Determinants of food consumption in rural Sierra Leone: Application of the quadratic expenditure system to the consumption-leisure component of a household-firm model

This paper reports the application of a quadratic expenditure system with demographic variables to the household consumption-leisure choice component of a household-firm model. A system of seven commodities is estimated: including five foods, non-food and leisure. Appropriate for such a level of disaggregation a demand system is used, the Quadratic Expenditure System, which allows for a flexible relationship between full income and commodity expenditures without sacrificing parsimony in parameters. Demographic data on households are explicitly incorporated into the model allowing for a richer specification than can be achieved by using per capita variables. The data are from a cross-section survey of households in rural Sierra Leone. Price variation exists by region, permitting estimation of a complete demand system. Engel curves are found to be significantly non-linear, with marginal expenditure on rice, the major staple, declining with higher income. Most foods are found to be reasonably price responsive with sizeable own price substitution effects, declining with higher income. Aggregate labor supply is found to be price inelastic.     

Dynamic almost ideal demand systems: an empirical analysis of alcohol expenditure in Ireland

This paper presents a dynamic form of the Almost Ideal Demand System (AIDS). Three versions of the static AIDS model are employed to determine the preferred long-run equilibrium model and represents the short-run dynamics by an error correction mechanism. This estimation procedure is then applied to alcohol expenditure in Ireland. The estimated point elasticities are consistent with previous studies and a priori expectations. Beer and spirits are found to be price inelastic in both the short and long run. While wine is price inelastic in the short run and price elastic in the long run.     

Information And Communication Technology And The Measurement Of Volume Output And Final Demand - A Five-Country Study

Information and communication technology (ICT) products have undergone rapid technical change. Where quality improvements occur, they should be reflected in official price and quantity indices, otherwise there is a tendency to over-estimate price movements and under-estimate volume changes of ICT products. Statistical offices deal with this issue but the degree and nature of quality-adjustment of price indices of ICT products varies considerably between OECD countries. The present study simulates measurement effects on key economic variables (real output, private final consumption, government expenditure, investment, exports and imports) and productivity, under the assumption that the price indices of ICT products are fully quality-adjusted. The paper draws on a large selection of empirical studies to identify differences between quality-adjusted and unadjusted price changes and uses detailed information from input-output tables to assess their weights in final demand. Effects on GDP and its components are quantified for five selected OECD countries.     

经济增长中非经济性公共物品需求分析

利用2003—2010年我国29个省(自治区、直辖市)的面板数据,对教育支出、医疗卫生支出、科技支出、社会保障补助支出和环境保护支出五类非经济性公共物品支出需求函数进行了估计,实证检验了与公共支出需求相关的因素。结果显示:非经济性公共物品需求与人均收入、人口规模和城市化率正相关;在温饱问题解决后,随着居民收入的增加,即使居民的税收负担有所上升,居民对教育、医疗和科技的需求也会不断增加;失业率的上升会减少居民对教育、科技和医疗的需求,但会增加对社会保障的需求;环境保护关系到城市的可持续发展,产业结构调整可能有助于缓解环境保护支出与需求的矛盾。     

The US retail demand for fish products: an application of the almost ideal demand system

The main objective is to address the limitations of past US fish demand research through the development of a variation of the almost ideal demand system model for disaggregate fish products at the retail level. Price and expenditure elasticities, as well as elasticities of substitution between fish products and other protein commodities, determined from this work may be used in the context of fisheries management and market development and promotion. Results indicate that with the exception of shellfish, demand for the various fish products is relatively inelastic. Cross-price elasticities are generally moderate while expenditure elasticities are large and positive for fresh fish and shellfish. Demographic effects, especially geographical division, season, race, occupation, age–sex household composition, and price–income interaction, as a proxy for quality, are highly significant variables.     

The effects of oil price shocks on expenditure category CPI

In this study, we apply a two-block structural vector autoregressive (VAR) model proposed by Kilian and Park (2009) in order to investigate the dynamic effects of changes in oil price on the expenditure category consumer price index (CPI) in the United States and Japan. Our results confirm that each expenditure category price index responded very differently to the same structural shock, and that whether changes in oil price function as a positive stimulus or a negative shock for the individual expenditure category prices also depends on the kind of underlying shock that drives the changes in oil price. Finally, our results also reveal that the manner in which changes in oil price affect each expenditure category price differs between the United States and Japan and these detailed-level differences may lead to aggregate-level differences in the price response of both countries to changes in oil price.     

