Effects Of Price Changes Research Articles

Cocaine and heroin interact differently with nondrug reinforcers in a choice situation.

The present study used a rat choice model to test how cocaine or heroin economically interacted with two different nondrug reinforcers along the substitute-to-complement continuum. In Experiment 1, the nondrug alternative was the negative reinforcer timeout-from-avoidance (TOA)-that is, rats could press a lever to obtain a period of safety from footshock. One group of rats chose between cocaine and TOA and another group chose between heroin and TOA. The relative prices of the reinforcers were manipulated across phases while controlling for potential income effects. When cocaine was the reinforcer, rats reacted to price changes by increasing their allocation of behavior to the more expensive option, thereby maintaining relatively proportional intake of cocaine and TOA reinforcers across prices, suggesting these reinforcers were complements here. In contrast, when heroin became relatively cheap, rats increased allocation of income to heroin and decreased allocation of income to TOA, suggesting that heroin substituted for safety. Additionally, rats were willing to accept more footshocks when heroin was easily available. In Experiment 2, the nondrug alternative was saccharin, a positive reinforcer. Heroin and saccharin were complements, but there was no consistent effect of price changes on the allocation of behavior between cocaine and saccharin. As a model of the processes that could be involved in human drug use, these results show that drug-taking behavior depends on the type of drug, the type of nondrug alternative available, and the prices of both. (PsycInfo Database Record (c) 2024 APA, all rights reserved).

A demand analysis with a dynamic approach to LA/AIDS for the Italian bottled water industry and its related non-alcoholic beverages

This paper analyses the demand for non-alcoholic beverages in Italy with Istat and Bevitalia data, including bottled water, soft drinks and juices, over the period of 2011–2020, using a dynamic approach based on the Linear Approximate-Almost Ideal Demand System (LA/AIDS). The analysis takes into account the correlation among the bottled water, soft drink, and juice industries, and the effects of changes in prices, income, and quantities on the demand for each type of beverage. Our findings suggest that, in Italy, during the considered period, the income elasticity of the three products was positive, indicating that they are normal goods, albeit bordering on the line between necessary and luxury goods. Bottled water and juices are classified as luxury goods, whereas soft drinks are more inclined to be classified as necessary goods. Additionally, soft drinks and bottled water are price-elastic goods, whereas juices and bottled water, or juices and soft drinks, are price-inelastic goods. Our results also indicate that bottled water is the most widely consumed good, followed by soft drinks and juices. Finally, we recommend policy interventions aimed at promoting healthier consumption habits, such as taxes on sweet drinks or subsidies for drinking water consumption. Overall, our findings provide new insights into the dynamics of demand for non-alcoholic beverages in Italy, which can inform policy decision-makers focused on promoting public health and welfare.

Relative contributions of indirect taxes and inflation on inequality: What does the Turkish data reveal?

AbstractOne way inflation affects consumption inequality is through its varying impact on the purchasing power of different households. Indirect taxes, which affect commodity price levels, are another effective factor influencing consumption inequality. Turkey is a highly unequal country with a long history of high inflation. Moreover, indirect taxes have been used frequently as a policy tool in the last decades. This study develops a novel approach to examining the relative contributions of household inflation rates and indirect tax changes to real consumption inequality and applies it to the case of Turkey. The analysis is carried out using both household‐level data and artificial panel data created to apply the Shapley and Owen decomposition methods. The findings roughly can be summarized in two points. First, while nominal consumption during the 2003–2019 period became more equal, real consumption inequality increased as a result of price changes during that time. Variations in household inflation rates are the primary source of increased inequality. Second, changes in indirect taxes account for 31% to 68% of the unequalizing effect of price changes, depending on the method used. Results imply that monetary and indirect tax policy mix have been in favor of the rich in this period.

