For The Phillips Curve

    OpenAIRE

    Ben L. Kyer; Gary E. Maggs

    2004-01-01

    While the general relationship between the aggregate supply curve and the Phillips curve is recognized, the importance of aggregate demand and, in particular, aggregate demand elasticity, for the inflation-unemployment relationship has been untreated. We believe, however, that the elasticity of aggregate demand with respect to the general price level does have some significance for the short-run Phillips curve since, on a general level, the economy's equilibrium price level, inflation rate, r...

  17. The Measurement of Tax Elasticity in India: A Time Series Approach

    OpenAIRE

    Acharya, Hem

    2011-01-01

    Revenue generation is an important goal of tax reform. The built-in responsiveness of revenues to changes in income, tax elasticity, provides very critical information for tax policy formulation. This paper utilises a time series approach to empirically estimate tax elasticities for India for the period 1991-2010. Tax elasticities are computed for income, turnover, excise, import and total taxes for the post-reform period. The elasticity coefficients reveal a low responsiveness of taxes to i...

  18. Measurement of Conjectural Variations Elasticity in an Oligopoly Structure (Using Iwata Approach for Iranians Food and Beverage Industry

    Directory of Open Access Journals (Sweden)

    M. Nabishahyakitash

    2015-05-01

    Full Text Available In this paper, we investigate Conjectural Variations elasticity in Iranians Food and Beverage industry using Iwata approach, The conjectural variation function is extracted from demand and supply information also optimization process on producers’ behavior. The experimental estimates of conjectural variation elasticities were obtained based on price elasticity of demand, cost elasticity and marginal cost elasticity for the selected industries. In this research demand function AIDS was used to obtain the price elasticity. The AIDS function was estimated using SUR and the demand price elasticity is calculated by calfent. The results show that "Vegetable oils and animal" industry with 19.37 have the most conjectural variation elasticity among the selected industries (The more divergent the conjectural variation elasticity is from zero the more likely the monopoly exists. In addition, dairy, sugar and malt industries have the most conjectural variation elasticity with 18.01, 17.18, and 10.51 respectively.

  19. Price increase

    CERN Multimedia

    2006-01-01

    Please take note that after five years of stable prices at Restaurant No 1 a price increase will come into force on 1st January 2006. This increase has been agreed after discussions between the CSR (Comité de Surveillance des Restaurants) and the catering company Novae and will reflect the inflation rate of the last few years. In addition, a new children's menu will be introduced, as well as 'Max Havelaar' fair-trade coffee at a price of 1.70 CHF.

  20. Price increase

    CERN Multimedia

    2005-01-01

    Please take note that after five years of stable prices at Restaurant No 1 a price increase will come into force on 1st January 2006. This increase has been agreed after discussions between the CSR (Comité de Surveillance des Restaurants) and the catering company Novae and will reflect the inflation rate of the last few years. In addition, a new children's menu will be introduced as well as 'Max Havelaar' fair-trade coffee at a price of 1.70 CHF.

  1. The substitution bias of the consumer price index

    OpenAIRE

    Frenger, Petter

    2006-01-01

    Abstract: The paper uses elementary consumer theory to propose an inflation independent ratio definition of the substitution bias of the Laspeyres consumer price index, and derives an approximate substitution bias which depends on the size of the price change as measured by a norm in the Laspeyres plane and on the elasticity of substitution in the direction of the price change. This norm or distance measure can be interpreted as a price substitution index which yields useful in...

  2. Nonlinear Elasticity

    Science.gov (United States)

    Fu, Y. B.; Ogden, R. W.

    2001-05-01

    This collection of papers by leading researchers in the field of finite, nonlinear elasticity concerns itself with the behavior of objects that deform when external forces or temperature gradients are applied. This process is extremely important in many industrial settings, such as aerospace and rubber industries. This book covers the various aspects of the subject comprehensively with careful explanations of the basic theories and individual chapters each covering a different research direction. The authors discuss the use of symbolic manipulation software as well as computer algorithm issues. The emphasis is placed firmly on covering modern, recent developments, rather than the very theoretical approach often found. The book will be an excellent reference for both beginners and specialists in engineering, applied mathematics and physics.

  3. Inequality, income, and poverty: comparative global evidence.

    Science.gov (United States)

    Fosu, Augustin Kwasi

    2010-01-01

    Objectives. The study seeks to provide comparative global evidence on the role of income inequality, relative to income growth, in poverty reduction.Methods. An analysis-of-covariance model is estimated using a large global sample of 1980–2004 unbalanced panel data, with the headcount measure of poverty as the dependent variable, and the Gini coefficient and PPP-adjusted mean income as explanatory variables. Both random-effects and fixed-effects methods are employed in the estimation.Results. The responsiveness of poverty to income is a decreasing function of inequality, and the inequality elasticity of poverty is actually larger than the income elasticity of poverty. Furthermore, there is a large variation across regions (and countries) in the relative effects of inequality on poverty.Conclusion. Income distribution plays a more important role than might be traditionally acknowledged in poverty reduction, though this importance varies widely across regions and countries.

  4. Freemium Pricing

    DEFF Research Database (Denmark)

    Runge, Julian; Wagner, Stefan; Claussen, Jörg

    Firms commonly run field experiments to improve their freemium pricing schemes. However, they often lack a framework for analysis that goes beyond directly measurable outcomes and focuses on longer term profit. We aim to fill this gap by structuring existing knowledge on freemium pricing...... into a stylized framework. We apply the proposed framework in the analysis of a field experiment that contrasts three variations of a freemium pricing scheme and comprises about 300,000 users of a software application. Our findings indicate that a reduction of free product features increases conversion as well...... as viral activity, but reduces usage – which is in line with the framework’s predictions. Additional back-of-the-envelope profit estimations suggest that managers were overly optimistic about positive externalities from usage and viral activity in their choice of pricing scheme, leading them to give too...

  5. Estimating Taxable Income Responses using Danish Tax Reforms

    DEFF Research Database (Denmark)

    Kleven, Henrik Jacobsen; Schultz, Esben Anton

    : (i ) Labor income elasticities are modest overall, around 0.05 for wage earners and 0.10 for self-employed individuals. (ii ) Capital income elasticities are about 2-3 times larger than labor income elasticities. (iii) Behavioral elasticities are much larger when estimated from large tax reform......This paper presents evidence on taxable income responses using administrative data that link tax return information to detailed socioeconomic information for the entire Danish population over 25 years. The identifying variation is provided by a series of tax reforms that create large tax variation...... across individuals, income forms, and over time. It is argued that the unique tax variation and data in Denmark makes it possible to control for the biases from non-tax changes in the income distribution and mean reversion that plague much of the existing literature. Our main findings are the following...

  6. The Arc Elasticity of Demand: A Note and Comment.

    Science.gov (United States)

    Vaughan, Michael B.

    1988-01-01

    Examines the suitability of the traditional arc elasticity measure as a component of the economics curriculum. Demonstrates that the midpoint measure is subject to shortcomings as it invariably approaches one when price changes become large. Discusses point elasticity of demand as an alternative to the midpoint measure in the principles course.…

  7. Petroleum price

    International Nuclear Information System (INIS)

    Maurice, J.

    2001-01-01

    The oil market is the most volatile of all markets, with the exception of the Nasdaq. It is also the biggest commodity market in the world. Therefore one cannot avoid forecasting oil prices, nor can one expect to avoid the forecasting errors that have been made in the past. In his report, Joel Maurice draws a distinction between the short term and the medium-long term in analysing the outlook for oil prices. (author)

  8. Petroleum’s Price Transmission and Imported Demand for Crude Oil in Thailand

    OpenAIRE

    Papusson Chaiwat; Nantarat Tangvitoontham

    2014-01-01

    The study of the petroleum price structures in Thailand reveals that diesel is the important fuel because it influences inflation and productions’ costs. Government wants to keep diesel’s price stability; meanwhile, it is less control in gasohol and petrol prices. These prices are normally higher than diesel’s price in order to support the renewable energy and reduce the consumption behaviors. Real price elasticity of imported crude oil in short run is insignificant but in long run is about 0...

  9. Multi-factor energy price models and exotic derivatives pricing

    Science.gov (United States)

    Hikspoors, Samuel

    The high pace at which many of the world's energy markets have gradually been opened to competition have generated a significant amount of new financial activity. Both academicians and practitioners alike recently started to develop the tools of energy derivatives pricing/hedging as a quantitative topic of its own. The energy contract structures as well as their underlying asset properties set the energy risk management industry apart from its more standard equity and fixed income counterparts. This thesis naturally contributes to these broad market developments in participating to the advances of the mathematical tools aiming at a better theory of energy contingent claim pricing/hedging. We propose many realistic two-factor and three-factor models for spot and forward price processes that generalize some well known and standard modeling assumptions. We develop the associated pricing methodologies and propose stable calibration algorithms that motivate the application of the relevant modeling schemes.