Examining energy poverty in Chinese households: An Engel curve approach

This article is first to model energy poverty in Chinese households using an Engel curve approach. To analyse the determinants of energy poverty and energy expenditures across households, we avail the 2015 wave of the Chinese General Social Survey (CGSS). Possible presence of endogeneity is accounted for in the model specification as well as by using the Lewbel heteroscedasticity identified endogenous variables estimator. In addition, we are the first to scrutinise disparity and discrimination by conducting the Blinder–Oaxaca decomposition of energy poverty model by gender, ethnicity, region (Eastern vs. non-Eastern provinces), and urbanisation status (rural vs. urban residents). Our analysis shows: (i) education is the key determinant of various energy poverty measures and energy expenditure shares across Chinese households; (ii) other determinants including fossil fuel mix and electricity price discrimination are found to worsen energy poverty, on average. However, fossil fuel mix is found to increase expenditure share of total energy, electricity, and coal and decrease that of biomass; and (iii) the Blinder–Oaxaca decomposition analyses show no statistically significant gender or ethnic discrimination in energy poverty rates. However, there is substantial divide between Eastern and non-Eastern provinces and between rural and urban households—with these groups also discriminated against when accessing clean cooking fuels and technologies. The Blinder–Oaxaca results also generally support the logistic and the Lewbel energy poverty model findings.     

Economic and other determinants of infant and child mortality in small developing countries: the case of Central America and the Caribbean

Inter-country differences in infant and child mortality are explained by looking at demographic, economic, health and educational factors. A model is presented in which the infant mortality rate, the child mortality rate, and the birth rate are endogenous. The model is tested using cross-national multiple regression analysis and simulations. The presence of simultaneity is confirmed. Introducing non-economic factors transforms the character of the relationship between exogenous and endogenous variables, from a 'diminishing returns' to an 'increasing returns' one. The role played by public expenditure in education, vaccination coverage, low birth weight, female schooling, number of nurses, access to safe water, or malnutrition can be assessed, as well as that played by 'structural adjustment' variables such as the inflation rate or the external debt to GNP ratio. Infant and child mortality can be diminished everywhere in the region with relatively small amounts of expenditure. Disappointing outcomes in some countries obey political rather than economic problems. It would be a mistake to blame the debt crisis.     

Conditional and unconditional food demand elasticities in a dynamic multistage demand system

This paper estimates conditional and unconditional demand elasticities in a three stage analysis of consumer demand for food and non-food items in Greece. A dynamic version of the AIDS model is specified and estimated, and full system misspecification tests applied. Correction formulas for price and expenditure elasticities are used to calculate unconditional elasticities from conditional demand sub-systems. All food items rank as price inelastic. Deviations between the calculated conditional and unconditional price and expenditure elasticities are found to be significant, demonstrating the importance of correcting conditional elasticities before they can be used for policy purposes or welfare analyses.     

New panel results on cointegration of international health expenditure and GDP

This article tests for existence of cointegration between health expenditure and GDP using data from 25 OECD countries for the period 19607ndash;1997. The empirical modelling is based on a heterogeneous bivariate vector error correction panel model that allows for trending data as well as intercepts and trends in the cointegrating relations. Univariate country-by-country and panel unit root tests generally fail to reject the null of a unit root in the health expenditure and GDP variables. Country-by-country results based on the Johansen multivariate likelihood-based inference indicate somewhat mixed results on country-specific cointegration with a rank of one found for 12 countries and a rank of zero for the remaining 13 countries. Application of a new panel test for cointegration rank with higher power than the individual tests indicates that health expenditure and GDP are cointegrated around linear trends.     

