scholarly journals Preference shifts, structural breaks and the domestic demand for Chilean wine

2004 ◽  
Vol 42 (3) ◽  
pp. 487-506 ◽  
Author(s):  
Cristián Troncoso-Valverde
Keyword(s):  
Price Elasticity ◽  
Structural Breaks ◽  
Demand Function ◽  
Consumer Preferences ◽  
Domestic Demand ◽  
Domestic Market ◽  
Regime Shifts ◽  
Product Diversity

This paper investigates possible changes in Chilean domestic consumer preferences for wine through the estimation of a demand function that allows for structural breaks and regime shifts in the cointegrating relationship. Our findings support both higher own-price elasticity and higher substitutability between wine and beer after 1982, when a shift in regime in the demand function is found. We believe our findings might be due to the introduction of an increasing number of wine varieties in Chile during the last two decades. We argue that more wine varieties affect domestic consumer preferences by altering the product diversity available in the domestic market.

scholarly journals Effects of Country of Origin Labeling in the U.S. Meat Industry with Imperfectly Competitive Processors

2009 ◽  
Vol 38 (3) ◽  
pp. 406-417 ◽  
Author(s):  
Chanjin Chung ◽  
Tong Zhang ◽  
Derrell S. Peel
Keyword(s):  
Price Elasticity ◽  
Country Of Origin ◽  
Import Price ◽  
Consumer Welfare ◽  
Domestic Demand ◽  
Meat Industry ◽  
Equilibrium Displacement Model ◽  
Country Of Origin Labeling ◽  
Imperfectly Competitive ◽  
The U.S

The study examines the impacts of implementing mandatory country of origin labeling (COOL) on producer and consumer welfare in the U.S. meat industry. The equilibrium displacement model developed in this study includes twenty-nine equations representing retail-, processing-, and farm-level equilibrium conditions for the beef, pork, and chicken industries. Unlike previous studies, the model allows trade between domestic- and foreign-origin products and considers the imperfectly competitive market structure of meat processers. Empirical results show that without a significant increase in domestic meat demand, producers are not expected to benefit from the mandatory COOL implementation. Results of a sensitivity analysis indicate that consumers tend to bear more COOL costs than producers, as the own-price elasticity becomes more inelastic, and that producers’ benefits increase as the elasticity of domestic demand becomes more elastic with respect to the price of imported products. The existence of market power in upstream and downstream markets of processors negatively affects both consumer and producer surplus. One implication of our findings is that U.S. beef and pork producers’ promotion and advertising programs would be successful in expanding domestic demand when the programs make the own-price elasticity of domestic demand more inelastic and the cross-price elasticity of domestic demand more elastic with respect to import price.

scholarly journals Structural Breaks dan Ketidakstabilan Permintaan Uang di Indonesia

2017 ◽  
Vol 17 (2) ◽  
pp. 169-183
Author(s):  
Deviyantini Deviyantini ◽  
Iman Sugema ◽  
Tony Irawan
Keyword(s):  
Time Series ◽  
Exchange Rate ◽  
Interest Rate ◽  
Money Demand ◽  
Structural Breaks ◽  
Demand Function ◽  
Series Data ◽  
Time Varying ◽  
Money Demand Function ◽  
Time Varying Parameter

Structural Breaks and Instability of Money Demand in IndonesiaThis research aims to identify the sources of instability of the money demand function (M1 and M2) due to structural changes that occur as a result of economic shocks. These shocks, are technically shown by the presence of structural breaks in the data and can lead the parameters non-constancy. The instability of the money demand function was analyzed using the Gregory and Hansen test. The source of instability of the money demand was identified using time varying parameter model. This research used quarterly time series data from 1993Q1 to 2013Q4. The result of Gregory and Hansen test indicates there is no long term equilibrium between variables (money demand, income, domestic interest rate, foreign interest rate, exchange rate, and inflation) in the model, neither M1 nor M2 model. On the other word, money demand function is unstable. The source of the instability is exchange rate variable.Keywords: Stability Money Demand; Structural Breaks; Time Varying Parameter ModelAbstrakPenelitian ini bertujuan untuk mengidentifikasi sumber-sumber ketidakstabilan fungsi permintaan uang (M1 dan M2) akibat dari perubahan struktural yang terjadi karena adanya guncangan ekonomi. Guncangan tersebut, yang secara teknis ditunjukkan oleh keberadaan structural breaks di dalam data, dapat menyebabkan parameter menjadi tidak konstan. Ketidakstabilan fungsi permintaan uang dianalisis dengan menggunakan Gregory and Hansen test. Sumber ketidakstabilan dari permintaan uang diidentifikasi dengan menggunakan time varying parameter model. Penelitian ini menggunakan data time series dalam bentuk kuartalan dari 1993Q1 sampai 2013Q4. Hasil Gregory and Hansen test menunjukkan bahwa tidak ada keseimbangan jangka panjang di antara variabel-variabel (permintaan uang, pendapatan, suku bunga domestik, suku bunga luar negeri, nilai tukar, dan inflasi) di dalam model, baik pada model M1 maupun M2. Dengan kata lain, fungsi permintaan uang tidak stabil. Sumber ketidakstabilan tersebut berasal dari variabel nilai tukar.