  10. Computational Elastic Knots

    KAUST Repository

    Zhao, Xin

    2013-01-01

    Elastic rods have been studied intensively since the 18th century. Even now the theory of elastic rods is still developing and enjoying popularity in computer graphics and physical-based simulation. Elastic rods also draw attention from architects

  11. Symmetry in farm-retail price transmission: pork in Malaysia

    OpenAIRE

    Tey, (John) Yeong-Sheng

    2009-01-01

    This study intends to determine the farm-retail price transmission behaviors of pork in Malaysia to serve as a good implication for pork pricing system in Malaysia. Using data from January 1997 to December 2008, both the Houck and ECM approaches were found symmetric where a change in farm price of pork was observed to have similar change in retail price of pork in Malaysia. The price setting system of pork can therefore be further described by the estimated price transmission elasticities whe...

  12. Pharmaceutical pricing, price controls, and their effects on pharmaceutical sales and research and development expenditures in the European Union.

    Science.gov (United States)

    Vogel, Ronald J

    2004-08-01

    Each country in the European Union (EU) currently employs direct price controls or permutations of direct price controls, such as reference pricing or limitations on returns to capital. Some countries also use volume controls. A new proposal that is being discussed would have all of the countries in the EU adopt uniform pricing for each pharmaceutical. This paper analyzes the economic effects of free-market pricing individual-country price controls, and uniform EU price controls. Microeconomic and mathematical models were used to simulate and predict probable economic outcomes in a comparative static setting. Price controls may be in the form of price ceilings or price floors. Both forms of price control generate deadweight economic losses in the short run and long run. A uniform EU price for each pharmaceutical sold there would have elements of a price ceiling in some of the countries and of a price floor in other countries. The deadweight loss incurred would be a function of the level at which the uniform price was set by the EU and the price elasticity of demand for each pharmaceutical in each country. Economic efficiency is maximized in both the short run and long run when prices are set in freely competitive markets. An additional important dimension of Ramsey pricing within a competitive context is that it generates funds for investment in pharmaceutical research and development, which enhances economic efficiency in the long run.

  13. Marketplace pricing

    International Nuclear Information System (INIS)

    Anon.

    1991-01-01

    As discussed in this chapter, interest in marketplace pricing has been increasing in recent years, reflecting the societal trend toward substituting competition for regulation where appropriate. Competition is valuable because it encourages utilities to make efficient decisions with a minimum of regulatory intervention. It enhances efficiency through the incentive for innovation by the regulated companies and by increasing the likelihood they will come forward with proposals for better services, lower prices or both. Ultimately, consumers are beneficiaries. Marketplace pricing is emblematic of the view that the degree of regulation should reflect the degree of market power, that workably competitive markets should be allowed to operate with as little regulatory interference as possible. The Edison Electric Institute has made perhaps the most detailed proposal on marketplace pricing. It and others perceive numerous benefits from this method of pricing transmission services. Given the undeniable market power resulting from line ownership, FERC has emphasized the need to find a workably competitive market before approving such proposals. The ability to make this distinction without a full-blown antitrust review for every transaction is questionable, and FERC has yet to provide generic guidance. Finally, FERC's legal ability to depart from cost-based standards is questionable

  14. Use of Hedonic Prices to Estimate Capitalization Rate

    OpenAIRE

    Gaetano Lisi

    2015-01-01

    In this paper, a model of income capitalization is developed where hedonic prices play a key role in estimating the going-in capitalization rate. Precisely, the hedonic functions for rental and selling prices are introduced into a basic model of income capitalization. From the modified model, it is possible to derive a direct relationship between hedonic prices and capitalization rate. An advantage of the proposed approach is that estimation of the capitalization rate can be made without cons...

  15. Cigarette tax and public health: what are the implications of financially stressed smokers for the effects of price increases on smoking prevalence?

    Science.gov (United States)

    Martire, Kristy A; Mattick, Richard P; Doran, Christopher M; Hall, Wayne D

    2011-03-01

    This paper models the predicted impact of tobacco price increases proposed in the United States and Australia during 2009 on smoking prevalence in 2010 while taking account of the effects of financial stress among smokers on cessation rates. Two models of smoking prevalence were developed for each country. In model 1, prevalence rates were determined by price elasticity estimates. In model 2 price elasticity was moderated by financial stress. Each model was used to estimate smoking prevalence in 2010 in Australia and the United States. Proposed price increases resulted in a 1.89% and 7.84% decrease in smoking participation among low socio-economic status (SES) groups in the United States and Australia, respectively. Model 1 overestimated the number of individuals expected to quit in both the United States (0.13% of smokers) and Australia (0.36% of smokers) by failing to take account of the differential effects of the tax on financially stressed smokers. The proportion of low-income smokers under financial stress increased in both countries in 2010 (by 1.06% in the United States and 3.75% in Australia). The inclusion of financial stress when modelling the impact of price on smoking prevalence suggests that the population health returns of increased cigarette price will diminish over time. As it is likely that the proportion of low-income smokers under financial stress will also increase in 2010, future population-based approaches to reducing smoking will need to address this factor. © 2010 The Authors, Addiction © 2010 Society for the Study of Addiction.

  16. Effect of the 1973 oil price embargo

    International Nuclear Information System (INIS)

    Goel, R.K.; Morey, M.J.

    1993-01-01

    This paper focuses on the effect of the oil shock of 1973 on US gasoline demand by examining the price elasticities of demand before and after the 1973 embargo. Price elasticities provide useful input to the development of public policy dealing with taxation and pollution control. The extensive data used include state level observations for nearly three decades spanning 1952-80. We apply non-parametric regression methods that are more appropriate to our investigation than traditional parametric techniques. Unlike standard regression techniques, non-parametric methods neither assume a functional form for the demand relation nor restrict the distribution of the dependent variable. Our results show that the mean price elasticity of gasoline demand for the USA was - 0.243 for 1952-73 and the corresponding number for 1973-80 was - 0.576, statistically different at the 5% level of significance. The relatively higher price elasticity in the post-embargo period is consistent with the hypothesis that consumers sought substitutes and restricted their consumption in response to prices as well as social responsibility. The policy implications of these results are also discussed. (author)

  17. Elasticities for U.S. Wheat Food Use by Class

    OpenAIRE

    Marsh, Thomas L.

    2003-01-01

    We conceptualize wheat for food use as an input into flour production and derive demand functions to quantify price responsiveness and economic substitutability across wheat classes. Cost, price, and substitution elasticities are estimated for hard red winter, hard red spring, soft red wheat, soft white winter, and durum wheat. In general, hard red winter and spring wheat varieties are much more responsive to their own price than are soft wheat varieties and durum wheat. Morishima elasticitie...

  18. Can producer currency pricing models generate volatile real exchange rates?

    OpenAIRE

    Povoledo, L.

    2012-01-01

    If the elasticities of substitution between traded and nontraded and between Home and Foreign traded goods are sufficiently low, then the real exchange rate generated by a model with full producer currency pricing is as volatile as in the data.

  19. Aspects of Price Discrimination in the Monopoly

    Directory of Open Access Journals (Sweden)

    Catalin Angelo Ioan

    2012-06-01

    Full Text Available The analysis allowed the determination in general of the consumer’s surplus or of the manufacturer’s surpluss in the case of monopoly and the determination of the allocative inefficiency in relation to the situation of perfect competition. Also, we broached the price discrimination of third order, analyzing, in terms of goods elasticities, the opportunity to separate prices in the conditions of differences existing between groups of firms.

  20. Aspects of Price Discrimination in the Monopoly

    OpenAIRE

    Catalin Angelo Ioan; Gina Ioan

    2012-01-01

    The analysis allowed the determination in general of the consumer’s surplus or of the manufacturer’s surpluss in the case of monopoly and the determination of the allocative inefficiency in relation to the situation of perfect competition. Also, we broached the price discrimination of third order, analyzing, in terms of goods elasticities, the opportunity to separate prices in the conditions of differences existing between groups of firms.

  1. Price Changes, Resource Adjustments and Rational Expectations

    DEFF Research Database (Denmark)

    Hoffmann, Kira

    This study investigates the relationship between the accuracy of managerial demand expectations, resource adjustment decisions and selling price changes. In line with rational expectation theory, it is argued that managers adjust resources and selling prices differently in response to expected...... that cost elasticity is higher when a demand decrease is expected among companies with similar exposure to demand uncertainty. Overall, this implies that managerial competences in predicting future demand significantly determines firms’ profitability; especially when demand uncertainty is high...

  2. Electricity pricing

    International Nuclear Information System (INIS)

    Wijayatunga, P.D.C.