Structure of Vegetables Demand in India during Covid-19 Regime- An Econometric Approach

This study aimed to analyze the expenditure, own and cross-price elasticities of ten major vegetables in Southern India. using cross-sectional data from selected households in four southern states of India viz., Andhra Pradesh, Telangana, Karnataka and Tamil Nadu during 2020 to 2022. We use Working-Leser model, LA/AIDS model and QUAIDS model to compute elasticities and found QUAIDS model as the best fit. As expected the own-price elasticities for all the vegetables are negative and the expenditure elasticities are more than one, except tomato, lettuce and green sorrel. The cross-price elasticities showed that potato is complementarity to tomato, lettuce and green sorrel and the substitution effects of price change were not quite strong, except ivy gourd for bitter gourd; potato for ivy gourd and green sorrel for bitter gourd. Systematic differences in the absolute magnitudes of the expenditure elasticity and own-price elasticity were found and the demand for vegetables is largely influenced by the price change than the income/expenditure change. So, an appropriate price intervention policy by the Government may be more effective in influencing consumption pattern of vegetables enjoying more elastic demand.

Effect of Price Changes on Green Gram Yield in Tharaka South Sub-County, Tharaka Nithi County, Kenya

Effect of Price Changes on Green Gram Yield in Tharaka South Sub-County, Tharaka Nithi County, Kenya

Demand for in-app purchases in mobile apps—A difference-in-difference approach

Using five “freemium” mobile app games on six European markets we examine the effect of price changes on conversion rate, number of users and viewing of rewarded videos. Our difference-in-difference estimation relies on games being available on both the Apple and Google platforms with price changes on only one platform. Our main identification comes from exogenous adjustments of Apples prices in 2021. Own-price elasticities of conversion are in the -1 to -4 range. Watching of rewarded videos decreases as in-app prices decrease with an average elasticity of around 0.5, but overall play is not affected by changes in-app prices.

The Effects of Rising Energy Prices on Inflation in Croatia

The estimation of the price change effects caused by the impact of external shocks on the national economy is extremely important. The aim of this paper is to estimate the effect of the increasing global energy prices on the stability of the Croatian economy. The effects of the increase in energy prices are compared with other exogenous shocks, i.e., with the effects of the increasing gross wages and salaries and the increasing prices of imported goods and services. The impact of the changes in the prices of primary inputs on the trends in the economic sector prices was quantified using the input–output price model. The intensity of the transmission of the change in price of a primary input to other sectors through intersectoral dependence was analyzed. The results of the analysis indicate that the Croatian economy is extremely sensitive to energy price shocks. The estimated effects of increases in the prices of certain primary inputs, especially energy, on various economic sectors and on the overall economy are particularly significant when considering situations in which Croatia adopts the EUR, and when the price increases could affect the stability and successful completion of that process.

Price elasticities revisited: The effect of price changes caused by taxation on the amount of alcohol consumed

Price elasticity is an important indicator of alcohol consumption. The success of an alcohol policy largely depends on how sensitive the demand is to the price. The purpose of this paper is to determine the effect of vodka price changes on the amount of vodka and pure alcohol consumed by Russian citizens exploiting the variation caused by price regulations, and in particular, taxation. Demand for alcohol is sensitive to its price, as abundant research has shown. However, the price of alcohol, in turn, may depend on demand. To overcome the endogeneity, we used a sharp change in excise tax observed in Russia in 2011 to model the price of vodka using the regression kink design. Based on nationally representative households and individual survey data, we also used the Arellano–Bond method to take into account habit formation. Our results are close to those obtained in other countries but differ from price elasticity values calculated in some work based on Russian data. The results confirm the effectiveness of the tax policy in those years when it increased the real prices of alcohol.

World prices and business cycles in a small open input–output economy

The role of terms-of-trade shocks in driving economic fluctuations is revisited through a multisector small open economy model, where the various types of goods can all be consumed and employed as inputs. Under this assumption, we show that, unlike conventional wisdom, terms-of-trade shocks may not necessarily trigger an economic boom for the exporting country if its export goods are intensively employed or consumed domestically, with limited scope for substitution. We calibrate and estimate the proposed model using data from 15 emerging countries and find that it performs better than the standard model to explain the different impacts of terms-of-trade shocks across countries documented by Schmitt-Groh and Uribe (2018). Such results make the model an excellent new framework to extend the analysis of monetary policies and the effects of price changes. • This study uses a multisector SOE model with a realistic input–output structure. • Common models overestimate terms-of-trade shocks’ impacts in emerging countries. • Using export goods dampens the expansionary effects of terms-of-trade shocks. • High elasticity of substitution between goods neutralizes the dampening effects. • The model extends the analysis of the price change effects.

