Estimation Of Demand Function Research Articles

Estimations of Catch Fish Demand Function of Consumers in Uttar Pradesh

This paper dealt with estimation of catch fish demand function in Uttar Pradesh. Demand functions desirable the relationship between the quantity demanded and the various factors affecting the demand. Demand is determined by many factors simultaneously yet in traditional demand curve, the quantity demanded of a product is assumed to depend solely on price of product. Consumer survey was conducted for estimation of demand function of fish species. The total amount of fish consumed per day in kg. price of different fish species, income of the consumer house hold were collected from the market. When the preference for fish will increase by 1 unit the quantity demanded for fish was increased by 0.16 units. The result justifies that when price of substitute good increase the demand for main commodity increases. The result was also in accordance to when price of fish will increase, the demand for fish will go down. Similarly the preference pattern for fish also follows the economic logic. The similar pattern as the linear demand function, the explanatory variable like income, price of mutton, price of fish and preference for fish were found significant. Interestingly, the estimated co-efficient of price of fish was estimated to be -0.39, indicating there by when price of fish was increased by 1% he quantity demanded for fish was decreased by 0.39 percent. For this reason the estimated co-efficient of C-D demand function with respect to prices of fish will be used in computation of economic surplus.

Real Exchange Rate Uncertainty and the Import of Agricultural Main Goods (EGARCH MODEL)

This article investigated the effect of real exchange rate uncertainty on the import of agricultural main goods in Iran over the period of 1991–2012. The aim of this article was to test the following hypothesis: “The uncertainty of real exchange rate has a negative effect on the import of agricultural main goods”. Uncertainty series of the exchange rate are usually estimated using GARCH and ARCH models and the asymmetric effects are also analyzed using these models. Exchange rate uncertainty index resulted from the fluctuations of the real exchange rate is calculated through Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model and is regarded as the proxy of real exchange uncertainty rate. According to the uncertainty analysis and measuring the exchange rate uncertainty by EGARCH model, and eventually based on demand function estimation, it was realized that there was a long term relation between importing agricultural main goods and real exchange rate uncertainty. The obtained results proved that real exchange rate uncertainty had a negative effect on the import of agricultural main goods in Iran and the demand for their import is positively affected by the real national income.

Estimating Demand Function of the Fixed Line Telecommunication in Iran

In the communication age, every country's success depends on telecommunication. In the last years, there has been great changes in telecommunication of Iran, and there has been momentum too. In this paper, demand function of fixed line calls in 30 provinces of Iran in 2012 has been estimated using undated data. In Iran, fixed line calls happen inside cities, inside provinces and between cities. According to Economy Council of Iran, rate of fixed line calls per pulse was fixed from 2004 to 2012. Estimation of demand function of calls between landlines inside a city is meaningless. Nonetheless, in calls between landlines between cities, inside a province and between two provinces, in addition pulse rate, the distance between provinces is essential in estimating expenses. In other words, call rate changes from city to city. In this paper, the effective cost of calls in different cities is calculated, and landline network's demand function is calculated.

Estimating Short and Long-Run Demand Elasticities: A Primer with Energy-Sector Applications

Many empirical exercises estimating demand functions, whether in energy economics or other fields, are concerned with estimating dynamic effects of price and income changes over time. This paper first reviews a number of commonly used dynamic demand specifications to highlight the implausible a priori restrictions that they place on short and long-run elasticities. Such problems are easily avoided by adopting a general-to-specific modeling methodology. Second, it discusses functional forms and estimation issues for getting point estimates and associated standard errors for both short and long-run elasticities—key information that is missing from many published studies. Third, our proposed approach is illustrated using a dataset on Minnesota residential electricity demand.

Exact Estimation of Demand Functions under Block-Rate Pricing

This article proposes an exact estimation of demand functions under block-rate pricing by focusing on increasing block-rate pricing. This is the first study that explicitly considers the separability condition which has been ignored in previous literature. Under this pricing structure, the price changes when consumption exceeds a certain threshold and the consumer faces a utility maximization problem subject to a piecewise-linear budget constraint. Solving this maximization problem leads to a statistical model in which model parameters are strongly restricted by the separability condition. In this article, by taking a hierarchical Bayesian approach, we implement a Markov chain Monte Carlo simulation to properly estimate the demand function. We find, however, that the convergence of the distribution of simulated samples to the posterior distribution is slow, requiring an additional scale transformation step for parameters to the Gibbs sampler. These proposed methods are then applied to estimate the Japanese residential water demand function.

