Potato Importance for Development Focusing on Prices

This paper studies potato prices and consumption in the progress of economic development. Potato status tends to evolve from a luxury to a normal and, lastly, to an inferior good. In the developed world, where the potato thrived and became a food for the poor, prices of the inferior potato attract little interest due to general welfare, which further complicates discerning economic effects by computation. Contrarily, in many developing countries, due to supply constraints the potato is a relative expensive, non-staple, normal good, with little social significance. Whereas it is a common misconception that tastes in developing countries differ from advanced economies, low incomes, together with relatively high potato prices, present a real and obvious hindrance to wider potato use among the poor in the underdeveloped world. Local regressions on FAO data reveal empirical advantages favoring potato price system research in developing countries, more likely yielding predictable, statistically significant, unbiased results. Correct policies could increase potato importance in developing countries and stimulate sustainable and pro-poor growth where consumers receive affordable potatoes, while also producer incentives for greater productivity improve. Furthermore, potato-led research presents widening potential into also understanding general social structures of underdevelopment as similar factors explain both cross-border incomes and potato prices.

The Effect of Trade Policy on The Position of Indonesian Coffee Market among The Major Importing Countries

Indonesia is the largest coffee producer in the world after Brazil, Vietnam and Colombia, but it was confronted with market problems. This paper, therefore, analysed the demand system as the position market for Indonesian coffee, either green bean or roasted coffee in the main importing countries such as Germany, Japan and The United States. The linear Approximate Almost Ideal Demand System (LA/AIDS) model was used to analyse the position of Indonesian coffee and its competitors. Time series data from 1996 to 2017 were obtained for the analysis. Empirical results indicated that most of the slope coefficients were statistically significant and in accordance with microeconomic theory. The variables of trade policy effected the Indonesian coffee trade. Indonesian green bean was found to be elastic in Germany, Japan, and The United States. Then, Indonesian roasted coffee was found to be inelastic in Japan. Indonesian green bean was a luxury good only in Germany, but Indonesian roasted coffee was an inferior good in Germany and The United States. Both Indonesian green bean and roasted coffee were a necessity in Japan. Almost Indonesian coffee substitute for Brazilian coffee and Colombian coffee, and complementary with Vietnamese coffee as its competitor.

To the Question of Giffen's Parafox

The article is devoted to the construction and analysis of the simplest mathematical model illustrating the Giffen’s effect and the reasons and conditions for its manifestation. We analyse erroneous, but widely spread, ideas about Giffen’s goods as a good, the demand for which grows due to its relative cheapening against the rising prices for all consumed goods. Under the model it is shown that any good can be both valuable and of little value, at least if it has a more expensive substitute. This property is not an intrinsic and inalienable property of one or another good. The certain property is given to any good by a specific consumer due to its personal preferences and under the influence of existing prices. Inferior good, including such, the consumption of which is available only to an individual with a high level of income, may turn out to be a product of Giffen. Therefore, the consumption of Giffen goods cannot be considered as evidence of a low standard of living for the consumer. Because of the solution of the standard task on the consumer choice, it is shown that the increase in demand for an inferior good when its price is growing, which is the essence of the Giffen paradox, is the result of optim. It is shown that for the manifestation of the Giffen effect it is necessary that the amount of funds allocated by the consumer for acquiring low value good and its more expensive substitute gets into a certain rather narrow range of values.

Economic policy uncertainty and demand for international tourism: An empirical study

The sensitivity of countries to the global macroeconomic uncertainty is directly related to the income level affecting, therefore, the demand for the outbound international tourism. Precisely, we observe that a higher economic policy uncertainty leads to more departures and more total expenditures but less expenditure per tourist – this finding is the first contribution of this article since it suggests that outbound tourism might be considered as an inferior good. In an uncertain context increasing the probability of decrease in the agents’ wealth, the population travel more but spend less money per trip suggesting that these travels are mainly made in neighbour countries. A higher uncertainty also induces a higher demand for outbound international tourism but less touristic expenditures in low- and lower-middle-income economies. These findings show the multifaceted aspect of tourism since it suggests an emigration effect that we discuss in this article.

