Urban water demand with fixed volumetric charging in a large municipality: the case of Brisbane,Australia*

This paper uses suburb‐level quarterly data to model residential water demand in Brisbane, Australia, from 1998 to 2003. In this system, residential consumption is charged using a fixed annual service fee with no water entitlement followed by a fixed volumetric charge per kilolitre. Water demand is specified as average quarterly household water consumption and the demand characteristics include the marginal price of water, household income and size, and the number of rainy and warm days. The findings not only confirm residential water as price and income inelastic, but also that the price and income elasticity of demand in owner‐occupied households is higher than in rented households. The results also show that weather, particularly summer months and the number of rainy days, exerts a strong influence on residential water consumption.     

Demand for animal‐derived food in selected Asian countries: A system‐wide analysis

Food consumption patterns in Asia show a trend away from staples toward high protein food derived from animal and dairy products, fruit and vegetables, fats and oils. Such changes in food consumption patterns are due to rising incomes, urbanization, globalization, and modernization of marketing infrastructure. In this article, we analyze the demand for the animal‐derived food group comprising meat (chicken, beef, pork, and mutton), eggs and fish, and derive income and price elasticities in seven Asian countries using the system‐wide approach. Demand homogeneity and Slutsky symmetry properties were tested and found to be compatible with the data. Our findings reveal that animal‐derived food as a group is a necessity (except in Taiwan) and its demand is price inelastic (except in Taiwan and Sri Lanka). The implied unconditional demand elasticities reveal that, in all countries (except beef in Japan and Taiwan), chicken, beef, pork, mutton, eggs and fish (except in Taiwan) are all necessities and the demand for all types of animal‐derived food in all seven countries are mostly price inelastic. The cross‐price elasticity estimates are mostly found to be positive, meaning that there is a higher degree of substitutability between chicken, beef, pork, mutton, eggs, and fish.     

Demand for improved fish feed in the presence of a subsidy: a double hurdle application in Kenya

Fish farming households’ demand for improved fish feed from the private market in Kenya is potentially influenced by the government's feed subsidy program. This article applies the double‐hurdle model to a cross‐section of fish farms to analyze demand for improved fish feed from private markets, and whether the government feed subsidy program has an effect on private demand for improved feed. The results indicate that households’ decisions to participate in the improved feed market are affected by the quantity of improved feed received from the government. Once the participation decision has been made, we find evidence of crowding‐in of the private improved feed sector; that is, the government's allocations of subsidized feed appear to increase private sector demand. In addition, the price of improved feed negatively affects the quantity purchased as expected. Education, extension contacts, and ease of marketing matured fish increase household propensity to purchase improved feed commercially. Policies that help reduce the price of improved feed such as reduction in tariffs on imported feeds and feed ingredients will foster demand for the feed, as will policies that facilitate marketing of fish at reasonable prices by households.     

Analysis of household attitudes toward the purchase of livestock products and fish in Cameroon

The need for additional information on household demand for meat and fish in Cameroon is addressed. Probit analysis involving the Heckman selectivity correction procedure is used to estimate the effects of individual and household characteristics on demand for beef, chicken, pork and fish. Results indicate that fish is a relative necessity in Cameroon and is often substituted for beef and chicken by households whose profiles include being of low income levels, having large household sizes, are of middle age and are less educated. Whereas chicken and pork substitute each other, they are each complementary to beef. The profiles of households likely to purchase beef include being married, middle age, educated and of the Muslim faith. Profiles for households most likely to increase their purchases of chicken include being of high income levels and are public sector employed. Some policy implications are provided.     

Consumer Behavior and Fish Market Development in Oman

Abstract

Capitalizing on the rich fishing grounds that populate the coastal waters of the Sultanate of Oman is important in that country's economic diversification. Domestic fish markets have been constrained by consumers⁵ habits, which show very strong preferences for fresh fish over other processed forms. This study relates fish market and product development to consumer habits, perceptions, income, and other demographic and socioeconomic factors. Educational attainment and rural/urban households demonstrated the strongest relationships to likelihood of Omani fish choice by species and form. Income group, importance of price, and price expectations were significant influences on fish variety and form consumption, as were attitudinal choice characteristics, such as place of purchase, fish product characteristics, and spousal purchasing decision. Rural households and household size affected the odds of Omani consumption of fresh fish negatively.     

