TY - JOUR. T1 - Computer simulation of large-scale econometric models. T2 - Project link. AU - Petersen, Christian E.. AU - Sims, Christopher A.. PY - 1987/12. Y1 - 1987/12. N2 - Large-scale systems of nonlinear difference equations are well suited for implementations on a parallel vector processor. This report de scribes the fast solution methods encompassed by Project LINK, including implementation on an IBM 3090-200VF supercomputer. LINK comprises 79 macroeconometric models emulating the economies of countries or regions linked through international trade. The model, with more than 20,000 equations, is solved by nesting a Jacobi iteration procedure with a combined Gauss- Seidel and Newton-Raphson procedure. The so lution performance, in terms of elapsed time, can be improved almost proportionally to the number of parallel processors. One can take advantage of vector processing at several stages of the solution algorithm. By exploiting the dynamics of the model, it is possible to gain a factor ...
The paper suggests an econometric methodology for testing the effectiveness of reforms implemented in one major step, i.e., discrete reforms. The methodology is based on the exogeneity properties of variables in an econometric model. The paper specifies the preconditions for setting up an appropriate model; suggests an economic interpretation of the tests for weak, strong, and superexogeneity; and illustrates this methodology by applying it to two cases of instantaneous reforms. The exogeneity properties of variables in a correctly specified econometric model may help uncover information on the preparation, implementation, and the outcome of such reforms, which could be useful for future policy advice.
TY - JOUR. T1 - Estimating the price elasticity of US electricity demand. AU - Smith, V. Kerry. PY - 1980/4. Y1 - 1980/4. N2 - The use of a single electricity price has been seen as a major shortcoming of econometric models of residential electricity demand. It has been suggested that demand estimation should be based on the full rate schedule. This suggestion is evaluated here by examining demand estimates for 27 investor-owned US utilities over the period 1957-1972. The specification errors resulting from using an average revenue price are measured. It is found that statistically valid demand estimated do not necessarily require information on tariff schedules, but that state-wide aggregates of elasticity may often be inapplicable to individual utilities.. AB - The use of a single electricity price has been seen as a major shortcoming of econometric models of residential electricity demand. It has been suggested that demand estimation should be based on the full rate schedule. This suggestion ...
A dynamic econometric model of the hog-pork industry is developed. Specification of major behavioral relationships is initially based on theoretical considerations of the rational behavior of microeconomic units. But the theoretical relationships does not give useful information about the expected behavior in the system. Moreover, most economic time series data are happenstance, thus, a certain amount of experimental modeling with an econometric model is conducted. The model consists of four equations, they are the slaughter number, retail pork supply, retail demand and marketing margin equations. The retail pork supply equation is an identity equation. All other equations combined the preinformation which is generated by time series analysis with the economic model specified on the basis of economic theory. The retail demand and marketing margin equations are a simultaneous system. Both 2SLS and 3SLS estimation methods are used ...
Downloadable (with restrictions)! This study offers a simultaneous equations model of the birth process with seven endogenous variables: four birth inputs (maternal smoking, maternal drinking, first trimester prenatal care, and maternal weight gain) and three birth outputs (gestational age, birth length, and birth weight). The data are taken from the National Longitudinal Survey of Youth. Our analysis conditions on twenty-nine exogenous variables including four racial dummies to account for the widely cited racial differences in birth outputs. We find that there is sizeable correlation between the disturbances in the four input and three output equations and among output disturbances, and that results from our simultaneous equations model are substantially different from those using the single-equation approach. It appears that the High/Low Risk Birth Weight Puzzle remains unresolved under our modeling framework. Copyright Springer-Verlag 2003
The sequences above are mostly self-explanatory, except for the Statistical analysis part. Statistical analysis amounts to the sequence {Specification, Estimation, Respecification} iterated until all of the Statistical models assumptions are satisfied so that the model arrived to is statistically adequate. The final step in Statistical analysis is Identification by which the Theoretical model is related to the estimated Statistical model, and the Econometric model is born.. Once the Econometric model is in place, one may engage in testing some theoretical claims and doing inference. Note that the Estimable model must be embedded in the statistically adequate Statistical model (i.e. the latter must nest the former) to facilitate testing and inference. Spanos stresses that inference is only valid if all of the assumptions of the Statistical model are met, i.e. we have a statistically adequate model; otherwise inference is unreliable.* Question: But what about the infamous pre-test bias and ...