scholarly journals Methodology for assessment of competitive potential of functional purpose confectionery in the context of global market trends

2020 ◽  
Vol 58 (3) ◽  
pp. 283-297
Author(s):  
Z. V. Lovkis ◽  
A. M. Marhunova ◽  
S. E. Tamashevich ◽  
S. A. Kandratsenka ◽  
A. N. Marhunov
Keyword(s):  
Consumer Preferences ◽  
Sugar Content ◽  
Global Market ◽  
Domestic Market ◽  
Added Value ◽  
Research Quality ◽  
Technical Program ◽  
Functional Efficiency ◽  
The World ◽  
Functional Purpose

The confectionery industry in the world belongs to dynamically developing sectors of the economy and fast-growing segments of the consumer market, due to the accelerated transformation of demand under influence of healthy nutrition and safety trends, as well as ability of the industry to adapt and develop considering consumer preferences through innovations and development of sustainable competitive strategies. New products with original consumer properties of functional purpose with a low sugar content and healthy fats are constantly appearing in the confectionery market. In this regard, assessment of products competitiveness should take into account the new qualities and availability to the consumer, which will allow commodity producers to form an efficient competitive strategy based on the analysis, plan innovative initiatives, and achieve success in promoting in the domestic and foreign markets. The paper presents the results of studying the trends in the world confectionery market, as well as marketing analysis of quality price parameters of products of domestic and foreign producers in the domestic market. An efficient methodology for assessing competitiveness of functional purpose confectionery products in terms of chocolate has been substantiated, and its testing results made it possible to identify the competitive advantages of domestic products in the field of organoleptic properties, nutritional value, functional efficiency and information content of packaging for the consumer. Use of the development in practice will make it possible to successfully position Belarusian chocolate as an original product of high quality, increase the added value of products for export, as well as form a stable consumer demand for healthy foods in the domestic market. Acknowledgments. The research was carried out as part of the Branch Scientific and Technical Program “Child Nutrition. Quality and safety” for 2016-2020, as well as the state program of scientific research “Quality and Efficiency of Agroindustrial Production” for 2016-2020, subprogram 1 “AIC Economy”.

Modeling volatility of Indian exchange rates under the impact of regime shifts: A study with economic significance analysis

2018 ◽  
Vol 12 (1) ◽  
pp. 43-59
Author(s):  
Dilip Kumar
Keyword(s):  
Exchange Rates ◽  
Long Memory ◽  
Structural Breaks ◽  
Forecast Accuracy ◽  
Regime Shifts ◽  
Policy Implications ◽  
Economic Significance ◽  
Volatility Model ◽  
Modeling Volatility ◽  
The Impact

In this paper, we assess the impact of regime shifts on the long memory properties of the Indian exchange rates. We make use of Sanso, Arago and Carrion (2004) Iterated Cumulative Sum of Squares (hereafter referred as AIT-ICSS) algorithm to detect the points of structural breaks in volatility series. Our findings indicate that incorporating the impact of sudden changes in volatility in the model indeed reduces the magnitude of long memory parameter. In the case of INR/JPY, we observe a shift in characteristics from long memory to mean reversion when the impact of regime shifts is included in the volatility model. Our findings also highlight that incorporating the impact of regime shifts in the model also improves the volatility forecast accuracy. Moreover, we implement a trading strategy based on risk-averse investor and find that the volatility forecasts based on the model which incorporate the impact of structural breaks provide substantial gains in return in comparison to volatility models with no structural breaks. These findings have important policy implications for financial market participants, investors and policy makers.

scholarly journals Willingness to Pay for Primary Education in Rural Pakistan

2004 ◽  
Vol 43 (1) ◽  
pp. 27-51 ◽  
Author(s):  
Najam Saqib
Keyword(s):  
Willingness To Pay ◽  
Price Elasticity ◽  
Primary Schools ◽  
Demand Function ◽  
User Fees ◽  
Tuition Fees ◽  
School Enrolment ◽  
Elasticity Of Demand ◽  
Rural Pakistan ◽  
Demand For Schooling