Estimating Demand for Mobile Applications in the New Economy

In 2013, the global mobile app market was estimated at over US$50 billion and is expected to grow to $150 billion in the next two years. In this paper, we build a structural econometric model to quantify the vibrant platform competition between mobile (smartphone and tablet) apps on the Apple iOS and Google Android platforms and estimate consumer preferences toward different mobile app characteristics. We find that app demand increases with the in-app purchase option wherein a user can complete transactions within the app. On the contrary, app demand decreases with the in-app advertisement option where consumers are shown ads while they are engaging with the app. The direct effects on app revenue from the inclusion of an in-app purchase option and an in-app advertisement option are equivalent to offering a 28% price discount and increasing the price by 8%, respectively. We also find that a price discount strategy results in a greater increase of app demand in Google Play compared with Apple App Store, and app developers can maximize their revenue by providing a 50% discount on their paid apps. Using the estimated demand function, we find that mobile apps have enhanced consumer surplus by approximately $33.6 billion annually in the United States, and we discuss various implications for mobile marketing analytics, app pricing, and app design strategies.This paper was accepted by Alok Gupta, special issue on business analytics.

Policy Suggestion as the Analysis of Bio-ethanol Demand

As a result of bio-ethanol demand function estimation on time series data to estimate economic impact of bio-ethanol, the statistically significant model is estimated. In the demand model demand elasticity of bio-ethanol shows elasticity, and it is represented with incomplete substitute relation to gasoline in terms of energy use. In terms of bio-ethanol quantity on the price of bio-ethanol scenario in change based on the demand function, when the price increases with the elasticity of bio-ethanol price, relatively substantial decrease of demand quantity, the demand quantity of bio-ethanol increase with substitute goods increase of gasoline price.

Estimation of demand function for natural gas in Iran: Evidences based on smooth transition regression models

This paper attempts to study the demand function of natural gas in Iran using smooth transition regression model (STR). To this end, gross domestic productions (GDP), real price of natural gas and temperature have been employed as variables explaining the natural gas demand from 1971 to 2009. The results indicate that natural gas demand follows an LSTR1 nonlinear two-regime model if the real price of natural gas is considered as the transition variable. Estimation results also indicate that the slope parameter approximately equals the high value of 10 and the threshold value is 31.82Rials111 USD=24,700 Rials (IRR) @ April 2013. per one cubic meter consumption of natural gas. The results strongly suggest that natural gas demand follows the gross domestic production during the last years, but temperature has no significant impact on natural gas demand in Iran.

Testing the Uncertainty of Outcome Hypothesis in European Professional Football

Previous research based on revealed preferences cannot assess whether (increasingly imbalanced) football competitions might be at risk of moving into territory where consumer demand will fall off as suggested by the uncertainty of outcome hypothesis. Therefore, this article provides a subsequent examination of the relationship between perceived balance (in a number of dimensions) and intention to consume based on a stated preference approach in Germany. The estimated demand functions reveal that around 70% of fans care about competitive balance in the German Bundesliga but the league is not close to any tipping point at present.

The dynamics of food, alcohol and cigarette consumption in Russia during transition

This paper presents evidence on the impact of individual as well as regional characteristics on the dynamics of fat, protein, alcohol and cigarette consumption, and on the diversity of the diet in Russia between 1994 and 2005. All those aspects of nutritional behavior are important inputs to the production of health. A dynamic panel data model is used to estimate demand functions for fat, protein, alcohol, cigarettes and diversity of the diet. The results suggest the existence of strong habits in drinking and smoking, and the absence of habits in fat and protein consumption. We also found evidence of habit formation for food diversity. Comparing nutritional behavior of younger and older consumers, we find significant differences in the demand for fat and cigarettes. Older consumers seem to be more persistent in their drinking and smoking behavior. Similarly, men show higher habit persistence for alcohol and cigarette consumption. The results also suggest that among individual determinants, especially education, income and employment have statistically significant impacts on consumption behavior. Regarding the macroeconomic variables, economic growth is negatively related to protein consumption, while regional unemployment rate is negatively affecting the demand for protein and food diversity. Finally, Russian consumers react to the price changes of alcohol, cigarettes, fat and protein as suggested by theory. Consumer demand for food diversity responds negatively to price changes of alcohol and cigarettes, but positively to the price of fat.

