Modeling the demand for alcoholic beverages and advertising specifications

In this paper, the demand for beer, wine, spirits and soft drinks in Ontario is modeled in two parts: an equation is specifiec to endogenize group expenditures and a demand system is set up to allocate budgeted group expenditures across types o beverages. Advertising is allowed to influence both the level of group expenditures and its allocation. Three popula advertising specifications are compared using theJ‐test and the likelihood dominance criterion. Even though all threi specifications fitted well according to standard criteria, the calculated expenditure, price and advertising elasticities wen sensitive to the manner with which advertising is specified. This clearly highlights the need to rely on a sound criterion t< identify a dominant specification. From the identified dominant specification, we found that advertising has very subtle effect on expenditures on alcoholic beverages (group and individual beverages). Thus, advertising is not effective in enlarginj markets and this suggests that firms (especially breweries) use advertising to compete in zero‐sum market share games. From i public policy perspective, our results are comforting but future research should investigate whether the neutral effect o advertising on aggregated expenditures hide substantial offsetting changes in the drinking habits of individuals.     

Advertising Expenditures and the Consumption of Alcoholic Beverages

The theory of consumer behavior is applied to the estimation of a demand svstem. Monthly data on alcoholic beverages (beer, wine, liquor, soft dhnks) from the province of Ontario in Canada are analyzed. Before estimating the linear approximate almost ideal demand system (LA/AIDS), unit root and cointegration tests are implemented. Budget shares, per capita advertising expenditures, real total expenditure, prices and per capita consumption are found to be non-stationary. The budget share, the advertising expenditures, the prices and the real total expenditure are cointegrated for each beverage. Own and cross-price elasticities, income elasticities and own and cross-advertising elasticities are calculated from the estimated or the demand system. Based on own-price elasticities and income elasticities, alcohol consumption is consistent with the law of demand and the products analyzed are normal goods. The estimation of income and advertising effects is important for analyzing the need for, and the effectiveness of, potential control policies. The advertising elasticities are small but statistically significant. This suggests that advertising may promote alcoholic beverage consumption. The estimated inelastic demands for beer and wine suggest that the primary purpose of high excise taxes levied by the Federal and Provincial governments is to raise government revenues and not to discourage consumption.     

Advertising Evaluation and Measurement Error: The Case of Fluid Milk in Ontario

A key component of any attempt to assess the economic impacts of advertising is the ability to obtain accurate estimates of advertising elasticities or response coefficients. Accurate estimates of advertising response require accurate data. This study compares estimates of advertising elasticities based on two alternative data series. One data series represents actual expenditures on fluid milk advertising as measured by the entity conducting the advertising. The other data series represents estimated advertising expenditures as measured by a commercial tracking firm. Results based on a quarterly econometric model covering the period 1973-84 suggest data obtained from the tracking service produce severely downward-biased estimates of advertising response. The tracking data, moreover, tended to understate the actual level of advertising over the sample period and to misrepresent turning points. Un des facteurs déterminants permettant d'évaluer l'incidence économique de la publicité est la capacityé d'obtenir une estimation précise des élasticités de la publicité ou des coefficients de réaction. Pour estimer avec précision la réponse à la publicité, on a besoin de données précises également. La présente étude compare les estimations de l'élasticite de la publicité obtenues au moyen de deux séries de données. La premiére série portait sur les dépenses réelles de publicité pour le lait de consommation, telles que calculées par l'organisme chargé de la campagne. La seconde représentait les dépenses de publicité prévues par une entreprise d'étude de marché. Les résultats tirés de l'application du modéie économétrique trimestriel à la période de 1973 à 1984 indiquent que les données de l'en-treprise d'étude du marché entraînent une nette sous-estimation de la réaction a la publicité. EHes ont eu aussi tendance à sous-estimer le budget réel consacré à la publicité au cours de la période à l'étude et à mal signaler les points déterminants du cycle.     

Beggar-Thy-Neighbor Advertising: Theory and Application to Generic Commodity Promotion Programs

Profits from generic advertising by a producer group often come partly at the expense of producers of closely related commodities. The resulting tendency toward excessive advertising is exacerbated by check-off funding. To analyze this beggar-thy-neighbor behavior we compare a scenario where different producer groups cooperate and choose their advertising expenditures jointly to maximize the sum of profits across the groups, and a scenario where they optimize independently. In an illustrative example using 1998 data for U.S. beef and pork, the noncooperatively chosen expenditure on beef and pork advertising is more than three times the cooperative optimum.     