Comparing heterogeneous consumption in U.S. and Japanese meat and fish demand

This article uses national, quarterly data to conduct an empirical analysis of pre‐committed meat and fish demand by U.S. and Japanese households using the generalized almost ideal demand system (GAIDS). Pre‐committed demand represents the component of demand that is insensitive to both income and price adjustments. U.S. consumers are found to hold significant positive pre‐committed demand for beef and pork, while Japanese consumers appear to possess significant, positive pre‐committed demand for beef and fish. This provides evidence to partially explain observed differences in Japanese and U.S. consumer reactions to nonprice and nonincome effects in beef, pork, poultry, and fish. In addition, based on in‐ and out‐of‐sample performance, the more general GAIDS is preferred to the almost ideal demand system (AIDS) for both the U.S. and Japanese demand systems. Results lend to improved demand modeling efforts and more complete understanding of true market forces at hand in meat and fish markets for these culturally diverse consumer groups.     

Changing food consumption patterns in rural and urban Vietnam: Implications for a future food supply system

Rapid income growth and urbanisation could significantly change the composition of the food basket in many emerging economies. This study estimates a demand system, including 15 major food items in Vietnam, with multiyear household survey data. We find a large variation in the estimated price elasticities (–0.05 to –0.88) and expenditure elasticities (–0.16 to 2.56). Food types, urban status and income groups can explain this variation. We also find that the staple food, rice, is already an inferior good for rich urban households in Vietnam. Moreover, food preferences are evolving away from rice but towards animal proteins (fish, pork, chicken, eggs and milk), fruits and vegetables, irrespective of urban status and income groups. As the Vietnam economy continues to grow with a doubling of gross domestic product (GDP) in the next decade, per capita rice consumption in both urban and rural areas and across different income groups will continue to decline, whereas demand for other high‐value products will rise. Thus, government policy should focus on encouraging demand‐oriented food production. In addition, crop diversification at the farm level needs to improve substantially to meet the rising demand for these food products due to income growth and urbanisation.     

A cross-section analysis of household demand for food and nutrients in Tanzania

Undernutrition and malnutrition are still problems of unacceptable proportions in many developing countries. However, the debate on the roles of income and other socio-economic variables such as women’s education and household size on food and nutrient demand continues. This study examines the demand for food and nutrients amongst households in Tanzania, using recent survey data. A quadratic almost ideal demand system (QUAIDS) is employed to estimate price and expenditure elasticities, as well as the impact of socio-economic variables on food demand patterns. A moment-based instrumental variable approach is then used to analyse the determinants of nutrient demand. The results show that income and other socio-economic variables exert significant effects on the demand for food and nutrients. The estimated expenditure elasticities for the nutrients range from 0.307 for iron to 1.26 for Vitamin B₁₂. The elasticities are higher for those micronutrients that are consumed through animal products and lower for those micronutrients that are mainly obtained through staple foods. These results reflect the higher expenditure elasticities for meat, fish, eggs, milk, and milk products, as well as fruits and vegetables, relative to cereals and pulses, reinforcing the assertion that the demand for Vitamins A and B₁₂, as well as calcium and zinc will increase with rising income.     

The effects of a large discrete maize price increase on the distribution of household welfare and poverty in rural Kenya1

This study estimates the effects of a large discrete maize price increase on the welfare of a sample of rural Kenyan households. The usual first‐order welfare approximation formula is extended to a second‐order formula that allows for supply and demand responses to the price change. Results show that many rural households are not affected greatly by the price change, and there are about as many gainers as losers. However, these full sample results mask important differences across regions. Welfare gains generally take place in major production areas while losses are in areas where most households are net buyers of maize. Semiparametric methods are used to investigate the relationship between income and the size of the welfare effect, and poverty dominance techniques are applied to study the impacts of the maize price increase on rural poverty.     

The Demand for Food Quality in Rural China

Many studies of food demand do not use actual prices but unit values, obtained by dividing expenditures by the quantity consumed. This can bias empirical analyses because unit values are not exogenous market prices; they reflect household food quality choices within each food category. This article develops a framework for assessing the resulting bias in income and price elasticities of demand and applies the framework to data for rural China. Empirical results indicate that households in rural China tend to consume higher-quality food as income increases, with a greater sensitivity to income for basic foods than for luxury foods.     