    1994-01-01

    Electricity pricing in most countries, especially in the developing world, has been determined by traditional accounting criteria where it raises revenue requirements to cover the operating costs and a return on past and future capital investments in possible power systems. The use of economic principles to improve the total economic efficiency in the electricity industry is discussed. Basic marginal cost theory, long run marginal costing (LRMC) cost categories and rating periods, marginal capacity costs, marginal energy costs, consumer costs, short run marginal costing (SRMC), marginal cost of fuel, marginal cost of network losses, market clearing price, value of unserved energy and network quality of supply cost are discussed

  3. The effects of the vegetable prices insurance on the fluctuation of price: Based on Shanghai evidences

    Science.gov (United States)

    Qu, Chunhong; Li, Huishang; Hao, Shuai; Zhang, Xuebiao; Yang, Wei

    2017-10-01

    Taking Shanghai as an example, the influence of the vegetable price insurance on the fluctuation of prices was analyzed in the article. It was found that the sequence of seasonal fluctuations characteristics of leafy vegetable prices was changed by the vegetable cost-price insurance, the period of price fluctuation was elongated from 12-to-18 months to 37 months, and the influence of random factors on the price fluctuations was reduced in some degree. There was still great space for innovation of the vegetable prices insurance system in Shanghai. Some countermeasures would be suggested to develop the insurance system to better to play the role of insurance and promote the market running more smoothly in Shanghai such as prolonging the insurance cycle, improving the price information monitoring mechanism and innovating income insurance products and so on.

  4. Asymmetric adaptations to energy price changes

    International Nuclear Information System (INIS)

    Kuper, G.H.; Van Soest, D.P.

    1999-01-01

    The effectiveness of policies to reduce the use of energy depend on the elasticity of substitution between the various inputs and on the rate of technological progress. This paper presents a theoretical model emphasising energy investment characteristics of uncertainty and irreversibility that result in testable hypotheses concerning the relative values of substitution parameters and rates of technological change in periods of high and increasing energy prices and in periods of low prices. Estimation results for a panel of sectors of the Dutch economy show that the elasticity of substitution between energy and other inputs is low in periods of low energy prices, whereas it is significantly higher in the preceding period of high and increasing energy prices. Furthermore, energy-saving technological progress in periods of high and increasing energy prices is also significantly higher than if energy prices are low and falling. The regression results suggest that, due this asymmetric response of firms to changes in energy prices, taxing energy in the current period of low energy prices will not yield substantial reductions in energy use of Dutch industry. 21 refs

  5. Invester Response to Consumer Elasticity, Nordic Energy Research

    DEFF Research Database (Denmark)

    Jensen, Stine Grenaa; Meibom, Peter; Ravn, Hans V.

    2004-01-01

    . The simulated investment decisions are taken in a stochastic, dynamic setting, where a key point is the timing of the investment decision in relation to the gathering of new information relative to the stochastic elements. Based on this, the consequences of the development in consumer price elasticity......, and it is generally assumed that the demand side has an important role in this, and increasingly so. However, since consumers have not earlier had the incentive to respond to electricity prices, no reliable estimate of demand elasticity is known. The purpose of the present study is to analyse the role of electricity...... demand elasticity for investments in new electricity production capacity. Electricity price scenarios generated with a partial equilibrium model (Balmorel) are combined with a model of investment decisions. In this, various scenarios concerning the development in the demand elasticity are used...

  6. Abusive Transfer Pricing and Economic Activity

    DEFF Research Database (Denmark)

    Nielsen, Søren Bo; Schindler, Dirk; Schjelderup, Guttorm

    This paper investigates how concealment costs of transfer pricing and the probability of detection affect transfer pricing and firm behavior. We find that transfer pricing in intermediate production factors does not affect real activity of a multinational firm if the firm’s concealment effort...... its production structure. A policy implication of the paper is that it should be preferable to condition audits on the amount of income shifted rather than on the distortion of the transfer price proper. Another policy finding is that improving the quality of tax law might be superior to higher...

  7. Transfer pricing principles in VAT Law

    DEFF Research Database (Denmark)

    Jensen, Dennis Ramsdahl

    2011-01-01

    The main part of the article is devoted to a critical analysis of the optional transfer pricing provisions in the EC VAT Directive in the light of the principle of fiscal neutrality. As an integrated part of this analysis, the VAT transfer pricing regime is considered in the light of the well......-known principles for transfer pricing in the area of income tax law, as set out in Art. 9 of the OECD Model Tax Convention. The last part of the article contains a brief discussion of to which extent it is desirable to harmonize the two tax systems´ transfer pricing rules....

  8. Institutional Variation in Enrollment of Low-Income Students

    Science.gov (United States)

    Monks, James

    2018-01-01

    Socioeconomic diversity in tertiary education has come under heightened scrutiny in the past few years. This paper estimates the relationship between prices (both sticker price and net price), financial aid policies, and selectivity on the variation of low-income students across postsecondary institutions. All three factors are significant in…

  9. Contribution of population growth to per capita income and sectoral output growth in Japan, 1880-1970.

    Science.gov (United States)

    Yamaguchi, M; Kennedy, G

    1984-09-01

    The authors measured the positive and negative contributions of population and labor force growth to the growth of per capita income and sectoral output in Japan in the 1880-1970 period. A 2-sector growth accounting model that treats population and labor growth as separate variables was used. 3 alternative methods were used: the Residual method, the Verdoorn method, and the factor augmenting rate method. The total contribution of population cum labor growth to per capita income growth tended to be negative in the 1880-1930 period and positive in the 1930-40 and 1950-70. Over the 1880-1970 period as a whole, population cum labor growth made a positive contribution to per capita income growth under the Residual method (0.35%/year), the factor augmenting rate method (0.29%/year), and the Verdoorn method (0.01%/year). In addition, population cum labor growth contributed positively to sectoral output growth. The average contribution to agricultural output growth ranged from 1.03% (Verdoorn) - 1.46%/year (factor augmenting rate), while the average contribution to nonagricultural output growth ranged from 1.22% (Verdoorn) - 1.60%/year (Residual). Although these results are dependent on the model used, the fact that all 3 methods yielded consistent results suggests that population cum labor growth did make a positive contribution to per capita income and sectoral output growth in Japan. These findings imply that in economies where the rate of technical change in agricultural and nonagricultural sectors exceeds population growth, policies that reduce agricultural elasticities may be preferable; on the other hand, policies that reduce agricultural elasticities are to be avoided in economies with low rates of technical change. Moreover, in the early stages of economic development, policies that increase agricultural income and price elasticities should be considered.

  10. Regional Relative Price Disparities and Their Driving Forces

    Directory of Open Access Journals (Sweden)

    Eu Joon Chang

    2017-09-01

    Full Text Available This paper studies the long-run behavior of relative price dispersion among cities in Korea with a special emphasis on heterogeneous transitional patterns of price level dynamics. Formal statistical tests indicate considerable evidence for rejecting the null of relative price level convergence among the majority of cities over the sample period of 1985-2015. The analysis of gravity model suggests that the effect of transportation costs on intercity price level differentials is limited, while other socioeconomic factors, such as income, input factor prices, demographic structure, and housing price growth, play key roles in accounting for persistent regional price level disparities. Individual price levels are found to be better explained by a multiple-component model, and the deviations from PPP may be attributed to distinct stochastic common trends that are characterized by income and demographic structure.

  11. Computational Elastic Knots

    KAUST Repository

    Zhao, Xin

    2013-05-01

    Elastic rods have been studied intensively since the 18th century. Even now the theory of elastic rods is still developing and enjoying popularity in computer graphics and physical-based simulation. Elastic rods also draw attention from architects. Architectural structures, NODUS, were constructed by elastic rods as a new method of form-finding. We study discrete models of elastic rods and NODUS structures. We also develop computational tools to find the equilibria of elastic rods and the shape of NODUS. Applications of elastic rods in forming torus knot and closing Bishop frame are included in this thesis.

  12. [Risk sharing methods in middle income countries].