حقوق الأجيال القادمة في الثروات الطبيعية (النفط والغاز) وفق دستور

The upcoming generation's right to natural sources (oil and gas) is one of the issues that have been interested in at the national and international level. Such an interest caused to many international conventions and conferences which confirmed the right (oil and gas) and urged the democratic governments to assure such rights in their constitutional legislation and laws as general and obligating rules so as to save it and avoid losing it. Natural sources are one of the fundamental legal bases of the oil states which depend on it as a cause of power, sovereignty, a requirement of the current generation, and a guarantee for the upcoming generation. So, it is a joint point between the generations. The study identified the significance of involving the rights of the upcoming generations in the Iraqi government constitution 2005 item 111 and 112 and distributing the revenue. In addition, the study mentioned the effect of oil change in price on the upcoming generation rights.

A model for dual health care market with congestion differentiation

AbstractThe French market for specialist physician care has a dual legal structure: physicians must exclusively work in sector 1 and charge regulated fees or in sector 2, where they can freely set their fees. Patient out‐of‐pocket payments in sector 2 are partially covered by private insurance. The primary differentiating factor between both sectors is the number of patients per specialist, which in turn directly affects the overall quality of the service provided. We built an equilibrium model to analyze both specialists' decisions about which sector to work in, and patients' choice of physician and therefore sector. More specifically, the model allowed us to study the effect of changes in prices and economy‐wide patient‐to‐specialist ratios on profits and patients' utility associated with the services provided in each sector.

Maximum Profit Output Configuration of Multi-Reservoir Resource Exchange Intermediary

A model of a multi-reservoir resource exchange intermediary also defined as a commercial engine is proposed according to analogies and similarities between thermodynamics and economics. The optimal configuration of a multi-reservoir commercial engine with a maximum profit output objective is determined by applying optimal control theory. The optimal configuration consists of two instantaneous constant commodity flux processes and two constant price processes, and the configuration is independent of a number of economic subsystems and commodity transfer law qualitatively. The maximum profit output needs some economic subsystems to never contact with the commercial engine during commodity transfer processes. Numerical examples are provided for a three-economic-subsystem commercial engine with linear commodity transfer law. The effects of price changes of an intermediate economic subsystem on the optimal configuration of a three-economic-subsystem and the performance of optimal configuration are discussed. The research object is general, and the results can provide some theoretical guidelines for operations of actual economic processes and systems.

Effect of Price Reduction and Increased Service Frequency on Public Transport Travel

A random effects meta-analysis of the results from 15 projects involving price reduction and 9 projects involving increased service frequency showed that both price reduction and increased service frequency generated public transport travels. On average, the increased service frequency projects generated more travels by public transport than the price reduction projects. In the increased service frequency projects the proportion of travels generated by the increased frequency was strongly influenced by the size of the frequency increase. In the price reduction projects, we did not find a significant effect of the size of the price reduction on the proportion of travels generated by the price reduction. Finding that people’s use of public transport was related to the extent of the service offered suggests they have a need for transport that can be fulfilled with public transport. Although people appreciate lower fares in general, finding that use of public transport was not significantly related to the size of a price change suggests the effect of price change is uncertain.

Oral versus subcutaneous semaglutide for prevention of major adverse cardiovascular events: cost per outcome analysis of SUSTAIN-6 and PIONEER-6

ABSTRACT Background Semaglutide, a glucagon-like peptide-1 receptor agonist (GLP1a), reduces the risk of major adverse cardiovascular events (MACE) in patients with Type 2 diabetes mellitus (T2DM). An oral version of semaglutide is now available, and patients may prefer it over the subcutaneous form. Our objective was to compare the value for money of the two modalities by assessing the cost needed to treat (CNT) to prevent MACE. Methods The CNT to prevent MACE was figured by multiplying the one-year number needed to treat (NNT) with either oral or subcutaneous semaglutide by the annual cost of therapy. Efficacy estimates and the resulting NNT figures were extracted from the published results of the SUSTAIN-6 and the PIONEER-6 trials for the injectable and oral versions of semaglutide, respectively. Drug costs were estimated as 75% of the United States national average drug acquisition cost listing in June 2021. We performed a scenario analysis to mitigate the primary differences between the populations in the two trials. Sensitivity analysis was performed to evaluate the effect of price changes of the interventions. Results The CNT to prevent one MACE with subcutaneous semaglutide in SUSTAIN-6 was $966,693 ($594,888-$5,035,302) compared to $948,689 ($463,465-∞) with oral semaglutide in PIONEER-6. The scenario analysis demonstrated a 17% lower CNT for oral semaglutide. The difference between CNTs was sensitive to price fluctuations of the two interventions. Conclusions Oral and subcutaneous semaglutide prescribed to prevent MACE in patients with T2DM provide similar value for money. The choice between both therapies should be guided mainly by patient preferences.