The dynamics of household beef consumption in Cameroon

Recent changes in economic conditions have introduced notable changes in household beef consumption patterns in Cameroon. While consumers are concerned about the short- and long-run effects of these factors on beef consumption habits, policy makers are more worried about the appropriate period necessary for households to make complete adjustments in consumption since this information is vital for planning production. Static and dynamic demand frameworks involving the Nerlovian partial adjustment (PA) model are used to capture the dynamic nature of beef consumption parameters. Maximum likelihood estimates of the PA model reveal that the conditioning variables explain 79% of the variation in beef consumption. Income, previous consumption, own-price and prices of fish and pork are jointly important in explaining beef consumption habits. Beef is a normal good with pork and fish as substitutes and chicken as a complement. Long-run price and income elasticities are greater than but not significantly different from their short-run values, suggesting that adjustment in consumption is fast with about 80% of the difference between actual and ‘desired’ consumption being completed in about 2 years. Projections show that demand for beef will reach 109620 t by the year 2000. giving an incremental total and per capita demand of 31 730 tons and 1.84 kg, respectively.     

Household Food Consumption in a Developing Economy:

The primary objective of this paper is to describe household rice consumption patterns in Nigeria with evidence from Imo State, determine the nature, magnitude and direction of income, price and cross price elasticities of demand, and examine the factors influencing household rice consumption. A budget survey of 50 randomly selected rural and urban households in Imo State, Nigeria, interviewed. The survey was repeated for 14 months between November 1984 and January 1986, providing the data used for analysis. There were significant differences between urban and rural household per capita daily rice consumption. Income (expenditure) elasticity of demand was greater than unity, and decreased, as expected, from low to high income groups. Household income was the most important determinant of food consumption. The implications of these findings for food and international trade policy are discussed.     

Nutrition Transition and Changing Food Preferences in India

We present empirical evidence on how changes in food preferences have contributed to nutrition transition, where the dietary pattern of households shifts away from traditional staples. Using household-level time series cross-section survey data for India, we estimate time varying demand elasticities, revealing evidence of the declining importance of cereals in Indian household diets. The estimates show that Indian demand for cereals has become more income inelastic and price elastic. We also find that cereals are a substitute rather than a complement to animal products in household diets. Since changes in elasticities can only be attributed to variation in utility parameters, this indicates that cereals are losing favour with Indian households. These findings have implications for Indian food policy design and implementation.     

The demand for meat and fish in Spain: Urban and rural areas

The aim of the paper is to explain to what extent meat consumption patterns in Spain are different in rural and urban areas and which are the factors explaining differences and similarities. A demand system using cross-section data from the latest Spanish National Survey has been estimated. Unit values have been used instead of market prices and price and quality effects have been obtained. The main conclusion is that meat consumption patterns in urban and rural areas are not really different as regards economic factors. Some small income and price effect differences have been found, specially for fresh pork and fish, Responses to changes in income and price are higher for fresh pork consumption in rural areas and for fish in urban areas.     

Structural changes in the demand for food in Asia: empirical evidence from Taiwan

Many Asian countries are expected to undergo structural transformations in their economies and rapid urbanization over the next 25 years. The changes in tastes and lifestyles engendered by urban living are likely to have significant influences on food demand. Changes in marketing systems and occupational changes, closely linked with increasing GNP per capita, also may influence the demand for food. In this paper, estimates presented for Taiwan demonstrate that structural changes in food demand (as distinguished from changes due to income and price effects) have been significant factors driving the rapid changes in dietary patterns seen in East Asia over the past three decades. Because most previous demand studies have ignored the possible influence of structural shifts which are highly correlated with increases in per capita income over time, the effects of income on food demand have been overestimated.     

