Improving the efficiency targeting of Malawi's farm input subsidy programme: Big pain,small gain?

The Farm Input Subsidy Programme (FISP) in Malawi was introduced in the 2005/2006 season against a background of bad weather affecting production and prolonged food shortages. Vouchers are distributed empowering eligible farmers to exchange them for fixed quantities of inputs at subsidized prices. Since its inception, there has been a debate at national level about whether the FISP’s potential has been fully exploited, with policy makers exploring options to improve the programme. Proposals include targeting efficient and productive farmers to maximize returns. In this paper, we evaluate the effectiveness of these proposed changes to the existing FISP design by utilizing two waves of the LSMS-ISA survey merged with climatic data. We estimate how the national demand for agricultural inputs varies according to a variation in the targeting criteria by means of a two-stage demand system. Then, we identify more efficient farmers by means of a stochastic frontier approach. We observe a mismatch between voucher recipients and efficiency, with approximately 60% of vouchers being allocated to the three bottom quintiles of efficiency. This mismatch is observed also at the spatial level with more vouchers going to districts characterized by less efficient production. While concerns on the distributional impacts of the new criteria are discussed together with some suggestions for spatially diversifying the structuring of the policy and incentivizing crop diversification, our results highlight a high substitutability of commercial with subsidized inputs by new eligible farmers. Consequently, simulating the targeting policy variation we obtain an outcome that would lead only to a limited increases in predicted food expenditure ranging from 0.27% to 0.8% and maize production from 0.2% to 1.3. Scope for analysing different adjustments in the functioning of FISP are, thus, proposed to policy makers.     

Alcohol demand among young people in Spain: an addictive QUAIDS

This paper analyzes the demand for alcoholic beverages among young people in Spain. To that end, we develop a theoretical model which combines elements from the Theory of Two-Stage Budgeting and the Theory of Addiction, with this being empirically translated into a Quadratic Almost Ideal Demand System (QUAIDS) in which the particular characteristics of young people are introduced by Price Scaling (PS) techniques. We then estimate this specification by using data drawn from the Spanish National Survey on Drug Use in the School Population (2000) and the Spanish National Household Survey (2000). Given that wine, beer and spirits all have normal demands, our results suggest that a tax increase imposed with the intention of reducing alcohol consumption would appear to be efficient. This paper was partially written while Ana Isabel Gil was a Visiting Researcher at the London School of Economics and Political Science, to which she would like to express her gratitude for the hospitality and facilities provided. An earlier version of this paper has been presented at the Spanish Economic Analysis Meeting-2003 (Sevilla, Spain) with all the comments made by the participants being appreciated. Finally, the authors would like to express their thanks for the financial support provided by the Spanish Ministry of Education-CICYT and the European Commission (Project 2FD97-2057). The usual disclaimer applies.     

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.     

Food security in Kenya: Insights from a household food demand model

This paper evaluates the household food security situation in Kenya in terms of access to food. We apply a quadratic almost ideal demand system (QUAIDS) model to nationally representative household survey data from Kenya, and estimate and interpret price and expenditure elasticities as indicators of household sensitivity to market shocks. Our estimation results show positive expenditure elasticities, close to unity, while all compensated and uncompensated own-price elasticities are negative and smaller in magnitude. A complementary welfare analysis shows high compensated variations in the long run, ranging between 34% and 131% across food groups. This suggests that rising relative food costs have led to deterioration of the food security situation in Kenya, and the most severely affected households seem to be those that rely on informal markets and reside in rural areas. To improve food security, targeted income support could be a more effective policy than price support, given the much higher estimated expenditure elasticities.     

递增阶梯电价的收入再分配效应研究: 嵌入分时电价更有效吗*

本文从理论与实证角度分析了递增阶梯电价为实现收入再分配目的必然伴随着效率损失,进而探讨嵌入分时电价能否改善两难困境。理论模型刻画了递增阶梯电价追求再分配目的所致两类效率成本的特征、结构和类型,以及递增阶梯电价在实现再分配和最小化效率损失间的两难困境。基于杭州市居民用电和家庭收入等微观数据,使用工具变量,通过反事实场景构建和二次近乎理想需求函数（QUAIDS）模型,实证估算了阶梯电价为实现再分配目的而引致的家庭与社会效率成本,本文为系统评估和完善阶梯水价和气价等政策奠定了基础。     

Consistent Estimation of a Censored Demand System and Welfare Analysis: The 2012 VAT Reform in Spain

This paper analyses the effects that the 2012 VAT reform in Spain had on households’ welfare, focusing on a major expenditure group: food and non‐alcoholic beverages. Households’ demands are modeled as a two‐stage Quadratic Almost Ideal Demand System, which is then estimated by means of a consistent two‐step estimator introduced in Tauchmann ( 2010 ) and not previously used in studies of this type. This procedure allows consistent imposition of the traditional parameter restrictions that utility maximisation requires in the context of a censored model. Our results show that the welfare loss and the increment in the tax bill increase with income. We also show that expenditure on food and non‐alcoholic beverages grows less than proportionately with income. Consequently, households with lower income experience a greater welfare loss relative to their income levels. In short, the 2012 VAT reform in Spain, focusing on this expenditure group, can be considered as regressive.     

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.     

中国农村居民家庭医疗消费支出的影响因素及弹性分析

文章基于QUAIDS模型,采用2010年全国农村固定观察点截面数据,探讨农村居民家庭医疗消费支出的影响因素及其需求弹性,并进一步分析不同收入农户医疗消费的价格弹性。结论显示,家庭规模、家庭收入对医疗消费支出有正向影响,家庭劳动力人数、地区差异对其有负向影响;医疗服务大体上仍属于生活必需品,但随着收入的增加,农户将增加对医疗服务的消费;对农户进行收入补偿,能够减少食品消费价格上升对医疗消费支出的负向影响;相对于高收入农户,其他消费品价格的提高对低收入农户医疗消费的影响较大。