Downloadable! A forecast produced by an econometric model is a weighted aggregate of predetermined variables in the model. In many models the number of predetermined variables used is very large, often exceeding the number of observations. A method is proposed in this paper for testing an econometric model as an aggregator of the information in these predetermined variables relative to a specified subset of them. The test, called the information aggregation (IA) test, tests whether the model makes effective use of the information in the predetermined variables or whether a smaller information set carries as much information. The method can also be used to test one model against another. The method is used to test the Fair model as an information aggregator. The Fair model is also tested against two relatively non theoretical models: a VAR model and an autoregressive components (AC) model. The AC model, which is new in this paper, estimates an autoregressive equation for each component of real GNP,
View Notes - PanelDataProblemSet4 from B 55.9912 at NYU. Department of Economics Econometric Analysis of Panel Data Professor William Greene Phone: 212.998.0876 Office: KMC 7-78 Home
This course, the first of two, focuses on the development and use of single-equation econometric models that enable analysts to better understand their economic/business landscape and to improve their ability to make sound economic/business forecasts. Through hands-on exercises, participants gain knowledge of the practical elements of applied econometric analysis. The overall aims are to sharpen the quantitative, statistical, and analytical skills of participants in dealing with problems and issues related to business and economics as well as to improve communication skills in reporting findings to decision makers.
An important subset of the literature on agglomeration externalities hypothesizes that intrasectoral and intersectoral relations are endogenously determined in models of local and regional economic growth. Remarkably, structural adjustment models describing the spatio-temporal dynamics of population and employment levels or growth traditionally do not include intersectoral economic dynamics. This paper argues and shows that ... read more allowing for economic linkages across sectors in these models adds considerable value, especially in forecasting. An econometric model of population-employment dynamics, in which sectoral variations in economic development are explicitly taken into account, is applied to a large urban planning policy proposal in the Netherlands. The empirical analyses suggest that population dynamics are largely exogenous, population changes drive employment in particular in the industry and retail sectors, and employment in all sectors depends strongly on intersectoral ...
This master thesis attempts to estimate the short-run and long-run price and income elasticities of crude oil demand in ten IEA member-countries for the time period 1980-2009. Specifically, the price and income elasticities for Sweden, Denmark, Spain, Portugal, Turkey, Finland, Italy, Germany, USA, and Japan are estimated. Crude oil consumption is a function of four explanatory variables: real oil prices, real GDP per capita, oil consumption lagged one year and a time trend representing technological improvements. The econometric model that is used is a multiple regression model derived from an adaption of Nerloves partial adjustment model. Empirical results reveal that elasticities (both price and income) are lower in the short-run and hence more inelastic, indicating that countries need time to respond to changes in price or income. Econometric estimations illustrate that oil consumption is highly price inelastic both in short-run and long-run. Income elasticities are more elastic than price ...
Ecosystem services are benefits people derive from resources in ecosystems. Playa lakes in the Southern High Plains region of North America provide several ecosystem services for humans, including recharge to the Ogallala aquifer. The Ogallala aquifer occupies 450,000 km2, it is part of eight states, and provides irrigation water to over 25% of the irrigated land in the United States. The recharge provided by playas potentially makes them important and valuable in this region. We develop an econometric model (with spatial aspects) to determine how playas affect the water level of irrigation wells and estimate the economic value to farmers of playa ecosystem services in recharging the water in those wells. We find that, in some instances, additional playa surface area may have a small but statistically significant effect on well drawdown (and, we infer, on recharge) on nearby wells, but that the value of the additional water is likely too small to significantly affect private management decisions.
GDP Constant Prices in Kenya is expected to be 1119122.37 KES Million by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate GDP Constant Prices in Kenya to stand at 1106270.36 in 12 months time. In the long-term, the Kenya GDP Constant Prices is projected to trend around 1070016.84 KES Million in 2020, according to our econometric models. This page provides - Kenya GDP Constant Prices - actual values, historical data, forecast, chart, statistics, economic calendar and news.
The problems with Chinas regional industrial overcapacity are often influenced by local governments. This study constructs a framework that includes the resource and environmental costs to analyze overcapacity using the non-radial direction distance function and the price method to measure industrial capacity utilization and market segmentation in 29 provinces in China from 2002 to 2014. The empirical analysis of the spatial panel econometric model shows that (1) the industrial capacity utilization in Chinas provinces has a ladder-type distribution with a gradual decrease from east to west and there is a severe overcapacity in the traditional heavy industry areas; (2) local government intervention has serious negative effects on regional industry utilization and factor market segmentation more significantly inhibits the utilization rate of regional industry than commodity market segmentation; (3) economic openness improves the utilization rate of industrial capacity while the internet ...