Demand for rural tourism: the effects of quality and information

The development of rural tourism is regarded as a promising diversification strategy especially for lagging and mountainous areas of the European Union. Research concerning the demand and/or supply of rural tourism services has been limited within the agricultural economics domain despite the significance attached to rural tourism by various rural development policy measures and initiatives. The article examines the expenditure behavior of rural tourists within a framework of demand for composite (heterogeneous) goods. The proposed framework captures the quality of the tourism experience as the commodity's unit value, a quantifiable economic variable, examines its effects on expenditures and allows for the estimation of elasticity in prices regarding expenditure and quantity. Empirical analysis is facilitated by a survey recording the expenditure behavior of 465 tourists in two rural and lagging areas of Greece. The quality of the tourism experience is significantly and positively affected by the income, the source from which information about the trip is retrieved (Internet, newspapers as well as general press and special travel press) and by the amount of information sought by the consumer prior to the trip. In turn, the quality of the tourism experience is the major endogenous factor that positively influences expenditures for rural tourism. Further research is needed before evidence provided in this work can be used to draw policy conclusions and recommendations.     

The Economic impact of public agricultural research and development in the United States

In this article, we examine the relationship between public investments in agricultural research and development and the productivity‐enhancing benefits they generate. Knowledge productivity functions are estimated for U.S. agriculture using data on multifactor productivity and public knowledge stocks. We examine the time‐series properties of the data and compare alternative econometric estimation procedures. The results are used to calculate economic performance measures such as internal rates of return and benefit‐cost ratios. The real rate of return to public investments in agricultural research and development in the United States is in the range of 8–10% per annum.     

GENERIC PROMOTION OF BEEF: MEASURING THE IMPACT OF THE US BEEF CHECKOFF

Generic promotions of commodities are growing in importance. In the US, commodity industry assessments or checkoffs (i.e. a per unit levy or tax) are used to underwrite domestic and international promotions by commodity groups. The US beef checkoff is one of the largest of these new national commodity programmes. Evaluation of the economic impact of the beef promotion is an essential part of the beef checkoff. A model for evaluating the US beef programmes is estimated and the methodology is applicable to other commodity models that include advertising and promotion expenditures. The beef analysis shows a positive and significant return to the beef industry, with an average of approximately $5 for each $1 invested for the quarters 1987:1 through 1991:2.     

An Analysis of Public Agricultural Research in the Canadian Prairie Provinces

This study has developed a four-equation model of agricultural research in Canada using some aspects of special interest theory, institutional theory and economic variables. The demand, supply and allocation equations were developed with special reference to the Canadian agricultural research sector and the more restrictive prairie agricultural research sector. The conceptual model developed is designed to explain the allocation of public expenditures on commodity specific applied research. The reduced-form equation of the model was estimated for 6 commodity classes (2 crops, 4 livestock groups) to test the applicability of the model over the commodity groups.
The evaluation of the reduced-form equation model and the implications that derive from it give an interesting view of the Canadian research sector. Some variables did perform as a priori expected with relative consistency and certain equations performed very well. These results lead to some implications for the Canadian agricultural research sector.
The general performance of the reduced-form equation and its ability to explain the total variation of expenditures on commodity specific agricultural research gives limited support to the model developed. Nevertheless the results tend to indicate that agricultural research is responsive to economic and institutional variables.     

EFFECTS OF NON-PRICE EXPORT PROMOTION: SOME EVIDENCE FOR COTTON*

An Annington-type trade model is estimated to determine the effects of government-subsidized export promotion on the demand for U.S. cotton in the Pacific Rim. Results show a significant relationship between promotion expenditures and U.S. market share in four of the six countries examined. One of the two countries exhibiting a non-significant effect had very low promotion expenditures, suggesting that a minimal level of funding may be necessary to achieve a market response. The hypothesis that export promotion has a carryover period lasting beyond one year in general is supported by the data. The question of the economic impacts of export promotion on domestic producers and taxpayers must await additional research.     