Health and hunger: nutrient response to income depending on caloric availability in Nepal

Using data from NLSS III, we estimate nutrient‐income elasticities for macronutrients, vitamins, and minerals. We further allow for differential nutrient demand response to income depending on where a household is in the caloric availability distribution. We find that some nutrients are income inelastic indicating that they are necessity goods while others are relatively income elastic. We further test and reject equivalent nutrient‐income elasticities across the caloric availability distribution. Households in the lowest calorie quintile have highly income elastic nutrient demand leaving them vulnerable to income fluctuations. Moreover, as households meet their first‐order caloric needs, they substitute away from cheap calorie‐dense staples toward more expensive nutrient‐dense foods. Finally, for most nutrients, households in the highest calorie quintile exhibit more elastic nutrient demand, similar to households in the lowest quintile. Our results suggest that policies aimed at improving income will likely also improve household nutrient availability, particularly for the most calorie poor households. They further suggest that policies aimed at protecting poor households from negative income shocks will also likely yield nutritional benefits.     

The wealth of nature: economics as if survival mattered

Livestock play a key role in the lives of poor, rural people in developing countries, providing a major proportion of their cash income, capital assets, draught power, fuel and fertilizer. Rapid growth in demand for meat and dairy products in Asia presents both opportunities and challenges for livestock development and poverty alleviation. This paper explores the potential of livestock intensification to benefit the livelihoods of upland households and meet market demand in the Lao Peoples' Democratic Republic (Lao PDR), a South East Asian country undergoing significant economic change.

A review of the livestock sector in Asia shows increasing demand for live animals and meat in neighbouring Vietnam, Thailand and China. Lao PDR is well positioned to capitalize on the growing Asian livestock sector, however the extent livestock production in Lao PDR can reduce poverty, meet growing domestic meat demand and lift livestock exports is problematic. Findings from research in two upland northern provinces demonstrate how the introduction of forages for livestock has revolutionized the lives of some farmers and villages, but concludes that strategies are still needed to engage poorer households. The impacts of changing domestic and export markets are less certain, and are discussed within the context of environmental and public health, cultural traditions, economic development and sustainable livelihoods.     

Analysis of food demand in Vietnam and short‐term impacts of market shocks on quantity and calorie consumption

A complete demand system for Vietnam was estimated using household survey data. Results showed that demand for rice with respect to prices and expenditure is relatively inelastic compared to other foods. Demand for food in general tends to be less elastic at higher levels of income and for urban households. In the short term, a market shock such as a 10% decrease in income or a 30% increase in rice prices forces households to spend a larger portion of their expenditure on rice at the expense of other foods. Low‐income households face a higher risk of undernourishment as their daily calorie intake is more negatively affected by the shocks than high‐income households. The results suggest the importance of policies that provide necessary safety net programs for the poor.     

Demand for meat and dairy products by Turkish households: a Bayesian censored system approach

We extend the Tobit (censored) linear equation system procedure to utility‐theoretic demand functions, along with a mapping mechanism to impose the adding‐up restriction implied by consumer utility maximization theory—a theoretical restriction very often ignored in previous empirical studies with censored demand systems. In this context, the Bayesian Markov Chain Monte Carlo (MCMC) procedure is applied to the censored linear approximate almost ideal demand system (LAIDS) for 12 food products, using data from the Turkish Household Expenditure Survey. All own‐price elasticities are negative and expenditure elasticities positive. Uncompensated own‐price elasticities for rural households are generally much higher than those for their urban peers, though demand for most food products are own‐price elastic for both types of households. The differential patterns in demand elasticities between urban and rural households become even more evident (almost twice) as relatively more expensive foodstuffs are consumed, showing that accessibilities to alternative products have made rural Turkish households more cognizant toward price changes in foods. Household characteristics play a key role in food expenditures, notably so in urban areas, and regional and seasonal differences are also present.     

Poverty and fat consumption: Education poor or income poor?

In this paper, we question the role of added fats on health disparities in the French case and its policy implications. Since low-status populations are proven to have more nutritional pathologies, can we evidence fat consumption specificity in poor populations? We first verify the strong sensitivity of fat consumption to income and education, criteria which both characterize deprived populations. We estimate a demand system taking into account the selection issue. For this we propose a modification of the Shonkwiler and Yen's procedure which, unlike Heckman's, allows participation on every market of products to be controlled for. We use the latter procedure on a set of seven fat categories which have different, including opposite, health attributes. Our results show that segmentation following income and/or education essentially affects price elasticities. This offers different perspectives for health policies. Controlling fat consumption through prices appears easier among low-income households than among low-education households.