『おもいやり』と食料消費

Recently the importance of credence attribute of food is increasing in the process of consumer choice. This kind of credence attribute often affiliate with public goods, for example, environment, animal welfare, suitability, fear trade, support for local famers and so on. A lot of literatures investigated about consumers' preference for affiliated public good attributes. In this paper, we reviewed those empirical literatures and categorized them into 5 groups by the types of attributes discussed in them. Then we estimated demand functions of eco-friendly rice to investigate the effect of consumer's altruism or awareness to public goods. Additionally we tried to estimate payment by consumers for environmental conservation through daily purchase of eco-friendly rice based on their altruism.

Analysis on Growth Prospects of China's Service Industry and Implication for Korea by Estimating Demand Function

Analysis on Growth Prospects of China's Service Industry and Implication for Korea by Estimating Demand Function

A Stated Preference Investigation into the Chinese Demand for Farmed vs. Wild Bear Bile

Farming of animals and plants has recently been considered not merely as a more efficient and plentiful supply of their products but also as a means of protecting wild populations from that trade. Amongst these nascent farming products might be listed bear bile. Bear bile has been exploited by traditional Chinese medicinalists for millennia. Since the 1980s consumers have had the options of: illegal wild gall bladders, bile extracted from caged live bears or the acid synthesised chemically. Despite these alternatives bears continue to be harvested from the wild. In this paper we use stated preference techniques using a random sample of the Chinese population to estimate demand functions for wild bear bile with and without competition from farmed bear bile. We find a willingness to pay considerably more for wild bear bile than farmed. Wild bear bile has low own price elasticity and cross price elasticity with farmed bear bile. The ability of farmed bear bile to reduce demand for wild bear bile is at best limited and, at prevailing prices, may be close to zero or have the opposite effect. The demand functions estimated suggest that the own price elasticity of wild bear bile is lower when competing with farmed bear bile than when it is the only option available. This means that the incumbent product may actually sell more items at a higher price when competing than when alone in the market. This finding may be of broader interest to behavioural economists as we argue that one explanation may be that as product choice increases price has less impact on decision making. For the wildlife farming debate this indicates that at some prices the introduction of farmed competition might increase the demand for the wild product.

Analysis of the demand for counterfeit goods

PurposeThe production, distribution and consumption of counterfeit goods have been increasing at an alarming rate. Current legislation addresses the supply side of the problem, but not the demand side of the problem. The purpose of this paper is to examine, empirically, factors affecting consumer demand for counterfeit goods were analyzed.Design/methodology/approachThe economic theory of consumer demand provided the theoretical framework. Data were collected from students enrolled at a major mid‐western university, and logistic regression was used to estimate demand functions for counterfeit goods.FindingsThe results indicated that student sensitivity to the counterfeit problem did not significantly deter the purchase of counterfeit goods.Research limitations/implicationsEducators in textiles and apparel should have a vested interest in providing education about counterfeiting, resulting in students with greater sensitivity to the issue.Originality/valueThe production, distribution and consumption of counterfeit goods have been increasing at an alarming rate. Current legislation addresses the supply side of the problem, but not the demand side of the problem. Consumer education may be a feasible approach for addressing the demand side of the problem.

Economics of Veterinary Services Delivery among Commercial Poultry Farmers in a Market-Driven Economy: Evidence from Delta State, Nigeria

The economics of veterinary services delivery among commercial poultry farmers was investigated using primary data collected from 60 respondents (50 commercial poultry farmers and 10 veterinary officers) with the aid of structured questionnaire. Data collected were analyzed using a combination of descriptive statistics (i.e. mean, percentage, standard deviation, table) and inferential statistics (i.e. multiple regression model). The results of the study showed that though the veterinary services delivery was structured into public and private sectors majority (60.9%) of the commercial poultry farmers demanded and obtained veterinary services from the public sector. The estimated cost function of commercial poultry farm in the study area revealed that the cost of veterinary services significantly affected the total cost of poultry output (p = 0.01). The estimated demand function for veterinary services indicated that the scale of production and distance to the nearest veterinary office were the significant determinants of the demand for veterinary services in the study area. The finding of the study further revealed that the propensity to supply veterinary services was mainly influenced by demand of poultry farmers (0.8) and effective price that they are willing to pay (0.8). It was recommended among others that private individuals should be encouraged by policy to participate in veterinary services delivery. The issue of veterinary services should be considered important in an y development programme in the poultry industry in Delta State, Nigeria.

