City size and household food consumption: demand elasticities in Spain

Are food price elasticities different across city sizes? The aim of this article is to estimate expenditure and own-price elasticities for 10 aggregated food product groups using the Spanish Household Budget Survey for the year 2010. These products are the ones for which the survey provides information regarding prices and quantities, thus allowing the application of an Almost Ideal Demand System (AIDS) model with censored data. The estimation procedure allows not only comparisons to be made among households with different levels of income, but also the contribution of residence characteristics to variations in demand. The results confirm that the size of the city in which the household resides has a similar significant and relevant effect on consumption patterns as family income level. This is especially clear with own-price elasticities. In Spain, large central cities show a greater response to price changes than smaller cities or rural peripheral areas.     

ASEAN’s intra-regional tourism demand to Thailand

This paper presents an overview of intra-regional tourism in ASEAN at the beginning of the challenging times that will come with the constitution of the ASEAN Economic Community (AEC). Thailand is chosen as the destination country and the other nine countries are selected as origin. After presenting ASEAN’s intra-regional tourism, the study develops a model of long-run demand. The coefficients are estimated by a time-varying parameters method considering the potential presence of structural breaks, and its implication. The results present and discuss the implications of income, own price, and cross price elasticities. As concluding recommendations, this study suggests that while the region should take advantage of the expansion of the Asian markets due to economic growth and liberalization of ASEAN since 2016, it should use different policies in each origin market.     

Estimation of Profit Functions When Profit is Not Maximum

This paper deals with derivation and implications of profit functions when profit is not maximum due to the presence of either technical inefficiency or allocative inefficiency, or both. We show that input demand and output supply, elasticities, and returns to scale are, in general, affected by these inefficiencies. We also show that the overall profit efficiency is not necessarily the product of technical and allocative efficiencies, meaning that technical and allocative inefficiencies are not necessarily independent. Estimation techniques are developed for both cross-sectional and panel data models. Working of the model is illustrated using a panel of 60 salmon farms.     

Weight-based pricing in the collection of household waste: the Oostzaan case

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.     

Incentives for investment in energy efficiency: an econometric evaluation and policy implications

Technical studies suggest that there exist many opportunities to improve energy efficiency, and that a substantial proportion is profitable by current business standards. This study deals with the question why so many of these profitable opportunities are not used. Reasons for not implementing profitable opportunities are idetified, and their effect is estimated on the basis ofa survey among Dutch firms, designed specifically for this study. The reasons that prevail indicate what policy measures may accompany energy taxes in the pursuit of energy efficiency improvement. In addition, energy efficiency elasticities are estimated, as well as the factors that determine the elasticities. These too indicate opportunities for government policy, if it wants to improve the effectiveness of energy taxes.     

Gradual Structural Changes of Meat Consumption in Taiwan

Abstract

This paper utilized a linear approximate version of the Almost Ideal Demand System to evaluate structural changes of meat consumption in Taiwan. Time transition paths for each product were identified, and the first-order autocorrelation was taken into consideration. Structural changes of beef consumption were completed before structural changes of other products had started. Shifts in consumption patterns of pork and poultry took about the same length of time. Structural changes of fishery products occurred toward the end of the time period. With the gradual switching time paths, estimated elasticities revealed that own-price elasticities for pork, beef, and fishery products became more responsive to their own-price changes.     

British tourism demand elasticities in Mediterranean countries

We use the almost ideal demand system (AIDS) model developed by Deaton and Muellbauer (1980) to estimate tourism demand elasticities for a number of Mediterranean countries (Cyprus, Greece, Italy, Malta, Portugal, Spain and Turkey) in relation to tourists originating from the United Kingdom during the period 1963 to 2009. Using the restrictions imposed by theory, we find that the model is able to explain developments in market shares reasonably well, despite the large and at times sudden changes in market shares over the sample period. Our share estimates indicate that while Spain and Portugal managed to keep a stable market share over time, Malta and especially Italy lost market share to Cyprus, Greece and Turkey. Overall, we observe that Italy and Spain have the lowest own-price elasticities, whereas Greece, Portugal, Spain and Turkey are expenditure inelastic holiday destinations. We also improve over the traditional treatment of the AIDS model in the literature by studying the stability of the estimated elasticities over time using recursive estimates. The results indicate that some elasticities are indeed time varying and highlight the potential pitfalls of assuming fixed and stable elasticities over a long period, as is customary in the tourism literature.     

An intertemporal analysis of expenditure elasticities under three expenditure specifications for Sri Lanka

Household income has been identified as one of the major determinants of demand for household goods. In addition, other household characteristics, such as household size and composition are also found to be important factors that influence household consumption decisions. This study, using four waves (2006/07, 2009/10, 2012/13 and 2016) of Sri Lankan Household Income and Expenditure Survey data, estimates three different specifications (namely, household expenditure, per-capita expenditure and expenditure per equivalent adult) of a complete system of Box-Cox Engel curves to incorporate household size and compositional differences into the model specification. A comparison of elasticity estimates across the three specifications indicates that amongst the three, the best performing model is the one utilizing household expenditure. An intertemporal analysis of expenditure elasticities indicates that although the magnitude of expenditure elasticities has changed, the necessity or luxury classification of household commodities has mostly remained unchanged for the period 2006 ? 2016 in Sri Lanka.     

Exchange rate and foreign GDP elasticities of Swiss exports across sectors and destination countries

This article uses a detailed breakdown of Swiss trade flows to identify how the impact of the two main determinants of Switzerland’s exports – foreign demand and the real exchange rate – varies across sectors and export destinations. Our main findings are that (i) both foreign demand and exchange rate elasticities vary substantially across both export sectors and export destinations. (ii) Foreign demand trends are more important for structural considerations than the exchange rate. This is due to the fact that exports of the two largest export sectors are relatively sensitive to long-run foreign demand developments while they are relatively insensitive to changes in the exchange rate. (iii) The sectoral structure of Switzerland’s exports has shifted towards goods that have a lower short-run demand elasticity and a higher long-run demand elasticity. Goods exports are thus less influenced by business cycle fluctuations while they benefit more from long-term growth trends. (iv) The export share of sectors with a relatively low exchange rate elasticity has increased. However, this result is mainly driven by the strong rise in exports of chemicals and pharmaceuticals as well as precision instruments and watches, which are also the two important sectors responsible for the Swiss trade surplus.