    Science.gov (United States)

    Inotai, András; Kaló, Zoltán

    2012-01-01

    The pricing strategy of innovative medicines is based on the therapeutic value in the largest pharmaceutical markets. The cost-effectiveness of new medicines with value based ex-factory price is justifiable. Due to the international price referencing and parallel trade the ex-factory price corridor of new medicines has been narrowed in recent years. Middle income countries have less negotiation power to change the narrow drug pricing corridor, although their fair intention is to buy pharmaceuticals at lower price from their scarce public resources compared to higher income countries. Therefore the reimbursement of new medicines at prices of Western-European countries may not be justifiable in Central-Eastern European countries. Confidential pricing agreements (i.e. confidential price discounts, claw-back or rebate) in lower income countries of the European Union can alleviate this problem, as prices of new medicines can be adjusted to local purchasing power without influencing the published ex-factory price and so the accessibility of patients to these drugs in other countries. In order to control the drug budget payers tend to apply financial risk sharing agreements for new medicines in more and more countries to shift the consequences of potential overspending to pharmaceutical manufacturers. The major paradox of financial risk-sharing schemes is that increased mortality, poor persistence of patients, reduced access to healthcare providers, and no treatment reduce pharmaceutical spending. Consequently, payers have started to apply outcome based risk sharing agreements for new medicines recently to improve the quality of health care provision. Our paper aims to review and assess the published financial and outcome based risk sharing methods. Introduction of outcome based risk-sharing schemes can be a major advancement in the drug reimbursement strategy of payers in middle income countries. These schemes can help to reduce the medical uncertainty in coverage

  13. Ramsey prices in the Italian electricity market

    International Nuclear Information System (INIS)

    Bigerna, Simona; Bollino, Carlo Andrea

    2016-01-01

    In this paper, we derive optimal zonal prices in the Italian day-ahead electricity market using estimation of a complete system of hourly demand in 2010–2011. In Italy, the hourly equilibrium price for all buyers is computed as a uniform average of supply zonal prices, resulting from market splitting due to line congestion. We model ex-ante individual bids expressed by heterogeneous consumers, which are distinguished by geographical zones. Using empirical estimations, we compute demand elasticity values and new zonal prices, according to a Ramsey optimal scheme. This is a new approach in the wholesale electricity market literature, as previous studies have discussed the relative merit of zonal prices, considering only the issue of line congestion. Our results show that the optimal pricing scheme can improve welfare in the day-ahead Italian electricity market, with respect to both the existing uniform price scheme and the proposal to charge the existing supply zonal prices to the demand side. - Highlights: • We model and estimate the demand of heterogeneous buyers in the electricity market. • Transmission line congestion creates welfare distortions in the market. • We derive optimal Ramsey prices in the Italian day-ahead electricity market. • We compare optimal prices with historical ones showing how to improve welfare.

  14. Weight-based pricing in the collection of household waste. The Oostzaan case

    International Nuclear Information System (INIS)

    Linderhof, Vincent; Kooreman, Peter; Allers, Maarten; Wiersma, Doede

    2001-01-01

    This paper provides an empirical analysis of the effects of weight-based pricing in the collection of household waste. Using a comprehensive panel data set on all households in a Dutch municipality we estimate short-run as well as long-run price effects for the amounts of both compostable and non-recyclable household waste. We find significant and sizeable price effects, with the elasticity for compostable waste being four times as large as the elasticity for non-recyclable waste. Long-run elasticities are about 30% larger than short-run elasticities

  15. US energy product supply elasticities. A survey and application to the US oil market

    International Nuclear Information System (INIS)

    Dahl, Carol; Duggan, Thomas E.

    1996-01-01

    We survey studies of simple energy supply models to find the most promising technique for developing supply elasticities in the U.S. crude oil market. The two dozen studies located include direct estimates of energy supply elasticities or cost studies from which supply or reserve elasticities can be inferred. We include all available studies for all forms of energy both primary and secondary. We find direct estimates of oil supply to obtain weak results unless depletion and price expectations are included. Oil product supply elasticities vary widely across studies but appear to be elastic. Studies that estimate reserve price elasticities by computing reserve costs appear to be the most promising for estimating reserve elasticities for fossil fuel supply. Hence we apply this technique to US oil reserves and find a reserve elasticity of 1.27

  16. Energy price disparity and public welfare

    International Nuclear Information System (INIS)

    Templet, P.H.

    2001-01-01

    The differences in the price of energy to economic sectors are linked to a number of system parameters and to public welfare. There are large disparities in energy prices within states when comparing residential and industrial prices although neoclassical economics predicts one price in markets. The large disparities between the two sectors across states negatively affects the efficiency of resource allocation, creates subsidies for those getting the cheap energy and results in unequal access to energy. These in turn lead to inefficient partitioning of energy between products and waste, higher pollution, leakage of wealth and poorer energy use efficiency, i.e. high energy intensity. States with large energy price disparities between sectors have statistically higher poverty, lower incomes, more pollution and use more energy but with less efficiency. Higher energy price disparities also result in higher throughput per unit of output thus reducing the chances for sustainability and lower public welfare. 31 refs

  17. Pricing of natural gas in Kazakhstan

    International Nuclear Information System (INIS)

    Zhapargaliev, I.K.

    1996-01-01

    Two state companies are in charge of natural gas supply in Kazakhstan. They buy, transport and sell natural gas and have monopolized the industry and provoked increase of gas prices. Ministry of Oil and gas Industry proposed demonopolization. The restructuring that took place caused new distribution of tasks in the gas industry. A more competitive environment was created leading to normalization of the natural gas prices. All economic subjects were granted the right to acquire gas regardless the type of ownership. Measures implemented for reorganization of gas companies contributed to the reduction of gas transport costs and prices by 50% and to decrease of gas prices in the southern regions by 50%. Despite these measures gas prices for household sector are still unchanged and are below the import prices, the main reason being the low average household income

  18. Taxes on Sugar-Sweetened Beverages to Reduce Overweight and Obesity in Middle-Income Countries: A Systematic Review.

    Directory of Open Access Journals (Sweden)

    Sharon S Nakhimovsky

    Full Text Available The consumption of sugar-sweetened beverages (SSBs, which can lead to weight gain, is rising in middle-income countries (MICs. Taxing SSBs may help address this challenge. Systematic reviews focused on high-income countries indicate that taxing SSBs may reduce SSB consumption. Responsiveness to price changes may differ in MICs, where governments are considering the tax. To help inform their policy decisions, this review compiles evidence from MICs, assessing post-tax price increases (objective 1, changes in demand for SSBs and other products, overall and by socio-economic groups (objective 2, and effects on overweight and obesity prevalence (objective 3.We conducted a systematic review on the effectiveness of SSB taxation in MICs (1990-2016 and identified nine studies from Brazil, Ecuador, India, Mexico, Peru, and South Africa. Estimates for own-price elasticity ranged from -0.6 to -1.2, and decreases in SSB consumption ranged from 5 to 39 kilojoules per person per day given a 10% increase in SSB prices. The review found that milk is a likely substitute, and foods prepared away from home, snacks, and candy are likely complements to SSBs. A quasi-experimental study and two modeling studies also found a negative relationship between SSB prices and obesity outcomes after accounting for substitution effects. Estimates are consistent despite variation in baseline obesity prevalence and per person per day consumption of SSBs across countries studied.The review indicates that taxing SSBs will increase the prices of SSBs, especially sugary soda, in markets with few producers. Taxing SSBs will also reduce net energy intake by enough to prevent further growth in obesity prevalence, but not to reduce population weight permanently. Additional research using better survey data and stronger study designs is needed to ascertain the long-term effectiveness of an SSB tax on obesity prevalence in MICs.

  19. Taxes on Sugar-Sweetened Beverages to Reduce Overweight and Obesity in Middle-Income Countries: A Systematic Review.

    Science.gov (United States)

    Nakhimovsky, Sharon S; Feigl, Andrea B; Avila, Carlos; O'Sullivan, Gael; Macgregor-Skinner, Elizabeth; Spranca, Mark

    The consumption of sugar-sweetened beverages (SSBs), which can lead to weight gain, is rising in middle-income countries (MICs). Taxing SSBs may help address this challenge. Systematic reviews focused on high-income countries indicate that taxing SSBs may reduce SSB consumption. Responsiveness to price changes may differ in MICs, where governments are considering the tax. To help inform their policy decisions, this review compiles evidence from MICs, assessing post-tax price increases (objective 1), changes in demand for SSBs and other products, overall and by socio-economic groups (objective 2), and effects on overweight and obesity prevalence (objective 3). We conducted a systematic review on the effectiveness of SSB taxation in MICs (1990-2016) and identified nine studies from Brazil, Ecuador, India, Mexico, Peru, and South Africa. Estimates for own-price elasticity ranged from -0.6 to -1.2, and decreases in SSB consumption ranged from 5 to 39 kilojoules per person per day given a 10% increase in SSB prices. The review found that milk is a likely substitute, and foods prepared away from home, snacks, and candy are likely complements to SSBs. A quasi-experimental study and two modeling studies also found a negative relationship between SSB prices and obesity outcomes after accounting for substitution effects. Estimates are consistent despite variation in baseline obesity prevalence and per person per day consumption of SSBs across countries studied. The review indicates that taxing SSBs will increase the prices of SSBs, especially sugary soda, in markets with few producers. Taxing SSBs will also reduce net energy intake by enough to prevent further growth in obesity prevalence, but not to reduce population weight permanently. Additional research using better survey data and stronger study designs is needed to ascertain the long-term effectiveness of an SSB tax on obesity prevalence in MICs.

