Econometric Model Of Demand Research Articles

How tourists ‘escaping the heat’ may drive future increases in municipal water demand in Oregon coastal communities

Little is known about the effect of future weather and climate on municipal water demand in coastal communities with tourist-centric economies. To address this knowledge gap, we used an econometric model of monthly water demand that allowed for non-linear responses to weather variables to estimate temperature-response functions for demand from a sample of communities in the Oregon Mid-Coast. A main result is that local temperature was not a significant driver of variability in monthly water demand but that temperature in the Willamette Valley—the source of most tourists to the Oregon coast—was. We assumed that the increase in demand in response to higher Willamette Valley temperature arose from an increase in tourists escaping the heat in the Willamette Valley for cooler conditions on the coast. Applying the temperature response functions to scenarios of future climate to the year 2070 led to projected increases in water demand independent of other factors. Whether future tourism is either constrained by the local resident population that serves tourism or is constrained by the potential tourist population in the Willamette Valley, the climate-change contribution to projected water demand is generally of comparable magnitude to—if not greater than—the contribution from resident population change alone over the next 50 years. For communities where the population is projected to decline, the climate effect may more than offset the effect of declining population, resulting in a net positive change in demand.

An econometric model for non-timber forest products in the Brazilian Amazon

The objective of this study is to identify the determinants of Non-Timber Forest Products (NTFPs’) supply and demand in the Amazon region. The method applied was an econometric model of supply and demand in a log-linear form. Based on consumer and firm theories as well as studies on the market for extractive products, we developed models of supply and demand for NTFPs. The models were estimated by Ordinary Least Squares (OLS) in the log-log functional form, allowing to obtain the elasticities of the variables that affect the NTFPs supply and demand. The results indicated that during the study period, the behavior of the NTFPs market was stable in terms of the price and the quantities produced. These products displayed low elasticity in relation to price, both on the supply and the demand sides. This indicates that the cultivation of NTFPs (producing species) is a better option than the expansion of extractive activity. We conclude that the modernization of extractive production, the development of the products, and government support for commercialization are essential for the development of sector and the local community

Selecting correct functional form in consumption function: Analysis of energy demand at household level.

In the estimation of demand functions for energy resources, parametric econometric models of energy demand are commonly used to predict future energy needs. The functional forms commonly assumed in parametric energy demand models include linear functional forms, log-linear forms, trans-log models, and an almost ideal demand system. It is frequently debated which is the "best" functional form to employ in order to accurately represent the underlying relationships between the demand for various energy resources and explanatory variables such as energy prices, income, and other demographic factors. The study has focused on developing proper non-nested tests to compare the two demand systems, the double log model and the LA-AIDS model. C-test is used to test the validity of using the two parametric functional forms in models of residential energy demand. Cross-sectional household-level data of the Pakistan Social and Living Standards Measurement (PSLM) 2013-14 and Asian Development Bank (ADB) Asia and Pacific 2018 are used. Results indicate that the LA-AIDS model is better than the double log model. The estimated elasticity of own prices, cross-prices, and income in terms of spending, family size, and equipment are particularly important to producers and policymakers in making investment and incentive choices. A significant part of the budget for families is for electricity, natural gas, firewood, and other fuels; smaller budget shares are set down to other items such as kerosene oil, cylinder gas, and diesel. Household per capita demand for energy resources will rise over the next decade; therefore, the government needs to make progress on developing energy-saving strategies. If not addressed the issue properly, we may face energy shortages and high energy import bills.

Substitution Effects and the Transnational Demand for European Soccer Telecasts

European soccer leagues’ internationalization efforts have significantly increased the number of available telecasts abroad. In the US, this has fueled discussions about the degree of audience overlap between networks broadcasting international soccer. However, whether and to what extent telecasts of different leagues indeed constitute substitutes has never been explored empirically. Drawing on US audience data for Bundesliga telecasts, we analyze the impact of scheduling clashes with Premier League, La Liga, and Serie A games. Econometric demand models reveal sizeable substitution effects caused primarily by overlapping Premier League games, suggesting significant competition for the soccer audience in the US market.

Consumer welfare consequences of the California drought conservation mandate

AbstractWe measure consumer welfare losses from reductions in water use following California's conservation mandate in 2015, which imposed utility service area‐specific conservation targets of 4% up to 36%. We document imperfect compliance with the mandate and discuss factors that may explain the pattern of reductions ultimately observed. The basis for calculating welfare losses is an econometric model of residential water demand that yields local demands with elasticities ranging from −0.56 to −0.10. In terms of economic efficiency, we estimate a 20% gain in consumer welfare under the efficient allocation of conservation reductions relative to the observed pattern of reductions.