The sub-discipline of regional economics deals with dissimilar economic performances across space. In trying to understand this, several theoretical perspectives may be drawn upon, and used to justify policies. Both theory and policy are covered in this module, which is split between formal lectures and seminars in which students discuss essays submitted as coursework. Lectures cover a general introduction to the regional policy problem and the calculation of regional GDP; regional economic theory, including econometric models and regional input-output analysis; a brief review of regional policy in Britain, Europe, the USA, and also low income countries. The module concludes by examining new perspectives in regional economics ...
Government Budget Value in Bangladesh is expected to be -100000.00 BDT Billion by the end of this quarter, according to Trading Economics global macro models and analysts expectations. In the long-term, the Bangladesh Government Budget Value is projected to trend around -140000.00 BDT Billion in 2020, according to our econometric models.
In addition to quantitative assessment of economic growth using econometric models, business cycle analyses have been proved to be helpful to practitioners in order to assess current economic conditions or to anticipate upcoming fluctuations. In this paper, we focus on the acceleration cycle in the euro area, namely the peaks and troughs of the growth rate which delimitate the slowdown and acceleration phases of the economy. Our aim is twofold: First, we put forward a reference turning point chronology of this cycle on a monthly basis, based on gross domestic product and industrial production index. We consider both euro area aggregate level and country specific cycles for the six main countries of the zone. Second, we come up with a new turning point indicator, based on business surveys carefully watched by central banks and short-term analysts, in order to follow in real-time the fluctuations of the acceleration cycle.. ...
By David Shern, Ph.D. and Andrea Blanch, Ph.D.. Whenever doing the right thing and doing the smart thing coincide, it increases the chances that something will happen. Elsewhere, we have presented data demonstrating that investments in prevention, especially in early childhood, have lifelong positive impact. They also save money. Econometric models by the Washington State Institute of Public Policy estimate that these prevention programs save many more dollars than they cost. They are smart public investments as well as the right thing to do.. ...
Alessi, L., M. Barigozzi, and M. Capasso: 2011, Nonfundamentalness in Structural Econometric Models: A Review. International Statistical Review (forthcoming).. Breidt, F. J., R. A. Davis, K.-S. Lh, and M. Rosenblatt: 1991, Maximum likelihood estimation for noncausal autoregressive processes. Journal of Multivariate Analysis 36(2), 175-98. Brock,W. A. and C. H. Hommes: 1998, Heterogeneous beliefs and routes to chaos in a simple asset pricing model. Journal of Economic Dynamics and Control 22(8-9), 1235-1274.. Campbell, J. Y. and R. J. Shiller: 1987, Cointegration and Tests of Present Value Models. Journal of Political Economy 95(5), 1062-88.. Campbell, J. Y. and R. J. Shiller: 1988, The Dividend-Price Ratio and Expectations of Future Dividends and Discount Factors. Review of Financial Studies 1(3), 195-228.. Hansen, L. P. and T. J. Sargent: 1991, Two Difficulties in Interpreting Vector Autoregressions. In: L. P. Hansen and T. J. Sargent (eds.): Rational Expectations Econometrics. ...
Lee A. Lillard, director of the Retirement Research Center at the University of Michigan, senior research scientist at its Institute for Social Research, and professor of economics, developed a unique method for analyzing the rich compendium of data collected by the Panel Study of Income Dynamics (PSID) since its inception in 1968. Lee died in December 2000, and his colleagues at PSID decided to provide the fruits of his work to the research community so others might benefit from an exploration of his techniques and methodologies for analyzing data. Lee created what he called clean processes to investigate a number of dynamic behaviors that are measured longitudinally in PSID, such as employment, marriage-divorce, and fertility. He and his programmers and research assistants put these processes into a consistent framework, and made decisions about how to resolve inconsistencies, missing items, etc. Data from the files can be entered, as appropriate, in dynamic econometric models of related and ...
The explanation of aggregate and sectoral investment behavior has been one of the less successful endeavors in empirical economics. Existing econometric models have had little success in explaining or predicting investment spending. This may be because most such models fail to account for the irreversibility of most investment spending. With irreversibility, changes in the riskiness of future cash flows or interest rates should in theory dramatically affect the decision to invest - more so than, say, a change in the levels of interest rates. Here I survey some of the empirical support for this proposition, and discuss the implications for investment modelling ...