Demand of Fulani Pastoralists for veterinary services in North-western Nigeria

The demand of Fulani pastoralists for veterinary services was determined using data collected from 300 respondents in Sokoto and Zamfara States in north-western Nigeria. The interviewed pastoralists were selected using cluster sampling technique and data collected on herders' annual total expenditure on veterinary service, cost of veterinary service per animal herders' total annual expenditure, herd size, herd's distance from veterinary post, number of sick animals and others were analyzed using descriptive statistics and multiple regression analysis. The latter was used to estimate herders' demand functions for veterinary services. The elasticity’s obtained from the estimated demand functions showed that herders' response to veterinary service cost was relatively inelastic, although the small-scale herders responded slightly more than the large-scale herders. The inelastic response to service cost is an indication of willingness to pay by the herders. This was further confirmed by the fact that majority (75%) of them considered that it is proper for them to pay for veterinary services. In fact, 73% of them indicated that they could even pay more than the market value of an animal to save its life. Key words: Demand for veterinary services, Fulani pastoralists, structural reform, demand elasticity

Estimating the inverse demand function for transferring agricultural water in Taiwan

Changing climate has increasingly exacerbated droughts and floods in Taiwan; therefore, it is important to understand the actual demand of transferring Taiwan’s agricultural water. This estimation model could help the water resource agencies to develop appropriate mechanisms for transferring agricultural water, as well as bargaining tools for water-related negotiations. In this study, an inverse demand function estimation model for transferring agricultural water was established, and the water usage statistics derived from the water charge agreements, covering the period from January 1989 to December 2006 and including drought and non-drought periods, regarding the charging of water management fees and water usage fees, was applied to the estimation model in our empirical research. The agreements were made between irrigation associations and water companies, industrial water users, and science and industrial parks, for the purposes of strengthening irrigation management, building usage, and disposal of remaining water. The empirical research was conducted to estimate the demand for transferring agricultural water using double-log regression model for panel data, and analyzed with random effects models for regular conditions and drought periods. The results showed that the inverse demand function developed in this study was able to pass Largrange multiplier test, and adjusted R 2 for the regression were high, fitting the random effects model showing good compatibility with the sample selection. From the results, we can verify the estimation models to forecasting models. The significant results not only prove that the model could provide important market information for the commercialization of water resources, but water resource agencies could also make use of this important information to develop suitable mechanisms for transferring agricultural water, as well as bargaining tools for negotiation of water transactions.

Estimation of the Demand Function in a Declining Industry: The Case of the U.S. Photographic Film Industry

This paper investigates the impact of the digital camera on the demand for photographic film that are now facing the declining demand. Although few studies estimate demand function of declining industry, it is important in an oligopoly market to know how the slope of demand function changes when firms set price. By estimating a static duopoly model with GMM, this study demonstrates that the demand for photo film becomes inelastic by the introduction of the digital camera. This result is consistent with a cream-skimming story that the digital camera takes away more price-sensitive customers.

Cointegration and the demand for gasoline

Since the early 1970s, there has been a worldwide upsurge in the price of energy and in particular of gasoline. Therefore, demand functions for energy and its components like gasoline have received much attention. However, since confidence in the estimated demand functions is important for use in policy and forecasting, following [Amarawickrama, H.A., Hunt, L.C., 2008. Electricity demand for Sri Lanka: A time series analysis. Energy Economics 33, 724–739], this paper estimates the demand for gasoline is estimated with five alternative time series techniques with data from Fiji. Estimates with these alternative techniques are very close, and thus increase our confidence in them. We found that gasoline demand is both price and income inelastic.

The Demand for Import Services at US Container Ports

As global trade increases the interdependence of major world economies, the leading container ports of the United States are growing in importance as gateways from overseas production to domestic consumption markets. With this increased economic importance comes increased dependence of domestic and foreign economies on port practices and procedures, policy actions governing ports, and disasters (natural and otherwise) affecting port operations. Port practices, policy actions and events can affect the time it takes a ship to be serviced at a port, the price of using a port and interject schedule uncertainty at a port. These factors, in turn, affect cargo routers’ choice of port, and the economic benefit (welfare) they receive from their chosen port. In this paper, we estimate a nested logit model, using over 470 000 import shipment routing choices to determine how cost, time and schedule reliability at the top 10 US ports affect cargo routers’ port choices. From the estimated demand function, we calculate demand elasticities for actions and events affecting all ports, as well as each port individually, and ‘willingness to pay’ welfare measures to avoid increases in cost or time and decreases in reliability at top ports.