Differential price-responsiveness of smoking behaviors among non-Hispanic African Americans and non-Hispanic whites in the United States.

Non-Hispanic African Americans (African Americans) smoke fewer cigarettes per day (CPD) and are more likely to be non-daily smokers than non-Hispanic whites (whites). Little is known about how changes in cigarette prices might contribute to these differences. This study aimed to measure the price-responsiveness of smoking participation, non-daily smoking among current smokers and smoking intensity among daily or non-daily smokers for African Americans and compare the price-responsiveness estimates with those for whites. Analysis of data from the 2009-14 National Adult Tobacco Surveys and cigarette price data from the Tax Burden on Tobacco report. United States. A total of 19 232 African American and 197 939 white adults aged 18+. We used a three-part econometric model of cigarette demand to estimate the price-responsiveness of smoking participation, daily versus non-daily smoking and smoking intensity. The model controlled for secular variation, state-level anti-smoking sentiment and smoke-free air laws and socio-demographics. In 2009-14, 20.2% of African Americans and 17.7% of whites identified as current smokers; 70.2% of African American smokers and 81.4% of white smokers smoked daily. The price elasticity of smoking participation was significant for whites at -0.16 [95% confidence interval (CI)=-0.23, -0.09], indicating that a 10% increase in prices would reduce smoking participation by 1.6%, but not statistically significant for African Americans, and this racial/ethnic differential price responsiveness was not statistically significant. The price elasticity of smoking intensity was statistically significant for African American daily smokers at -0.29 (95% CI=-0.42, -0.16), but not statistically significant for white daily smokers, and this racial/ethnic differential price-responsiveness was statistically significant. The price elasticity of daily versus non-daily smoking among current smokers, and the price elasticity of smoking intensity among non-daily smokers were not statistically significant for either racial/ethnic group. In the United States, cigarette price increases may have stronger effects on decreasing daily smokers' consumption among African Americans than among non-Hispanic whites.

A Panel Data Estimation of Domestic Water Demand with IRT Tariff Structure: The Case of the City of Valencia (Spain)

In urban water provisioning, prices can improve efficiency, contributing to the achievement of the environmental objective. However, household responses to price changes differ widely based on the household characteristics. Analyses performed at the aggregate level ignore the implications of water demand incentives at the individual household level. A large data sample at the household level enables estimation of econometric models of water demand, capturing the heterogeneity in domestic consumption. This study estimated the domestic water demand in the city of Valencia and its elasticity, along with the demands of its different districts and neighbourhoods (intra-urban scale analysis). Water price structure in Valencia is completely different from that of other Spanish cities: it is a price structure of increasing volume (increasing rate tariffs, IRT). For this estimation, from a microdata panel at the household level, the demand function with average prices for the period 2008–2011 was estimated using panel data techniques including a fixed effect for each neighbourhood. The domestic water demand elasticity at the average price in Valencia was estimated at −0.88 (which is higher than that estimated for other Spanish cities). This value indicates an inelastic demand at the average price of the previous period, which can cause consumers to overestimate the price and react more strongly to changes.

Future changes in consumption: The income effect on greenhouse gas emissions

Abstract The scale and patterns of household consumption are important determinants of environmental impacts. Whilst affluence has been shown to have a strong correlation with environmental impact, they do not necessarily grow at the same rate. Given the apparent contradiction between the sustainable development goals of economic growth and environmental protection, it is important to understand the effect of rising affluence and concurrent changing consumption patterns on future environmental impacts. Here we develop an econometric demand model based on the data available from a global multiregional input-output dataset. We model future household consumption following scenarios of population and GDP growth for 49 individual regions. The greenhouse gas (GHG) emissions resulting from the future household demand is then explored both with and without consideration of the change in expenditure over time on different consumption categories. Compared to a baseline scenario where final demand grows in line with the 2011 average consumption pattern up until 2030, we find that changing consumer preferences with increasing affluence has a small negative effect on global cumulative GHG emissions. The differences are more profound on both a regional and a product level. For the demand model scenario, we find the largest decrease in GHG emissions for the BRICS and other developing countries, while emissions in North America and the EU remain unchanged. Decreased spending and resulting emissions on food are cancelled out by increased spending and emissions on transportation. Despite relatively small global differences between the scenarios, the regional and sectoral wedges indicate that there is a large untapped potential in environmental policies and lifestyle changes that can complement the technological transition towards a low-emitting society.