  20. Competition and the Reference Pricing Scheme for pharmaceuticals.

    Science.gov (United States)

    Ghislandi, Simone

    2011-12-01

    By introducing n (>1) firms with infinite cross-price elasticity (i.e. generic drugs), we explore the effects of competition on the optimal pricing strategies under a Reference Pricing Scheme (RPS). A two-stage model repeated infinite number of times is presented. When stage 1 is competitive, the equilibrium in pure strategies exists and is efficient only if the reference price (R) does not depend on the price of the branded product. When generics collude, the way R is designed is crucial for both the stability of the cartel among generics and the collusive prices in equilibrium. An optimally designed RPS must set R as a function only of the infinitely elastic side of the market and should provide the right incentives for competition. Copyright © 2011 Elsevier B.V. All rights reserved.

  1. How market structure drives commodity prices

    Science.gov (United States)

    Li, Bin; Wong, K. Y. Michael; Chan, Amos H. M.; So, Tsz Yan; Heimonen, Hermanni; Wei, Junyi; Saad, David

    2017-11-01

    We introduce an agent-based model, in which agents set their prices to maximize profit. At steady state the market self-organizes into three groups: excess producers, consumers and balanced agents, with prices determined by their own resource level and a couple of macroscopic parameters that emerge naturally from the analysis, akin to mean-field parameters in statistical mechanics. When resources are scarce prices rise sharply below a turning point that marks the disappearance of excess producers. To compare the model with real empirical data, we study the relationship between commodity prices and stock-to-use ratios in a range of commodities such as agricultural products and metals. By introducing an elasticity parameter to mitigate noise and long-term changes in commodities data, we confirm the trend of rising prices, provide evidence for turning points, and indicate yield points for less essential commodities.

  2. China's New Rural Income Support Policy: Impacts on Grain Production and Rural Income Inequality

    NARCIS (Netherlands)

    Heerink, N.; Kuiper, M.H.; Shi Xiaoping, X.

    2006-01-01

    This paper analyses the impact of agricultural tax abolition and direct income payments to grain farmers on grain production and rural inequality in China. To separate the impact of the income support measures from recent price trends for grains and inputs, and to account for differences in

  3. 77 FR 74237 - T. Rowe Price Associates, Inc., et al.; Notice of Application

    Science.gov (United States)

    2012-12-13

    ... Price Associates, Inc., et al.; Notice of Application December 7, 2012. AGENCY: Securities and Exchange... sections 12(d)(1)(A) and (B) of the Act. Applicants: T. Rowe Price Associates, Inc. (``TRP''), T. Rowe Price Institutional Income Funds, Inc. (the ``Corporation'') and T. Rowe Price Investment Services, Inc...

  4. Tiered co-payments, pricing, and demand in reference price markets for pharmaceuticals.

    Science.gov (United States)

    Herr, Annika; Suppliet, Moritz

    2017-12-01

    Health insurance companies curb price-insensitive behavior and the moral hazard of insureds by means of cost-sharing, such as tiered co-payments or reference pricing in drug markets. This paper evaluates the effect of price limits - below which drugs are exempt from co-payments - on prices and on demand. First, using a difference-in-differences estimation strategy, we find that the new policy decreases prices by 5 percent for generics and increases prices by 4 percent for brand-name drugs in the German reference price market. Second, estimating a nested-logit demand model, we show that consumers appreciate co-payment exempt drugs and calculate lower price elasticities for brand-name drugs than for generics. This explains the different price responses of brand-name and generic drugs and shows that price-related co-payment tiers are an effective tool to steer demand to low-priced drugs. Copyright © 2017 Elsevier B.V. All rights reserved.

  5. Simple Economics of the Price-Setting Newsvendor Problem

    OpenAIRE

    Michael Salinger; Miguel Ampudia

    2011-01-01

    The Lerner relationship linking the profit-maximizing price to marginal cost and the elasticity of demand generalizes to the price-setting newsvendor, and the result resolves the puzzle over the different effects of additive and multiplicative uncertainty on the solution. Multiplicative uncertainty increases the optimal price because it increases the marginal cost of a unit sold and does not affect the markup factor. Additive uncertainty has no effect on the marginal cost of a unit sold and l...

  6. Parallel Imports, Drag Price Control and Pharmaceutical Innovation

    OpenAIRE

    Ken Tabata; Testuya Shinkai; Satoru Tanaka; Makoto Okamura

    2005-01-01

    This paper examines how parallel importation influences pharmaceutical innovation and the welfare of the economy, when crossnational drug price differentials occur not only because of demand elasticity based factors, but also governmental drug price control based factors. By explicitly considering the governmental drug price control baaed factors, this paper shows that parallel importation may enhance pharmaceutical innovation, when the bargaining power of a foreign government is strong and t...

  7. Remaking the Elasticity of Consumer Wants

    DEFF Research Database (Denmark)

    Pallesen, Trine; Jenle, Rasmus Ploug

    The paper analyses a smart grid project named EcoGrid, the paper shows how a large market experiment is used to present a solution to the intermittency problem associated with wind power: How to balance supply and demand when electricity production 'follows the wind'? It is shown how electricity...... consumption is sought moved away from periods of peak consumption, and towards periods of peak production, by making consumers sensitive to ongoing changes in price. The study takes a pragmatic stance, applying concepts from the sociology of markets. The paper shows how the price elasticity of a good...

  8. The price of natural gas

    International Nuclear Information System (INIS)

    Bakhtiari, A.M.S.

    2001-01-01

    Natural gas used to be a relatively cheap primary energy source, always at a discount to crude oil (on a comparative British thermal unit basis). It gradually evolved into a major resource during the 20th century - reaching a 24 per cent share of global primary energy in 1999. In the year 2000, natural gas prices in the USA rose to unheard-of highs of 10/million US dollars Btu, ushering in a new era, with natural gas at a 120 per cent premium to crude oil. This clearly was a watershed for gas, somehow similar to the 1973-74 watershed for oil prices. And similarly, any return to the status quo-ante looks rather improbable, although a number of experts (alongside the International Energy Agency) still believe the 2000 price 'spike' to have been ''only transitory''. The consequences of higher gas prices (at a level equal to crude oil prices on a Btu basis) will be multifaceted and momentous, altering habits and uses in downstream industries and economic sectors, as well as providing added income for major gas-exporters, such as Russia, Canada and Algeria. Another potential consequence of the 2000 watershed might be to propel US standard prices (such as the 'Henry Hub' spot) to international status and gas price-setter, as the 'WTI spot' became an 'international benchmark' for crude oils in the post-1993 era. For the time being, the equality of gas and oil prices has become the new norm; but, in the longer term, a discount of crude oil relative to natural gas might be envisaged, as the latter is a cleaner fuel and emits less carbon dioxide when used. (author)

  9. Value-based differential pricing: efficient prices for drugs in a global context.

    Science.gov (United States)

    Danzon, Patricia; Towse, Adrian; Mestre-Ferrandiz, Jorge

    2015-03-01

    This paper analyzes pharmaceutical pricing between and within countries to achieve second-best static and dynamic efficiency. We distinguish countries with and without universal insurance, because insurance undermines patients' price sensitivity, potentially leading to prices above second-best efficient levels. In countries with universal insurance, if each payer unilaterally sets an incremental cost-effectiveness ratio (ICER) threshold based on its citizens' willingness-to-pay for health; manufacturers price to that ICER threshold; and payers limit reimbursement to patients for whom a drug is cost-effective at that price and ICER, then the resulting price levels and use within each country and price differentials across countries are roughly consistent with second-best static and dynamic efficiency. These value-based prices are expected to differ cross-nationally with per capita income and be broadly consistent with Ramsey optimal prices. Countries without comprehensive insurance avoid its distorting effects on prices but also lack financial protection and affordability for the poor. Improving pricing efficiency in these self-pay countries includes improving regulation and consumer information about product quality and enabling firms to price discriminate within and between countries. © 2013 The Authors. Health Economics published by John Wiley & Sons Ltd.

  10. Life time income of men and women

    DEFF Research Database (Denmark)

    Bonke, Jens

    1992-01-01

    Life-time income is estimated here including the money value of household work. A modified opportunity principle is used, which means that non-employed women's price of time is found by calculating reservation wage rates. The overall results demonstrate that Danish women's ‘loss' of labour income...... during the child caring period is difficult for them to regain, and just to reach the same level of income as childless Danish women seems impossible; furthermore Danish men get a higher life-time income than Danish women even when we add the money value of household work...

  11. Pricing and University Autonomy: Tuition Deregulation in Texas

    Directory of Open Access Journals (Sweden)

    Jeongeun Kim

    2016-04-01

    Full Text Available This paper investigates changes in tuition policies in the wake of tuition deregulation in Texas, which in 2003 transferred tuition-setting authority from the state legislature to institutions. We find that price increases accelerated, particularly at the most selective institutions. Institutions also began differentiating price by undergraduate program, raising relative prices for the most costly and lucrative majors, including engineering, business, nursing, and architecture. Price increases were particularly large for institutions with the highest initial costs and for programs with a high earnings premium within institutions, though lower for institutions with more low-income students. These distinctions suggest that public postsecondary institutions respond to microeconomic incentives when given greater autonomy to set price, and take some measures to alleviate impacts on low-income students. The Texas experience suggests that decentralized price-setting generates greater price differentiation within the public higher education system, both across and within institutions.