Highly subsidised public schools are the principal provider of education in the rural areas of Pakistan. Steady growth of school age population over time coupled with stagnant public funding has put enormous pressure on this system. The alternative of cost recovery through user charges has its own critics. They argue that introduction of tuition fees would substantially reduce the already small representation of low-income households in primary schools due to high price elasticity of their demand for schooling. Moreover, the revenuegenerating potential of this policy may also be limited due to same reason. The present study uses a discrete choice random utility model of household utility maximising behaviour to evaluate feasibility and consequences of introducing user fees in primary schools in rural Pakistan, particularly with reference to above criticisms. The demand function for school enrolment derived from this model allows us to test the hypothesis that price elasticity of demand for schooling varies with income. It also provides estimates of the parameters of the utility function needed for measuring parents’ willingness to pay for their childrens’ education if money generated from tuition fees is reinvested in education. The estimated demand function takes into account total price of education, including opportunity cost. Estimation results show that price elasticity of demand for school enrolment is higher for lower-income groups. Hence school enrolment of the poorest children would bear the main brunt of user fees policy. Children’s gender and age, father’s education, presence of T.V. in the household, and community variables like the presence of an elected district council member, electricity, and public transport in the village turn out to be significant influences on the probability of primary school enrolment. Willingness to pay for education is lower for poorer households and can generate revenues to cover only a fraction of the cost of running a school. Hence the need to search for other sources of financing primary education in rural Pakistan.

scholarly journals DEVELOPMENT POLICY OF THE PHARMACEUTICAL INDUSTRY IN GERMANY: LESSONS FOR UKRAINE

2020 ◽  
Vol 2020 (10) ◽  
pp. 63-86
Author(s):  
Olena SALIKHOVA ◽  
◽  
Daria HONCHARENKO ◽  
Keyword(s):  
Pharmaceutical Industry ◽  
Economies Of Scale ◽  
Consumer Preferences ◽  
Raw Materials ◽  
Domestic Market ◽  
Pharmaceutical Companies ◽  
Innovation Potential ◽  
The Creation ◽  
The Government ◽  
New Industry

The evolution of the development of the German chemical and pharmaceutical industry from technology borrowing to endogenous innovations and becoming a global leader is shown. It is substantiated that the government of the country promoted the development of a new industry by increasing budget allocations for the training of scientific and industrial personnel; research subsidies; subsidies for transportation and raw materials. It is shown that the formation of large companies has provided economies of scale and accelerated development. The creation of specialized research institutes under the auspices of the government initiated public-private partnerships in research funding, industry associations helped mobilize the public to support the industry, and competent company managers and industry representatives together with prominent statesmen provided concerted action to strengthen its innovation potential. Cultivating the national consciousness that the purchase of German goods is the key to the welfare of the state has determined consumer preferences and has become a powerful stimulus to expand supplies to the domestic market. The introduction of high customs tariffs on finished medicines has provided protection for the new industry in its infancy. The close cooperation of banks with pharmaceutical companies has contributed to the implementation of investment and innovation projects and external expansion. The creation of cartels by chemical and pharmaceutical companies was an institutional response to the unprecedented phenomenon of industrialization and catching up in Germany. It is revealed that at the present stage the Government of Germany through national and regional programs continues to promote the development of technological and innovative potential of pharmaceuticals. The expediency of introduction of mechanisms of endogenization of production development of medicines and medical devices in Ukraine, and also expansion of sales in the domestic market through introduction of preferences at public purchases in the context of protection of essential interests of safety and health of the nation is proved.

scholarly journals Structural Breaks, Stability and Demand for Money in South Africa

2015 ◽  
Vol 7 (5(J)) ◽  
pp. 79-90
Author(s):  
Sambulo Malumisa
Keyword(s):  
South Africa ◽  
Money Demand ◽  
Structural Breaks ◽  
Demand Function ◽  
Money Demand Function ◽  
Correction Model ◽  
Cointegrating Vector ◽  
Long Run ◽  
Maximum Likelihood Procedure ◽  
Policy Shifts

The paper tests the null hypothesis of a stable long-run money demand in South Africa over the period 1970-2013. We employ the Gregory-Hansen (GH) method to test for the possibility of structural breaks in the money demand function. The Johansen Maximum likelihood procedure is carried out to determine the cointegration vector from which existence of one cointegrating vector is supported. Also based on the GH criterion, there is existence of one cointegrating vector. GH proposes three structural breaks for the money demand function. Results suggest that endogenous breaks occurred in 1991 and 1994. The GH cointegration equations reject M1 whilst M2 and M3 pass and we proceed to estimate the error-correction model. Complemented by the CUSUM and CUSUM of squares, the tests carried out suggest that monetary policy shifts did not introduce instability.

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