Estudo econométrico dos efeitos da disponibilidade de crédito na demanda por transporte aéreo no Brasil

A maior disponibilidade de crédito tem o potencial efeito de fomentar o consumo em uma economia, pelo menos a curto e médio prazos. No caso do transporte aéreo, pode estimular os parcelamentos de passagens aéreas, atraindo os gastos de extratos de consumidores de renda mais baixa, além de alavancar um número maior de viagens por parte do público tradicional. Adicionalmente, as empresas e corporações nacionais, com capital de giro potencialmente maior, em teoria podem dispender mais em viagens corporativas. O presente trabalho desenvolve uma modelagem empírica para testar o impacto na demanda por transporte aéreo da maior concessão de crédito na economia brasileira do final dos anos 2000. Utilizando dados estatísticos obtidos junto à Agência Nacional de Aviação Civil, montou-se um painel de dados com pares de cidades brasileiras para estimar um modelo econométrico de demanda por viagens aéreas, utilizando um estimador de variáveis instrumentais. Com esse modelo, testou-se diretamente a hipótese de efeito da disponibilidade de crédito na economia local como um dos fatores explicativos da demanda da aviação comercial brasileira no período.

Estimation of residential electricity demand in Hong Kong under electricity charge subsidies

Over the past decade, the Hong Kong (HK) government provided electricity charges subsidies for residential accounts to alleviate the burden of inflation and, later, the burden of economic downturn. In this study, we estimate an econometric model of residential electricity demand and test the existence of a stable long-run relationship for the period 1980–2016, while accounting for the relief measures set out by the HK government since 2008. Empirical results suggest that there exists a long-run relationship among residential electricity consumption, electricity price, income per capita, and weather variables (temperature or cooling degree days). In the absence of electricity charge subsidies, the demand is found to be both price and income inelastic. On the other hand, HK's residential electricity consumers are unresponsive to price and income changes when electricity subsidies are in place. Following its new carbon reduction plan, HK is gradually phasing out coal for electricity generation to replace it mainly with natural gas. Our results suggest that new residential electricity charge subsidies can lessen the effectiveness of6 climate policies aimed at reducing electricity consumption through increases in the electricity price. • Econometric estimation of residential electricity demand • Inelastic price and income elasticities; smaller short-run (absolute) elasticities • Perfectly inelastic demand when electricity charge relief measures are in place • Environmental policies to decrease electricity consumption and carbon emissions through higher tariffs can have minimal impact

Demand for cash: an econometric model of currency demand in India

ABSTRACTIn 2016, two high-value currency notes were withdrawn from circulation in India (popularly known as the ‘demonetization’ policy). Data from the Reserve Bank of India shows that currency in circulation has not only returned to pre-demonetization levels but has exceeded it. Despite the recent increase in use of non-cash substitutes, cash usage in India persists. We present new evidence on the association between the shadow economy, informality, and currency in circulation using annual data between 1970 and 2016. We find that high-value currency in circulation is inelastic to growth of alternate payment instruments. Implications for currency management policies are discussed.

The Determinants of an Econometric Demand Model for Beverages

The Determinants of an Econometric Demand Model for Beverages

Demand Analysis of Termite Control Service in Jakarta

Termite is an economically important pest species in the pest control industry and considered as one of the urban pests. Although it had caused a great loss, only a few studies on termite control demand were found. This study attempted to identify determinants and build the econometric model of termite control demand in Jakarta. The findings are expected to give the pest control industry a better understanding of the pest control market. Two ad-hoc models, linear and double log models, were investigated using the Least Square Dummy Variable (LSDV) technique. The results showed that the double log model was found better than the linear model based on sign expectation and significance. The price of termite control service, building permits, price of structural metals and dummy variables for the large company were statistically significant determinants, whereas dummy variables for risk class were not. Termite control demand for medium and small companies was not significantly different, but both of them were significantly lower than demand for the large company. This study also found that the demand for termite control was elastic.Keywords: demand analysis, econometric modeling, pest control, termite control, urban pest

“All along the curves”: Bridging the gap between comparative statics and simultaneous econometric models

A simultaneous econometric model of supply and demand provides estimates of own-price effects and the effect of exogenous variables on supply or demand. Most of the time economists use elasticities derived from econometric analysis in a ceteris paribus context, more seldom in a total elasticity setting (Buse in J Farm Econ 40:881–891, 1958). Perhaps even more seldom net effects of exogenous changes on prices and quantities are determined in a Muth (Oxf Econ Pap 16:221–234, 1964) type model. In this paper, we replicate the econometric model by Epple and McCallum (Econ Inq 44:374–384, 2006) and use it to specify a comparative static model that quantifies the period-to-period net effects on price and quantity from observed changes in the exogenous variables. Furthermore, we extend (Braekkan et al. in Eur Rev Agric Econ 45:531–552, 2018) approach for computing unexplained demand shifts by also calculating unexplained shifts in supply. This bridges the gap between comparative statics and simultaneous econometric models. Unexplained supply and demand shifts account for the unexplained variation in the endogenous variables. The data used in this application are from the US broiler chicken market.