Canadian dairy policy and the returns to federal dairy cattle research

The economic surplus approach is used to estimate the returns to federal investments in dairy cattle research in Canada. A national supply function is estimated using time series data. Lagged research expenditures are included as explanatory variables in the model, facilitating the calculation of ***marginal as well as average benefits from research. Simulation analysis is used to study the effects of product market distortions associated with Canadian dairy policy as well as of the marginal excess burden on the rates of return to research and on the distribution of research benefits. Returns were found to be high at the margin. Distortions in the product market had a small effect on the overall returns to dairy cattle research but had a large impact on the distribution of research benefits. Rate of return estimates were found to be indicative of underinvestment even when the marginal excess burden was taken into account.     

The rise and fall of public sector plant breeding in the United Kingdom: a causal chain model of basic and applied research and diffusion

This paper examines the barley and wheat breeding programmes of the Plant Breeding Institute (PBI), which was the most successful public plant breeding institute in the UK, until privatization in 1987. The PBI's shares in barley and wheat seed sales are explained, showing that the success with barley was largely a matter of serendipity, whereas the wheat programme followed a more normal pattern. For wheat, the causal chain, or recursive, model decomposes the well-documented link between research expenditures and increases in agricultural productivity into three stages. These are the effects of R&D expenditures on basic research output, measured by publications, the effect of publications and applied R&D expenditures on trial plot yields, and the diffusion of the trial plot technologies, which raises yields on farms. Applying the model to the FBI's wheat varieties allows estimation of the lag structures. In contrast to the results for aggregate agricultural research, for a single plant breeding programme alone there is a considerable lead time before there is any response, followed by a lag distribution only a few years long. The returns to the R&D investments are calculated from the causal chain model, from single equation estimates and by evaluating the yield advantage of the PBI varieties. All three approaches give consistent results, which show that the returns to barley and wheat alone were sufficient to support the entire PBI budget and still give rates of return to applied research of between 14 and 25%. The return to the basic science expenditures of the John Innes Institute has a lower bound of 17%, but must have been even higher than for the PBI if the other Institutes were taken into account. The paper concludes by commenting on the effects of the privatization of the PBI.     

Structure of Public Support for National Agricultural Research Systems: A Political Economy Perspective

This paper initiates development of a set of stylized facts concerning the structure of public support for national agricultural research systems (NARS) within a neoclassical political economy framework. The aim is to place public funding of NARS in the broader context of the overall level of direct government assistance to agriculture. Using a newly constructed data set on NARS expenditures over the 1970-85 period, we observe a growing disparity in agricultural research intensity ratios, which measure the level of public support for NARS in relation to agricultural gross domestic production (Aggdp ) between low and high-income countries. This growing disparity appears to be driven by much larger increases in support for agricultural research by high-income countries, coupled with a significantly slower growth in the size of their agricultural sector, despite the propensity of low and middle-income countries to increase real support to agricultural research. As per-capita incomes rise the public agricultural expenditure ratio, which measures public expenditures on agriculture relative to the size of the agricultural sector, Aggdp , increases substantially. Public expenditures on agriculture were indexed on agricultural and non-agricultural populations to give a rough indication of the increasing incentives for rural 'distributional coalitions' to seek a redistribution of public expenditures in their favor. A relative research expenditure (rre ) ratio is developed, which measures the proportion of total public expenditure on agriculture spent on agricultural research. It provides an indication of the relative importance given to research on agriculture within the constraints imposed by overall public spending on agriculture. In contrast to the agricultural research intensity ratios, the rre ratios suggest that agricultural research appears to command as large a share of the public purse devoted to agriculture in low and middle-income countries as it does in high-income countries. Expectations derived from the neoclassical political economy literature that research may have fared relatively better in high compared with low-income countries were not supported by the data.     

Household Composition and Brazilian Food Purchases: An Expenditure System Approach

The use of household level data for food demand analysis requires the researcher to address issues such as purchase censoring and the impacts of household age/gender composition on such demand. This analysis adopts an estimation approach to modeling censored food expenditures. The major methodological contribution of this analysis is our incorporation of an endogenous equivalence scale measure within the expenditure system. Our empirical application is concerned with Brazilian household food expenditures. We use the estimated adult equivalence scales to evaluate a measure of household welfare represented by per-adult equivalent food expenditures. We find a significant shift of the distribution of per capita food distributions when comparing member count versus adult equivalent-based per capita distributions.     