A semiparametric approach to estimating reference price effects in sales response models

It is well known that store-level brand sales may not only depend on contemporaneous influencing factors like current own and competitive prices or other marketing activities, but also on past prices representing customer response to price dynamics. On the other hand, non- or semiparametric regression models have been proposed in order to accommodate potential nonlinearities in price response, and related empirical findings for frequently purchased consumer goods indicate that price effects may show complex nonlinearities, which are difficult to capture with parametric models. In this contribution, we combine nonparametric price response modeling and behavioral pricing theory. In particular, we propose a semiparametric approach to flexibly estimating price-change or reference price effects based on store-level sales data. We compare different representations for capturing symmetric vs. asymmetric and proportional vs. disproportionate price-change effects following adaptation-level and prospect theory, and further compare our flexible autoregressive model specifications to parametric benchmark models. Functional flexibility is accommodated via P-splines, and all models are estimated within a fully Bayesian framework. In an empirical study, we demonstrate that our semiparametric dynamic models provide more accurate sales forecasts for most brands considered compared to competing benchmark models that either ignore price dynamics or just include them in a parametric way.

The Effect of Price and Tax Policies on the Decision to Smoke or Use Smokeless Tobacco in India

This paper investigates the impact of cigarette prices on adults' smoking and smokeless tobacco (SLT) use initiation and cessation decisions in India from 1980 to 2017. We use individual-level data from the 2017 Global Adult Tobacco Survey (GATS) to recreate the smoking history of current or past adult tobacco users using self-reported data on the years of tobacco use, initiation, and cessation merged with historical data on cigarettes, bidis, and SLT product prices. To estimate the effect of price changes on smoking and SLT use transitions, we use a pooled linear model and propensity score matching (PSM) to construct an artificial treatment group where weights capture the likelihood of being an ever-smoker. We find that price increases are a statistically significant deterrent to smoking initiation, with price elasticity of initiation being on average -0.0236 (CI: -0.024 -0.023) and -0.000428 (0.0 - 0.0) for smoking and SLT, respectively. This implies, for example, that a 10% increase in prices results in a 0.24% smaller smoking initiation and 0.004% smaller SLT use initiation. We find that prices can also encourage quitting, but the effects are not always significant, with elasticities of 0.0218 (CI: 0.017 0.026) and 0.0026 (CI: 0.001 0.004) for smoking and SLT, respectively. This implies that a 10% increase in prices will result in a 0.22% increase in the probability of quitting smoking and a 0.03% increase in the probability of quitting SLT use. The elasticity varied by income group, gender, and between young and all adults, with larger effects among lower-income adults and especially among young females. Higher cigarette prices that can be achieved by tobacco tax increases can significantly reduce initiation and encourage cessation, thus improving public health, especially among the most vulnerable population subgroups.

The Welfare Economics of Reference Dependence

Empirical evidence suggests individuals often evaluate options relative to a reference point, especially seeking to avoid losses. We analyze welfare under reference dependence. We describe how welfare effects of policies depend on normative judgments about whether reference dependence reflects a bias or normative preference. Lowering reference points generally improves welfare, absent countervailing externalities or biases. Conversely, welfare effects of price changes depend strongly on normative judgments. We apply our theory to reference dependence exhibited in German workers' retirement decisions. Our results suggest positive welfare effects of increasing the Normal Retirement Age but ambiguous effects of financial incentives to postpone retirement.

