Browsing by Subject "demand system"
Now showing 1 - 3 of 3
Results Per Page
Sort Options
Item Assessing the demand for phytosterol-enriched products(2009-05-15) Yuan, YanPhytosterol is a healthful ingredient that helps reduce blood cholesterol levels. It has been over ten years since the first phytosterol-enriched product, Benecol margarine, was launched in Finland in 1995; however, understanding of this product is still limited. In addition, it has been shown in the literature that health-related concerns have an influence on consumers? decisions to consume harmful or beneficial ingredients. This study estimates the demand for three phytosterol-enriched products in the categories of margarine, orange juice and yogurt. The objectives of this study are (1) to estimate price and expenditure elasticities for phytosterol-enriched brands and comparative non-phytosterol brands, (2) to identify cannibalization effects with a proposed methodology, and, (3) to estimate the welfare effects associated with the introduction of a product. Subsuming LA/AIDS, Rotterdam, CBS and NBR demand systems, the Barten synthetic demand system is applied to margarine weekly scanner data. Phytosterol-enriched margarine brands (Benecol and Take Control) commanded significantly higher prices relative to other margarine brands. Strong substitutability among the phytosterol brands was evident as suggested by the statistically significant and relatively large compensated cross-price elasticities. Cannibalization is defined as the competition between products offered by the same firm. Cannibalization studies are important to multi-product firms because they provide insights into the benefits of offering product variety. In addition, the identification and assessment of cannibalization are integral factors for strategic decisions of new product introductions. However, there are no standard measures to identify its effects. We use the Barten synthetic demand system along with two conventional measures to illustrate that the use of cross-price elasticities derived from a flexible demand system is a viable alternative to identify cannibalization effects. The third objective analyzes the consumer welfare effects associated with a new functional food product introduction. Using the Barten synthetic model and pre- and post-introduction scanner data, we estimate direct price and variety effects associated with the introduction of a new functional food product (i.e., phytosterol-enriched product). With post-introduction data and an assumed demand structure, we also estimate indirect price effects. Our results suggest notable welfare effects consisting of a relatively small price effect and a large variety effect.Item Causality and aggregation in economics: the use of high dimensional panel data in micro-econometrics and macro-econometrics(2009-05-15) Kwon, Dae-HeumThis study proposes one plausible procedure to address two methodological issues, which are common in micro- and macro- econometric analyses, for the full realization of research potential brought by recently available high dimensional data. To address the issue of how to infer the causal structure from empirical regularities, graphical causal models are proposed to inductively infer causal structure from non-temporal and non-experimental data. However, the (probabilistic) stability condition for the graphical causal models can be violated for high dimensional data, given that close co-movements and thus near deterministic relations are oftentimes observed among variables in high dimensional data. Aggregation methods are proposed as one possible way to address this matter, allowing one to infer causal relationships among disaggregated variables based on aggregated variables. Aggregation methods also are helpful to address the issue of how to incorporate a large information set into an empirical model, given that econometric considerations, such as degrees-of-freedom and multicollinearity, require an economy of parameters in empirical models. However, actual aggregation requires legitimate classifications for interpretable and consistent aggregation. Based on the generalized condition for the consistent and interpretable aggregation derived from aggregation theory and statistical dimensional methods, we propose plausible methodological procedure to consistently address the two related issues of causal inference and actual aggregation procedures. Additional issues for empirical studies of micro-economics and macro-economics are also discussed. The proposed procedure provides an inductive guidance for the specification issues among the direct, inverse, and mixed demand systems and an inverse demand system, which is statistically supported, is identified for the consumer behavior of soft drink consumption. The proposed procedure also provides ways to incorporate large information set into an empirical model with allowing structural understanding of U.S. macro-economy, which was difficult to obtain based on the previously used factor augmented vector autoregressive (FAVAR) framework. The empirical results suggest the plausibility of the proposed method to incorporate large information sets into empirical studies by inductively addressing multicollinearity problem in high dimensional data.Item Essays on Applied Economics and Econometrics: Decadal Climate Variability Impacts on Cropping and Sugar-sweetened Beverage Demand of Low-income(2014-12-10) Jithitikulchai, TheepakornThis dissertation examines the economic impacts of ocean-related climate variability on U.S. crops and the effect sweetened beverage taxes would have on beverage consumption among low income food assistance program participants. The first essay estimates the effect of decadal climate variability (DCV) on crop yield, output, and revenue distribution moments controlling for temporal and spatial heterogeneity. The second essay estimates a demand system for beverages and the consumption effects of taxes on sugar-sweetened beverages (SSB). The DCV analysis endeavors to advance the literature by econometrically estimating the impacts of these climate phenomena on crops. The estimation is done developing an empirical model that combines the direct and indirect effects of DCV. The direct DCV effects are estimated with skew-normal regression, allowing effects on skewness. The indirect DCV effects on crops are passed through regional hydro-meteorological variables such as temperature, precipitation, drought, and rainfall intensity. This study provides evidence that DCV phase combinations are related to the regional changes in temperature, precipitation, and extreme events and that this alters crop yields, output, and revenue across the United States. In turn adaptations are examined and we find DCV information could help farmers profitably alter crop mixes. For the sugar-sweetened beverage investigation this study examines the demand elasticities of beverage purchases among low-income households participating in federal food assistance programs. Using scanner data from a New England supermarket chain with 3.8 million product-level purchases by over 47,000 households, we aggregate them by store level and month. We estimate a demand system model for eleven non-alcoholic beverages for different payment types. Our results suggest that an excise tax would be an effective means to reduce SSB consumption and increase healthier beverage purchases among low-income households.