  12. On the demand for prescription drugs: heterogeneity in price responses.

    Science.gov (United States)

    Skipper, Niels

    2013-07-01

    This paper estimates the price elasticity of demand for prescription drugs using an exogenous shift in consumer co-payment caused by a reform in the Danish subsidy scheme for the general public. Using purchasing records for the entire Danish population, I show that the average price response for the most commonly used drug yields demand elasticities in the range of -0.36 to -0.5. The reform is shown to affect women, the elderly, and immigrants the most. Furthermore, this paper shows significant heterogeneity in the price response over different types of antibiotics, suggesting that the price elasticity of demand varies considerably even across relatively similar drugs. Copyright © 2012 John Wiley & Sons, Ltd.

  13. The cause and effect of exclusionary zoning within a jurisdiction, and, The stockpile of petroleum needed to contain OPEC's price shocks

    Science.gov (United States)

    Vatter, Marc H.

    In Part I, I model a jurisdiction where residents differ by income, and housing confers benefits on neighbors. By majority vote, residents choose minima on consumption of housing that differ by neighborhood, and they separate into neighborhoods by income. In practice, such laws take the form of minimum lot sizes, bans on multi-family units, building codes, and other restrictions. This policy maximizes a benefit-cost welfare criterion. Alternative policies include no minima and a uniform minimum citywide, based on libertarian and utilitarian welfare criteria, respectively. I compare the policies in terms of efficiency, implementability, and distributional consequences, and give numerical examples based on U.S. data. Willingness to pay for the benefit-cost optimum is convex in income. This helps to explain why neighborhood stratification by income has outpaced stratification of income itself in U.S metropolitan areas since 1970. In the examples, gains to a rich household are in the thousands and losses to the poor in the hundreds of dollars annually. In Part II, I estimate the stockpile of petroleum sufficient to contain a price shock perpetrated by the OPEC. I estimate world demand for petroleum such that the long run price elasticity exceeds that in the short run, and supply from non-OPEC producers with a similar kind of lagged response. Given this structure for elasticities, OPEC profits from sudden increases in price. I simulate interaction among consumers, non-OPEC producers, OPEC, and an International Energy Agency (IEA) that punishes OPEC by releasing oil onto the market. I endow the IEA with increasingly large stockpiles until they suffice to limit price shocks to specified levels. Every 5 reduction in the shock raises present-valued world GDP by about 650 billion. The IEA now has 1.4 billion barrels of petroleum, including 700 million in the U.S. Strategic Petroleum Reserve. A 3 billion barrel stockpile would suffice to reduce a 35 price shock to 20, raising

  14. Price Analysis of Railway Freight Transport under Marketing Mechanism

    Science.gov (United States)

    Shi, Ying; Fang, Xiaoping; Chen, Zhiya

    Regarding the problems in the reform of the railway tariff system and the pricing of the transport, by means of assaying the influence of the price elasticity on the artifice used for price, this article proposed multiple regressive model which analyzed price elasticity quantitatively. This model conclude multi-factors which influences on the price elasticity, such as the averagely railway freight charge, the averagely freight haulage of proximate supersede transportation mode, the GDP per capita in the point of origin, and a series of dummy variable which can reflect the features of some productive and consume demesne. It can calculate the price elasticity of different classes in different domains, and predict the freight traffic volume on different rate levels. It can calculate confidence-level, and evaluate the relevance of each parameter to get rid of irrelevant or little relevant variables. It supplied a good theoretical basis for directing the pricing of transport enterprises in market economic conditions, which is suitable for railway freight, passenger traffic and other transportation manner as well. SPSS (Statistical Package for the Social Science) software was used to calculate and analysis the example. This article realized the calculation by HYFX system(Ministry of Railways fund).

  15. Energy prices and taxes

    International Nuclear Information System (INIS)

    2004-01-01

    Energy Prices and Taxes contains a major international compilation of energy prices at all market levels: import prices, industry prices and consumer prices. The statistics cover main petroleum products, gas, coal and electricity, giving for imported products an average price both for importing country and country of origin. Every issue includes full notes on sources and methods and a description of price mechanisms in each country

  16. MARKET ECONOMICS PRICING PARTICULARS

    Directory of Open Access Journals (Sweden)

    V. I. Parshin

    2011-01-01

    Full Text Available The price performs several economic functions: accounting, stimulation, distribution, demand and offer balancing, serving as production site rational choice criterion, information. Most important pricing principles are: price scientific and purpose-aimed substantiation, single pricing and price control process. Pricing process factors are external, internal, basic (independent on money-market, market-determined and controlling. Different pricing methods and models are to be examined, recommendations on practical application of those chosen are to be written.

  17. In search of a corrected prescription drug elasticity estimate: a meta-regression approach.

    Science.gov (United States)

    Gemmill, Marin C; Costa-Font, Joan; McGuire, Alistair

    2007-06-01

    An understanding of the relationship between cost sharing and drug consumption depends on consistent and unbiased price elasticity estimates. However, there is wide heterogeneity among studies, which constrains the applicability of elasticity estimates for empirical purposes and policy simulation. This paper attempts to provide a corrected measure of the drug price elasticity by employing meta-regression analysis (MRA). The results indicate that the elasticity estimates are significantly different from zero, and the corrected elasticity is -0.209 when the results are made robust to heteroskedasticity and clustering of observations. Elasticity values are higher when the study was published in an economic journal, when the study employed a greater number of observations, and when the study used aggregate data. Elasticity estimates are lower when the institutional setting was a tax-based health insurance system.

  18. Estimation of demand response to energy price signals in energy consumption behaviour in Beijing, China

    International Nuclear Information System (INIS)

    He, Y.X.; Liu, Y.Y.; Xia, T.; Zhou, B.

    2014-01-01

    Highlights: • Demand response to energy price signals in energy consumption in Beijing is studied. • The electricity price is of great importance to Beijing’s energy market stability. • Industrial sectors have a large electricity self-elasticity and cross-elasticity. • When consuming electricity, customers pay more attention to natural gas price. • Analysis of demand response to energy price can provide guidance to energy policies. - Abstract: The energy price system in Beijing has not fully exploited customers’ price elasticity, and has a negative impact on achieving the goals of energy saving. This paper analyses the response behaviours of different customers to typical energy prices. As for electricity self-elasticity, the range of the primary, secondary, tertiary industry and residents are −0.026 to −0.033, −0.045 to −0.059, −0.035 to −0.047 and −0.024 to −0.032, respectively. As regards self-elasticity on coal, the range of the primary, secondary, tertiary industry and residents are −0.030 to −0.037, −0.066 to −0.093, −0.055 to −0.072 and −0.034 to −0.051, respectively. The self-elasticities on oil and natural gas are very weak. As for cross-elasticity, when consuming electricity and oil, customers mainly focus on the prices of natural gas, which are 0.185 and 0.112. When consuming coal and natural gas, customers are concerned about the electricity prices, and their cross-elasticities are 0.03 and 0.36, respectively. The estimation of demand response to energy price signals in energy consumption behaviours can provide a decision support for formulating rational energy price policies

  19. Think Again: Higher Elasticity of Substitution Increases Economic Resilience

    OpenAIRE

    P. Dumas; S. Hallegatte

    2009-01-01

    This paper shows that, counter-intuitively, a higher elasticity of substitution in model production function can lead to reduced economic resilience and larger vulnerability to shocks in production factor prices. This result is due to the fact that assuming a higher elasticity of substitution requires a recalibration of the production function parameters to keep the model initial state unchanged. This result has consequences for economic analysis, e.g., on the economic vulnerability to climat...

  20. Experimental Analysis on Autonomic Strategies for Cloud Elasticity

    OpenAIRE

    Dupont , Simon; Lejeune , Jonathan; Alvares , Frederico; Ledoux , Thomas

    2015-01-01

    International audience; In spite of the indubitable advantages of elasticity in Cloud infrastructures, some technical and conceptual limitations are still to be considered. For instance , resource start up time is generally too long to react to unexpected workload spikes. Also, the billing cycles' granularity of existing pricing models may incur consumers to suffer from partial usage waste. We advocate that the software layer can take part in the elasticity process as the overhead of software...

  1. Elastic scattering and quasi-elastic transfers

    International Nuclear Information System (INIS)

    Mermaz, M.C.