The housing market,macroeconomic activity and fiancial innovation: an empirical analysis of US data

Recently, several studies have emphasized the role of R&D expenditure in determining Total Factor Productivity (TFP). In this paper it is shown that the relationship between R&D variables and TFP is far from being established. In particular, by using data for the Italian economy, it is found that the estimated effects of R&D variables on TFP crucially depends on: (i) the way in which the production function, used to derive Solow residuals, is defined; (ii) the numbers of maintained hypotheses used to estimate Solow residuals; (iii) the level of aggregation of the data employed in the empirical analysis.     

Generalized cointegration: a new concept with an application to health expenditure and health outcomes

We propose a new generalization of the concept of cointegration that allows for the possibility that a set of variables are involved in an unknown nonlinear relationship. Although these variables may be unit-root non-stationary, there exists a nonlinear combination of them that takes account of such non-stationarity. We then introduce an estimation technique that allows us to test for the presence of this generalized cointegration in the absence of knowledge as to the true nonlinear functional form and the full set of regressors. We outline the basic stages of the technique and discuss how the issue of unit-root non-stationarity and cointegration affects each stage of the estimation procedure. We then apply this technique to the relationship between health expenditure and health outcomes, which is an important but controversial issue. A number of studies have found very little or no relationship between the level of health expenditure and outcomes. In econometric terms, if there is such a relationship, then there should exist a cointegrating relationship between these two variables and possibly many others. The problem that arises is that we may be either unable to measure these other variables or that we do not know about them, in which case we may incorrectly find no relationship between health expenditures and outcomes. We then apply the concept of generalized cointegration; we obtain a highly significant relationship between health expenditure and health outcomes.     

Korean inflation during the US military administration of 1945-1948: a further analysis

This paper investigates the dynamic process of Korean inflation under the US military administration using a structural vector autoregression (SVAR) incorporating cointegration relations among the variables. The results show that government expenditure shocks are primarily responsible for price movements together with money demand shocks having noticeable short-run impacts. The study also shows that government expenditure shocks are the most important source of fluctuations in each of the other variables investigated. The paper concludes that a reform of fiscal and monetary system is necessary to stop the sustaining process of inflation as well as fluctuations in other macro-variables.     

Firm turnover,restructuring and labour productivity in transition: the case of Poland

Many studies have found strong and positive relationship between per capita income and health care expenditure. These studies usually adopt the assumptions that (1) the relationships among the variables are constant; and/or (2) the supply-side market for health care could be treated by using standard demand functions models. To take into account of the supply side of health care, we use the demand and supply approach with the cointegration model to re-examine this issue. By using Taiwan health care expenditure data, our results show that the real income elasticity is smaller than unity and the health care expenditures are primarily for ‘curing’ rather than ‘caring’.     

Monetary and fiscal policy transmission in Poland

This paper combines a fiscal structural vector-autoregression (SVAR) with a monetary SVAR for the Polish transition economy. Data are constructed from scratch in order to account for features of the transition economy and for delays in implementing legislated government spending and tax changes (fiscal foresight). For monetary policy, we find no price puzzles in the combined SVAR. Also, fiscal foresight variables have no statistically significant effects. We calculate an initial government spending multiplier of 0.70, which later peaks at 1.61 for the cumulative multiplier. This multiplier is much larger than multipliers estimated in previous studies not combining fiscal and monetary policy, where they were found to be close to zero. On the other hand, the tax multiplier is generally near zero in our study. We demonstrate the importance of combining fiscal and monetary transmission mechanisms when assessing the effects of government macroeconomic policies.     

Food quality,calories and household income

We investigate the relationship between calories, food quality and household per capita expenditure using regression and semiparametric methods on a sample of poor households from rural Mexico, where Programa de Apoyo Alimentario (PAL), a targeted nutritional programme, is operating. The semiparametric method yields an estimate of the elasticity between calories and expenditure of 0.39 below the median and 0.28 above. The corresponding estimates of the elasticity of the calorie price are 0.48 below the median and 0.45 above. We also examine the extent to which the expenditure elasticity of the calorie price is explained by substitution between and within major food groups. We find that there is a very high incidence of substitution within cereals (especially for poor households) and that between group substitution explains at most 59% of the income elasticity for food quality. These estimates suggest that the potential of a cash transfer programme to have a positive impact on the food diversity and the nutritional status of households is quite limited.     