On Three Standard Results in the Theory of Insurance Demand

This article re-examines three standard results in the theory of insurance demand: (i) full coverage with a fair premium and partial coverage with an unfair premium; (ii) insurance is an inferior good under decreasing absolute risk aversion (DARA) and (iii) insurance may be a Giffen good under DARA. It has been shown recently that (i) holds for the class of insurance policies in which maximum coverage fully covers the potential loss. We show that whether (i) holds beyond this class of policies is indeterminate. In addition, we employ a unified framework to investigate the effects of changes in initial wealth and price. In particular, we show that both (ii) and (iii) hold for a certain class of insurance policies which include all commonly-used types of policies. The result also provides a unified treatment of several results in the extant literature.

ANALISIS PERMINTAAN TELUR AYAM DI KABUPATEN MAGETAN

This research aims to identify and to analyze the variables which influenced the chicken egg demand in Magetan District and to know its elasticity. This research used descriptive and analytical method. The research location was chosen purposively in Magetan. By using 27 years time series data, this study applied Cobb Douglass demand functing with OLS method. The results showed that the price of chicken egg race, chicken meat price, rice price, population and income per capita have significant effect on chicken egg demand in Magetan District. Race egg price has inelastic elasticity since its value is negative (-0,280). Chicken meat price has subtitute elasticity since its value is positive (0,911). Rice price has complementary elasticity since its value is negative (-0,233). Income elasticity has a negative (-0,476) value means that chicken egg is an inferior good for Magetan District.

Exploring the environmental Kuznets curve for CO2 and SO2 for Southeast Asia in the 21st century context

This study aims to investigate the relationships between economic development and environmental degradation regarding the emissions of CO2 and SO2 in Southeast Asia (SEA). The pooling data consist of 10 countries, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, the Philippines, Thailand, and Vietnam, in the period 2003-2012. Furthermore, income elasticity of CO2 and SO2 emissions is computed for each country to observe the sensitivity of environmental degradation through the emissions of CO2 and SO2 brought by economic development. The results indicate that CO2 displays an inverted U-shape pattern, whereas SO2 has decreased at an increasing rate since 2003. It is expected that SO2 will increase as the SEA economies further develop. The turning points for both CO2 and SO2, indicate that the current SEA income level has not reached the turning point. The income elasticities show that income elasticities for CO2 are positive for all 10 countries. Both Singapore and Malaysia are classified as countries with high income. However, Singapore, with 0.64%, has the highest income elasticity, and Malaysia, with 0.15%, has the second lowest. There is no indication that wealthy countries have a significant impact on CO2 through economic development. Income elasticities for SO2 of each country are all negative. This suggests that SO2 is an inferior good. Brunei, with 8.41%, has the most sensitivity toward change in SO2 emissions, whereas Myanmar, with only 0.58%, is the least sensitive to SO2 emissions.

A GLOBAL FOOD DEMAND MODEL FOR THE ASSESSMENT OF COMPLEX HUMAN-EARTH SYSTEMS

Demand for agricultural products is an important problem in global change economics. Food consumption will shape and be shaped by global change through interactions with bioenergy and afforestation, two critical issues in meeting international goals. We develop a model of food demand for staple and nonstaple commodities that evolves with changing incomes and prices. The model addresses a long-standing issue in estimating food demands, the evolution of demand relationships across large changes in income and prices. We discuss the model, some of its properties and limitations. We estimate parameter values using pooled cross-sectional-time-series observations and Bayesian Monte Carlo method and cross-validate the model by estimating parameters using a subset of the observations and test its ability to project into the unused observations. Finally, we apply bias correction techniques borrowed from the Earth system modeling community and report results. We find that the demand for food rises rapidly as income initially increases from zero. Demand for staples peaks at under $1000 per person per capita. Nonstaple food demands increase steadily with income. While staples are an inferior good at per capita incomes greater than $1000, we see no evidence that there is a range of per capita income for which staples are Giffen goods.