    1978-01-01

    Experiments are presented which it will be possible to carry out at GANIL on the elastic scattering of heavy ions: diffraction phenomena if the absorption is great, refraction phenomena if absorption is low. The determination of the optical parameters can be performed. The study of the quasi-elastic transfer reactions will make it possible to know the dynamics of the nuclear reactions, form exotic nuclei and study their energy excitation spectrum, and analyse the scattering and reaction cross sections [fr

  2. Regional electric power demand elasticities of Japan's industrial and commercial sectors

    International Nuclear Information System (INIS)

    Hosoe, Nobuhiro; Akiyama, Shu-ichi

    2009-01-01

    In the assessment and review of regulatory reforms in the electric power market, price elasticity is one of the most important parameters that characterize the market. However, price elasticity has seldom been estimated in Japan; instead, it has been assumed to be as small as 0.1 or 0 without proper examination of the empirical validity of such a priori assumptions. We estimated the regional power demand functions for nine regions, in order to quantify the elasticity, and found the short-run price elasticity to be 0.09-0.30 and the long-run price elasticity to be 0.12-0.56. Inter-regional comparison of our estimation results suggests that price elasticity in rural regions is larger than that in urban regions. Popular assumptions of small elasticity of 0.1, for example, could be suitable for examining Japan's aggregate power demand but not power demand functions that focus on respective regions. Furthermore, assumptions about smaller elasticity values such as 0.01 and 0 could not be supported statistically by this study.

  3. Regional electric power demand elasticities of Japan's industrial and commercial sectors

    Energy Technology Data Exchange (ETDEWEB)

    Hosoe, Nobuhiro [National Graduate Institute for Policy Studies, 7-22-1 Roppongi, Minato, Tokyo 106-8677 (Japan); Akiyama, Shu-ichi [Kushiro Public University of Economics, 4-1-1 Ashino, Kushiro, Hokkaido 085-8585 (Japan)

    2009-11-15

    In the assessment and review of regulatory reforms in the electric power market, price elasticity is one of the most important parameters that characterize the market. However, price elasticity has seldom been estimated in Japan; instead, it has been assumed to be as small as 0.1 or 0 without proper examination of the empirical validity of such a priori assumptions. We estimated the regional power demand functions for nine regions, in order to quantify the elasticity, and found the short-run price elasticity to be 0.09-0.30 and the long-run price elasticity to be 0.12-0.56. Inter-regional comparison of our estimation results suggests that price elasticity in rural regions is larger than that in urban regions. Popular assumptions of small elasticity of 0.1, for example, could be suitable for examining Japan's aggregate power demand but not power demand functions that focus on respective regions. Furthermore, assumptions about smaller elasticity values such as 0.01 and 0 could not be supported statistically by this study. (author)

  4. Transfer pricing rules in EU member states

    Directory of Open Access Journals (Sweden)

    Veronika Solilová

    2010-01-01

    Full Text Available One of the important area of international taxes is transfer pricing. Transfer price is a price set by a taxpayer when selling to, buying from, or sharing resources with a related (associated person. The tran­sac­tions between these persons should be assessed at their arm’s length price in according the arm’s length principle – international accepted standard – as the price which would have been agreed between unrelated parties in free market conditions. This paper is focused on the tranfer pricing rules used in particular EU Member States so as if EU Member States apply the arm’s length principle, define the related persons, apply recommendations of the OECD Guidelines, use the transfer pricing methods, require TP Documentation, exercise specific transfer pricing audit or impose specific penalties and apply APAs. Transfer pricing rules should prevent taxpayers from shifting income to related person organized in tax havens or in countries where they enjoy some special tax benefit.

  5. Derivative markets, speculation and oil prices

    International Nuclear Information System (INIS)

    Babusiaux, D.; Lasserre, F.; Pierru, A.

    2010-01-01

    Recent movements in oil prices have been ascribed by a number of analysts and political leaders not to market fundamentals but to the speculative positions taken by financial investors in derivatives markets. Various economists including Nobel Prize Paul Krugman believe however that the constitution of stocks is a necessary element for speculation, a feature that was not very evident during the sudden price increase in 2008; but these points of view are not entirely incompatible. Various explanations can be put forward, among which the most important is demand inertia. On the very short run, demand price elasticity is significantly lower than that usually calculated for the short term, which can significantly reduce the impact - on stocks - of a temporary price increase provoked by financial investors' behavior. (authors)

  6. Short- and long-run elasticities in energy demand

    International Nuclear Information System (INIS)

    Bentzen, J.; Engsted, T.

    1993-01-01

    Short- and long-run energy demand elasticities are estimated on Danish annual data for 1948-90. Energy consumption, the real price of energy and real GDP appear to be non-stationary variables. Cointegration and error-correction methods are therefore applied. All estimated parameters have the expected signs and magnitudes and no evidence is found of a structural break in energy demand caused by the increases in real energy prices since 1973/74. (author)

  7. Immigration, Real Estate Prices and the Consumption Decisions of Native Households

    OpenAIRE

    Adams, Zeno; Blickle, Kristian

    2016-01-01

    Since house prices govern the consumption decisions of renters and owners alike, changing house prices can have far-reaching macroeconomic consequences. We analyze how the disposable income and consumption decisions of households are affected by exogenous house price changes in Switzerland. We look at consumption of both housing and non-durable goods to establish a comprehensive picture. We ensure that our house price variation is exogenous by instrumenting house prices with origin-shift immi...

  8. Distributional incidence of green electricity price subsidies in China

    International Nuclear Information System (INIS)

    Wang, Feng; Zhang, Bing

    2016-01-01

    Distributional incidences are fundamental to environmental and energy policies, a condition that has led to controversies on the equity of environmental and energy policy. Using data from China's Urban Household Income and Expenditure Survey data from 2007, this study quantified the distributional effects of the green electricity price subsidy policy among Chinese urban household and compared its effects by using lifetime income and annual income to classify households, respectively. The results show that total electricity subsidies are mainly driven by indirect electricity subsidies. By using lifetime income to classify households, subsidies to households in the poorest two groups accounted for less than 10.2% of the total subsidies, whereas money distributed to households in the top two deciles reached 35.4%. The comparison using annual income to group households also demonstrated the similar impact of the green electricity price subsidy policy. China’s future market reforms should allow electricity prices to reflect pollution abatement costs. Additionally, a multi-step block electricity price schedule can reduce the regressivity of the policy. - Highlights: • We quantified the distributional effects of the green electricity price subsidy. • The distributional effects of different income groups were compared. • The poorest two groups accounted for less than 10.2% of the total subsidies. • The green electricity price subsidy policy benefited the rich at household level.

  9. 24 CFR 235.320 - Limitation of sales price.

    Science.gov (United States)

    2010-04-01

    ... 24 Housing and Urban Development 2 2010-04-01 2010-04-01 false Limitation of sales price. 235.320 Section 235.320 Housing and Urban Development Regulations Relating to Housing and Urban Development... Payments-Homes for Lower Income Families § 235.320 Limitation of sales price. To qualify for assistance...

  10. ElasticSearch cookbook

    CERN Document Server

    Paro, Alberto

    2013-01-01

    Written in an engaging, easy-to-follow style, the recipes will help you to extend the capabilities of ElasticSearch to manage your data effectively.If you are a developer who implements ElasticSearch in your web applications, manage data, or have decided to start using ElasticSearch, this book is ideal for you. This book assumes that you've got working knowledge of JSON and Java

  11. Pricing and Trust

    DEFF Research Database (Denmark)

    Huck, Steffen; Ruchala, Gabriele K.; Tyran, Jean-Robert

    -competitive (monopolistic) markets. We then introduce a regulated intermediate price above the oligopoly price and below the monopoly price. The effect in monopolies is more or less in line with standard intuition. As price falls volume increases and so does quality, such that overall efficiency is raised by 50%. However......We experimentally examine the effects of flexible and fixed prices in markets for experience goods in which demand is driven by trust. With flexible prices, we observe low prices and high quality in competitive (oligopolistic) markets, and high prices coupled with low quality in non...

  12. Viewpoint On the Climate Change Effects of High Oil Prices

    International Nuclear Information System (INIS)

    Vielle, M.; Viguier, L.

    2005-11-01

    Some commentators claim that the oil market has achieved within a few months what international bureaucrats have struggled to obtain in a decade of international climate negotiations. The fallacy of the oil price argument is that substitutions and income effects that would result from higher oil prices are not considered. Using a computable general equilibrium model, we show that high oil prices cannot serve as substitutes for effective climate policies.

  13. 7 CFR 1000.50 - Class prices, component prices, and advanced pricing factors.

    Science.gov (United States)

    2010-01-01

    ... 7 Agriculture 9 2010-01-01 2009-01-01 true Class prices, component prices, and advanced pricing... advanced pricing factors. Class prices per hundredweight of milk containing 3.5 percent butterfat, component prices, and advanced pricing factors shall be as follows. The prices and pricing factors described...