江苏省水污染、环境规制与高质量经济发展

利用江苏省2005—2017年的面板数据,研究水污染、环境规制与高质量经济发展之间的关系。首先采用熵权法构建高质量经济发展评价体系;其次采用SYS-GMM法构建基准回归模型;接着以水污染为门槛变量,研究水污染不同程度下,水环境规制对经济发展的效应;最后,从苏南、苏中、苏北3个区域出发研究水环境污染的空间异质性。研究结果表明:水污染对经济发展质量产生负向效应。江苏省的水环境规制总体上看对经济发展质量产生制约作用。随着水污染程度的加重,环境规制对经济发展质量的抑制作用将逐渐减弱。江苏省三大区域的水污染、环境规制对经济发展质量的影响具有空间异质性。     

Optimal Institutional Mechanisms for Funding Generic Advertising: An Experimental Analysis

Given the uncertain legal status of generic advertising programs for agricultural commodities, alternative voluntary funding institutions are investigated that could provide a high level of benefits to producers. This experimental study simulates key economic and psychological factors that affect voluntary producer contributions to generic advertising. The results suggest that producer referenda play a critical role in increasing contributions and that producer surplus is maximized by a provision point mechanism instituted by producer referendum with thresholds ranging from 68% to 90%, and expected funding from 47% to 77% of the time, depending on the level of advertising effectiveness.     

Welfare impacts of new demand-enhancing agricultural products: The case of Honeycrisp apples

Agricultural research and development programs on new demand-enhancing products have become increasingly important over the past decade. Large numbers of new agricultural products have been developed and commercialized in the United States to meet consumers’ increasingly diverse expectations for food quality. However, little is known about their economic benefits. Focusing on the apple market, we investigate the welfare impacts of the introduction of Honeycrisp apples in a market equilibrium framework. We use market data on apple sales from 61 cities across the United States between 2009 and 2015. We find the introduction of Honeycrisp increased consumer welfare, which is mainly explained by the increased number of total apple varieties. We also find that the introduction of Honeycrisp apples has increased overall market size and total apple sales. To extrapolate our results to the entire U.S. apple market, we perform a back-of-the-envelope analysis and find that the introduction of Honeycrisp apples has increased total consumer welfare by about 859 million dollars during the study period. This corresponds to approximately 19% of the annual average domestic expenditures on public food and agricultural R&D.     

农村居民旅游消费特征与制约因素分析——以浙江省为例

随着我国农村经济的不断发展,农村居民旅游问题也备受关注。文章以浙江省为例,针对该省农村居民旅游消费的特征及制约因素展开研究,研究结果表明,浙江省农村居民旅游受经济收入、市场现状、城镇居民旅游消费示范效应及财政民生性支出等因素的影响,该省农村居民旅游消费具有消费观念相对落后、消费动机多元化,消费总量较大、人均消费水平低、消费结构不合理,及消费形式多样化等特征。在此基础上提出转变农村居民消费观念、培育科学旅游消费观,增加农村居民收入、提高旅游消费能力,开发农村旅游市场、完善市场体制,及加强政府对农村居民旅游的支持力度等一系列对策措施,以期促进该省农村旅游业的健康可持续发展。     

海洋产业集聚对区域海洋经济分异的影响——基于我国省际面板数据的实证检验

论文运用面板数据估计方法,分析海洋产业集聚与区域海洋经济分异之间的内在联系。研究结果表明:海洋产业集聚对区域海洋经济分异有着显著的正向影响,这一影响通过规模经济效应和技术外部性、涉海生产要素差异、专业化分工与竞争等方面引致区域海洋经济分异。这就要求合理进行海洋产业布局以优化海洋产业集聚水平,从而避免对海洋资源环境的破坏以实现区域海洋经济的协调发展。     

The Problem of Free Riding in Voluntary Generic Advertising: Parallelism and Possible Solutions from the Lab

Producers of many commodities pay for generic advertising, which is a public good for producers and, in cases like healthy foods, enhances social welfare. Though most programs were initially funded through the Voluntary Contribution Mechanism, many became mandatory to mitigate free riding. This experimental research simulates key economic and psychological details of these programs and produces donation results strikingly similar to a historic example. Because mandatory programs may be declared unconstitutional, the Provision Point Mechanism is tested as an alternative. This research also shows that refund-by-request donation mechanisms establish a status quo of contributing and reduce free riding.