Do We Exploit all Information for Counterfactual Analysis? Benefits of Factor Models and Idiosyncratic Correction

Optimal pricing, that is determining the price level that maximizes profit or revenue of a given product, is a vital task for the retail industry. To select such a quantity, one needs first to estimate the price elasticity from the product demand. Regression methods usually fail to recover such elasticities due to confounding effects and price endogeneity. Therefore, randomized experiments are typically required. However, elasticities can be highly heterogeneous depending on the location of stores, for example. As the randomization frequently occurs at the municipal level, standard difference-in-differences methods may also fail. Possible solutions are based on methodologies to measure the effects of treatments on a single (or just a few) treated unit(s) based on counterfactuals constructed from artificial controls. For example, for each city in the treatment group, a counterfactual may be constructed from the untreated locations. In this article, we apply a novel high-dimensional statistical method to measure the effects of price changes on daily sales from a major retailer in Brazil. The proposed methodology combines principal components (factors) and sparse regressions, resulting in a method called Factor-Adjusted Regularized Method for Treatment evaluation (FarmTreat). The data consist of daily sales and prices of five different products over more than 400 municipalities. The products considered belong to the sweet and candies category and experiments have been conducted over the years of 2016 and 2017. Our results confirm the hypothesis of a high degree of heterogeneity yielding very different pricing strategies over distinct municipalities. Supplementary materials for this article are available online.

The Effect of Price Changes and Teaspoon Labelling on Intention to Purchase Sugar-Sweetened Beverages: A Discrete Choice Experiment.

Childhood obesity is a major public health concern and sugar-sweetened beverages (SSBs) are a known contributor. SSB taxation and food labelling have been proposed as policies to reduce consumption by changing purchasing behaviours. The study aimed to analyse caregivers' preferences on commonly purchased SSBs in Australia and to determine the effect of price increases and teaspoon labelling on their purchasing intentions. We used a discrete choice experiment (DCE) to obtain data about choices between SSB and non-SSB alternatives. 563 caregivers, who had young children aged 3-7years, completed the experiment online. 286 were randomly allocated to receive choice sets with plain labelling while 277 were assigned to teaspoon labelling. Each participant completed nine choice scenarios where they chose between six SSB and non-SSB beverage options or a no-beverage option, with beverage prices varying between scenarios. While hypothetical, price and teaspoon labelling for sugar content for each beverage was obtained from an informal market survey. Responses from the DCE were modelled using random parameters logit within a random utility theory framework. Household income and children's consumption volumes of soft drink were used to explore preference heterogeneity. Using mixed logit as the final model, we found that higher reduction in intended purchases was observed for soft drink and fruit drink in teaspoon labelling than it was in plain labelling. Participants exposed to teaspoon labelling intended to purchase less of flavoured milk and fruit juice compared to those exposed to plain labelling. Compared to baseline prices, a hypothetical 20% increase in SSB prices and the presentation of 'teaspoons of sugar' labelling were predicted to reduce intentional SSB purchases and increase intentional non-SSB purchases. Within each labelling group, there were no significant differences of intentional purchases between the highest and the lowest income quintile, high and low consumers of soft drinks. However, compared to plain labelling, teaspoon labelling was predicted to strongly influence intentional purchases of SSBs and non-SSBs. This study suggests that a policy to increase SSB price and include teaspoon labelling would lead to a reduced consumption of SSBs and increased consumption of non-SSBs.

Consumption Subaggregates Should Not Be Used to Measure Poverty

Abstract Frequent measurement of poverty is challenging because measurement often relies on complex and expensive expenditure surveys that try to measure expenditures on a comprehensive consumption aggregate. This paper investigates the use of consumption “subaggregates” instead. The use of consumption subaggregates is theoretically justified if and only if all Engel curves are linear for any realization of prices. This is very stringent. However, it may be possible to empirically identify certain goods that happen to have linear Engel curves given prevailing prices, and when the effect of price changes is small, such a subaggregate might work in practice. The paper constructs such linear subaggregates using data from Rwanda, Tanzania, and Uganda. The findings show that using subaggregates is ill advised in practice as well as in theory. This also raises questions about the consistency of the poverty tracking efforts currently applied across countries, since obtaining exhaustive consumption measures remains an unmet challenge.