  14. Sociodemographic differences in fast food price sensitivity

    Science.gov (United States)

    Meyer, Katie A.; Guilkey, David K.; Ng, Shu Wen; Duffey, Kiyah J.; Popkin, Barry M.; Kiefe, Catarina I.; Steffen, Lyn M.; Shikany, James M.; Gordon-Larsen, Penny

    2014-01-01

    Importance Fiscal food policies (e.g., taxation) are increasingly proposed to improve population-level health, but their impact on health disparities is unknown. Objective We estimated subgroup-specific effects of fast food price changes on fast food consumption and cardio-metabolic outcomes, hypothesizing inverse associations between fast food price with fast food consumption, BMI, and insulin resistance and stronger associations among blacks (vs. whites) and participants with relatively lower education or income. Design 20-year follow-up (5 exams) in a biracial U.S. prospective cohort: Coronary Artery Risk Development in Young Adults (CARDIA) (1985/86–2005/06, baseline n=5,115). Participants Aged 18–30 at baseline; designed for equal recruitment by race (black/white), educational attainment, age, and gender. Exposures Community-level price data from the Council for Community and Economic Research (C2ER) temporally- and geographically-linked to study participants’ home address at each exam. Main outcome and measures Participant-reported number of fast food eating occasions per week; BMI (kg/m2) from clinical assessment of weight and height; homeostatic model assessment insulin resistance (HOMA-IR) from fasting glucose and insulin. Covariates included individual- and community-level social and demographic factors. Results In repeated measures regression, multivariable-adjusted associations between fast food price and consumption were non-linear (quadratic, pconsumption at higher prices; estimates varied according to race (interaction term p=0.04), income (p=0.07), and education (p=0.03). For example, at the 10th percentile of price ($1.25/serving), blacks and whites had mean fast food consumption (times/week) of 2.2 (95% CI: 2.1–2.3) and 1.6 (1.5–1.7), respectively, while at the 90th percentile of price ($1.53/serving), respective mean consumption estimates were 1.9 (1.8–2.0) and 1.5 (1.4–1.6). We observed differential price effects on HOMA

  15. Tiered gasoline pricing: A personal carbon trading perspective

    International Nuclear Information System (INIS)

    Li, Yao; Fan, Jin; Zhao, Dingtao; Wu, Yanrui; Li, Jun

    2016-01-01

    This paper proffers a tiered gasoline pricing method from a personal carbon trading perspective. An optimization model of personal carbon trading is proposed, and then, an equilibrium carbon price is derived according to the market clearing condition. Based on the derived equilibrium carbon price, this paper proposes a calculation method of tiered gasoline pricing. Then, sensitivity analyses and consumers' surplus analyses are conducted. It can be shown that a rise in gasoline price or a more generous allowance allocation would incur a decrease in the equilibrium carbon price, making the first tiered price higher, but the second tiered price lower. It is further verified that the proposed tiered pricing method is progressive because it would relieve the pressure of the low-income groups who consume less gasoline while imposing a greater burden on the high-income groups who consume more gasoline. Based on these results, implications, limitations and suggestions for future studies are provided. - Highlights: • Tiered gasoline pricing is calculated from the perspective of PCT. • Consumers would be burdened with different actual gasoline costs. • A specific example is provided to illustrate the calculation of TGP. • The tiered pricing mechanism is a progressive system.

  16. Pricing strategy for aesthetic surgery: economic analysis of a resident clinic's change in fees.

    Science.gov (United States)

    Krieger, L M; Shaw, W W

    1999-02-01

    The laws of microeconomics explain how prices affect consumer purchasing decisions and thus overall revenues and profits. These principles can easily be applied to the behavior aesthetic plastic surgery patients. The UCLA Division of Plastic Surgery resident aesthetics clinic recently offered a radical price change for its services. The effects of this change on demand for services and revenue were tracked. Economic analysis was applied to see if this price change resulted in the maximization of total revenues, or if additional price changes could further optimize them. Economic analysis of pricing involves several steps. The first step is to assess demand. The number of procedures performed by a given practice at different price levels can be plotted to create a demand curve. From this curve, price sensitivities of consumers can be calculated (price elasticity of demand). This information can then be used to determine the pricing level that creates demand for the exact number of procedures that yield optimal revenues. In economic parlance, revenues are maximized by pricing services such that elasticity is equal to 1 (the point of unit elasticity). At the UCLA resident clinic, average total fees per procedure were reduced by 40 percent. This resulted in a 250-percent increase in procedures performed for representative 4-month periods before and after the price change. Net revenues increased by 52 percent. Economic analysis showed that the price elasticity of demand before the price change was 6.2. After the price change it was 1. We conclude that the magnitude of the price change resulted in a fee schedule that yielded the highest possible revenues from the resident clinic. These results show that changes in price do affect total revenue and that the nature of these effects can be understood, predicted, and maximized using the tools of microeconomics.

  17. Price, availability and affordability of medicines

    Directory of Open Access Journals (Sweden)

    Brenda S. Mhlanga

    2014-01-01

    Full Text Available Background: Medicines play an important role in healthcare, but prices can be a barrier to patient care. Few studies have looked at the prices of essential medicines in low- and middle-income countries in terms of patient affordability.Aim: To determine the prices, availability and affordability of medicines along the supply chain in Swaziland.Setting: Private- and public-sector facilities in Manzini, Swaziland.Methods: The standardised methodology designed by the World Health Organization and Health Action International was used to survey 16 chronic disease medicines. Data were collected in one administrative area in 10 private retail pharmacies and 10 public health facilities. Originator brand (OB and lowest-priced generic equivalent (LPG medicines were monitored and these prices were then compared with international reference prices (IRPs. Affordability was calculated in terms of the daily wage of the lowest-paid unskilled government worker.Results: Mean availability was 68% in the public sector. Private sector OB medicines were priced 32.4 times higher than IRPs, whilst LPGs were 7.32 times higher. OBs cost473% more than LPGs. The total cumulative mark-ups for individual medicines range from 190.99% – 440.27%. The largest contributor to add-on cost was the retail mark-up (31% – 53%. Standard treatment with originator brands cost more than a day’s wage.Conclusion: Various policy measures such as introducing price capping at all levels of the medicine supply chain, may increase the availability, whilst at the same time reducing the prices of essential medicines for the low income population.

  18. Price, availability and affordability of medicines

    Directory of Open Access Journals (Sweden)

    Brenda S. Mhlanga

    2014-06-01

    Full Text Available Background: Medicines play an important role in healthcare, but prices can be a barrier to patient care. Few studies have looked at the prices of essential medicines in low- and middle-income countries in terms of patient affordability. Aim: To determine the prices, availability and affordability of medicines along the supply chain in Swaziland. Setting: Private- and public-sector facilities in Manzini, Swaziland. Methods: The standardised methodology designed by the World Health Organization and Health Action International was used to survey 16 chronic disease medicines. Data were collected in one administrative area in 10 private retail pharmacies and 10 public health facilities. Originator brand (OB and lowest-priced generic equivalent (LPG medicines were monitored and these prices were then compared with international reference prices (IRPs. Affordability was calculated in terms of the daily wage of the lowest-paid unskilled government worker. Results: Mean availability was 68% in the public sector. Private sector OB medicines were priced 32.4 times higher than IRPs, whilst LPGs were 7.32 times higher. OBs cost473% more than LPGs. The total cumulative mark-ups for individual medicines range from 190.99% – 440.27%. The largest contributor to add-on cost was the retail mark-up (31% – 53%. Standard treatment with originator brands cost more than a day’s wage. Conclusion: Various policy measures such as introducing price capping at all levels of the medicine supply chain, may increase the availability, whilst at the same time reducing the prices of essential medicines for the low income population.

  19. Competitive Pricing by a Price Leader

    OpenAIRE

    Abhik Roy; Dominique M. Hanssens; Jagmohan S. Raju

    1994-01-01

    We examine the problem of pricing in a market where one brand acts as a price leader. We develop a procedure to estimate a leader's price rule, which is optimal given a sales target objective, and allows for the inclusion of demand forecasts. We illustrate our estimation procedure by calibrating this optimal price rule for both the leader and the follower using data on past sales and prices from the mid-size sedan segment of the U.S. automobile market. Our results suggest that a leader-follow...

  20. ACCOUNTING ASPECTS OF PRICING AND TRANSFER PRICING

    Directory of Open Access Journals (Sweden)

    TÜNDE VERES

    2011-01-01

    Full Text Available The pricing methods in practice need really complex view of the business situation and depend on the strategy and market position of a company. The structure of a price seems simple: cost plus margin. Both categories are special area in the management accounting. Information about the product costs, the allocation methodologies in cost accounting, the analyzing of revenue and different level of the margin needs information from accounting system. This paper analyzes the pricing methods from management accounting aspects to show out the role of the accounting system in the short term and long term pricing and transfer pricing decisions.