Length of stay of international tourists in Spain: A parametric survival analysis

The goal of this paper is to study the determinants of length of stay of international tourists in Spain using a survival analysis approach. We incorporate unobserved heterogeneity using frailty models to account for misspecification or omitted covariates. The explanatory variables included in the econometric model of tourist demand in terms of length of stay were selected according to the neoclassical theory of consumer choice and the information available in the Tourist Expenditure Survey undertaken by the Spanish Institute for Tourism Studies. We analyze to what extent the tourists' socio-demographic profiles and the trip characteristics determine length of stay. We find that the most important factors are country of origin, destination, and time and budgetary constraints.

Econometric Model of Supply and Demand for Mining Construction Materials in the Jeneberang River, Gowa Regency, South Sulawesi

Econometric Model of Supply and Demand for Mining Construction Materials in the Jeneberang River, Gowa Regency, South Sulawesi - written by Andi Arjan , Arikah Nurhusna Afifah , Yubelium Andrew Patila published on 2019/07/01 download full article with reference data and citations

Are passengers less willing to pay for flying turboprops? An empirical test of the “turbo aversion hypothesis”

Turboprop airplanes are known for their fuel efficiency on short-haul routes and thus naturally have a competitive advantage over jets in regional air transport. In Brazil, however, the market share of turboprops has considerably decreased in regional routes since the early 2010s. One possible explanation for this trend is the “turbo aversion hypothesis” (TAH), in which passengers dislike flying in turboprops, making carriers in regional markets more prone to operate either regional or smaller narrow-body jets based on demand-side economics. We empirically test this hypothesis by employing an econometric model of air travel demand in Brazilian regional markets. We find strong evidence rejecting the TAH, suggesting that the cost-side economics of the falling fuel prices apparently fully explains the observed erosion of the turboprop participation in the market.

Are Passengers Less Willing to Pay for Flying Turboprops? An Empirical Test of the 'Turbo Aversion Hypothesis'

Turboprop airplanes are known for their fuel efficiency on short-haul routes and thus naturally have a competitive advantage over jets in regional air transport. In Brazil, however, the market share of turboprops has considerably decreased in regional routes since the early 2010s. One possible explanation for this trend is the “turbo aversion hypothesis” (TAH), in which passengers dislike flying in turboprops, making carriers in regional markets more prone to operate either regional or smaller narrow-body jets based on demand-side economics. We empirically test this hypothesis by employing an econometric model of air travel demand in Brazilian regional markets. We find strong evidence rejecting the TAH, suggesting that the cost-side economics of the falling fuel prices apparently fully explains the observed erosion of the turboprop participation in the market.

Modelling trip generation using mobile phone data: A latent demographics approach

Traditional approaches to trip generation modelling rely on household travel surveys which are expensive and prone to reporting errors. On the other hand, mobile phone data, where spatio-temporal trajectories of millions of users are passively recorded has recently emerged as a promising input for transport analyses. However, such data has primarily been used for the development of human mobility models, extraction of statistics on human mobility behaviour, and origin-destination matrix estimation as opposed to the development of econometric models of travel demand. This is primarily due to the exclusion of user demographics from mobile phone data made available for research (owing to privacy reasons). In this study, we address this limitation by proposing a hybrid trip generation model framework where demographic groups are treated as latent or unobserved. The proposed model first predicts the demographic group membership probabilities of individuals based on their phone usage characteristics and then uses these probabilities as weights inside a latent class model for trip generation, with different classes representing different socio-demographic groups. The model is calibrated using the call log data of a sub-sample of users with known demographics and trip rates extracted from their GSM mobility data. The performance of the hybrid model is compared with that of a traditional trip generation model which uses observed demographic variables to validate the proposed methodology. This comparative analysis shows that the model fit and the prediction results of the hybrid model are close to those of the traditional model. The research thus serves as a proof-of-concept that the mobile phone data can be successfully used to develop econometric models of transport planning by having additional information for a subset of the users.

THE ECONOMETRIC MODELING OF HIGHER EDUCATION SYSTEM IN THE MODERN LABOR MARKET

The article shows the main theoretical and practical results of the research of higher education system in Ukraine, which are based on the use of econometric methods and systematic approach as well as available official statistics. The basic factors of internal and external environment of the higher education system are considered and distinguished. The conceptual scheme of interaction of these factors in the operation of the higher education system of Ukraine has been offered. A number of econometric models, which describes the process of functioning of the higher education system as a whole, and also individual components of the processes i.e.recruitment and graduation of students has been proposed. On the basis of available statistical information, an econometric model of demand for higher education services has been built.