PRICES,INEQUALITY, AND POVERTY: METHODOLOGY AND INDIAN EVIDENCE

This paper uses a methodology for evaluating the distributional implications of price movement for inequality and poverty measurement. The methodology is based on a distinction between inequalities in nominal and real expenditure. The conversion of nominal to real expenditure takes into account the varying household preferences. The empirical application to the Indian budget datasets from NSS rounds 50, 55, and 61 shows the usefulness of the proposed procedures. The relative price changes in India have tended to be inequality and poverty reducing as confirmed by formal statistical tests. The result is robust to expenditure dependent equivalence scales. The progressivity of the relative price changes weakened in the second half of our time period as Fuel and Light overtook the composite group called “Miscellaneous” in recording the largest price increase. While the poverty rates registered a decline, which was marginal in the urban areas, there was a sharp increase in inequality.     

Tariff pass-through and the distributional effects of trade liberalization

This paper estimates the distribution of welfare gains due to the trade reforms in India by simultaneously considering the effect on prices of tradable goods and wages. The cost of consumption for each household is affected by the domestic price changes, while wage incomes adjust to these price changes in equilibrium. Three rounds of the Indian Employment and Consumption Surveys are used for the analysis. The price transmission mechanisms are estimated for both rural and urban areas to understand the extent to which the trade reforms are able to affect the domestic prices. In order to assess the distributional effects, a series of nonparametric local linear regressions are estimated. The findings show that households at all per capita expenditure levels had experienced gains as a result of the trade liberalization, while the average effect was generally pro-poor and varied significantly across the per capita expenditure spectrum.     

The effects of price on household demand for food and calories in poor countries: are our databases giving reliable estimates?

Food price policy relies heavily on estimated price elasticities of food demand to help balance the nutritional and economic objectives in poor countries. Economists use either unit values (ratios of household expenditure to quantity purchased) or community prices (enumerated from vendors in local markets) as proxies for market prices when estimating price elasticities with household survey data. Biases are believed to result from using unit values, due to measurement error and quality effects, but evidence on this issue is lacking and even less is known about community prices. This article provides an empirical evidence from Vietnam, which suggests that economists should exercise caution when estimating price elasticities from household surveys. A 14-food demand system is estimated alternatively with unit values or community prices, and the elasticity of calories with respect to rice prices is calculated. This elasticity is more than twice as large (?0.54 versus ?0.22) when community prices are used rather than unit values. Hence, conclusions about the nutritional effects of rice price increases appear sensitive to data choices made by economists. More generally, this discrepancy suggests that the household survey databases commonly used by economists may not provide reliable estimates.     

Effects of Changes in Household Size,Consumer Taste & Preferences on Demand Pattern in India

Current research in applied demand analysis has been addressing the twin issues of degree of non-linearity or curvature of the Engel curves and the ability to capture price effects appropriately by the demand system. Further, in addition to income and prices, the role of demographic variables like household size, composition and dynamic aspects like consumer taste & preferences are also being ’ emphasized in recent literature. Continuous efforts are being made to modify the existing models and propose new ones to incorporate the above developments. The purpose of this study is to re-examine the usefulness of the popular linear expenditure system vis-à-vis the two other flexible models viz. Nasse expenditure system, a generalization of the linear expenditure system itself, and the almost ideal demand system in the above context for India.The empirical results indicate wide variation in marginal budget shares and demand elasticities across income groups, rural-urban sectors and alternative models. The household size and consumer taste & preferences are found to be statistically significant. The results confirm the earlier findings that there are significant changes in consumer tastes away from cereals and pulses in favor of other food and nonfood commodities. The results also show that flexible models, which are theoretically superior, gave unacceptable positive price responses for some commodities and violated second order conditions of utility maximization. It is found that some ad-hoc separability restrictions are needed, thereby limiting the flexibility of the model, to get negative own-price responses in these models. But, second order conditions are still violated. The tests of nested hypotheses also confirm the need for inclusion of household size, consumer taste, income group and rural-urban dummies along with their interaction variables in the demand system.