But those figures too are misleading, because they refer to the cumulative GDP gain from TPP by 2030. Its not clear when the World Bank econometric model assumes TPP will come into effect, but by 2030 its clearly been running for at least ten years, and maybe even 12. That means all of the figures above need to be divided by at least a factor of 10 in order to arrive at the annual boost to growth, which provides a better measure of TPPs impact than the overall figure. So according to the World Banks figures, the US will gain an extra 0.04% GDP per year on average, as a result of TPP; Australia an extra 0.07% annually, and Canada a boost of 0.12% per year. In other words, they differ from the USDAs earlier projection of no measurable impacts on real GDP by amounts that are so small they will be swamped by the general imprecision of the model -- trying to predict what will happen to a big chunk of the global economy out in 2030 is hard, and thats putting it mildly. The fact that two ...
Description: This study compiles and updates the findings of 16 comprehensive state climate action plans and extrapolates the results to the nation. The study then takes those results and using a widely accepted econometric model projects the national impact of these policies on employment, incomes, gross domestic product (GDP) and consumer energy prices. Finally, using the bottom-up data developed by the states and aggregated here, the study models the national impact of major features of the Kerry-Lieberman climate bill under consideration in Congress in 2010. These state action plans and supporting assessments were proposed by over 1,500 stakeholders and technical work group experts appointed by 16 governors and state legislatures to address climate, energy and economic needs through comprehensive, fact-based, consensus-driven, climate action planning processes conducted over the past five years with facilitative and technical assistance by the Center for Climate Strategies. Findings show ...
In this paper we estimate the impacts of climate change on the allocation of time using econometric models that exploit plausibly exogenous variation in daily temperature over time within counties. We find large reductions in U.S. labor supply in industries with high exposure to climate and similarly large decreases in time allocated to outdoor leisure. We also find suggestive evidence of short-run adaptation through temporal substitutions and acclimatization. Given the industrial composition of the US, the net impacts on total employment are likely to be small, but significant changes in leisure time as well as large scale redistributions of income may be consequential. In developing countries, where the industrial base is more typically concentrated in climate-exposed industries and baseline temperatures are already warmer, employment impacts may be considerably larger. ...
The research specialist builds and manages data sets, tests econometric models, conducts complex data analysis, writes and edits research documentation, discovers new data sources, cleans and prepares data for faculty use, and performs other assigned duties. The research specialist will provide general assistance to the Institute, as well as to Law School faculty and post-doctoral scholars. Attendance at various Law School events, including conferences, workshops and the Summer Institute for Law and Economics is required ...
Author: International Monetary Fund. Research Dept. Series: IMF Staff Papers, Volume 52, No. 2 Date: August 29, 2005 Notes: Issues from 1998 onward are available for free online Subject: Balance of trade Bank capital Capitalization Central banks Current account Devaluation of currency Developing countries Econometric models Economic growth Financial crises Fiscal policy Fiscal transparency Inflation Inflation targeting International reserves Monetary policy Open economies Recessions Regression analysis ...
First, do it yourself. You can do this. You know your business better than anybody. I have an MBA and I can do weighted averages, smoothing, and econometric models; but I dont. I was a vice president in a market research firm and I saw that the best forecast was not the technical or mathematical models, but the common sense and judgment of the business owners.. Second, look for the drivers. For example, in a business that sells over the Internet, drivers are likely to include web traffic, meaning people looking at the website. That is likely to include browsers who got there by organic search, by clicking ads on the web, or by clicking links in social media, or some other way. Aside from traffic, theres also conversion rate, as in how many of the people browsing on the website purchase something. As another example, in a business selling physical goods in stores, there are the numbers of stores stocked, the sales per store per month, and returns. And yet another example, for the all-important ...
The present work intends to analyse the relation between the property structure as a corporate government variable and the levels of corruption. Empirical analysis will be held by two econometric models and the database comes from a questionnaire done by the World Bank to 606 enterprises, for the year 2005. Previous empirical evidence is limited and it has been a matter to consider to carry out the research. The results obtained show that a higher number of majority shareholders in the property, leads to higher levels of corruption. There is a significant percentage of the sales contracts for bribery. Also, the frequency in which payments for own benefits are carried out is reduced, revealing an inverse relation between corruption and percentage of majority shareholders. Also, negotiation with state agencies contribute to corruption. Finance and [-] ...
One in three pre-school children in the developing world is undernourished. As a consequence, their human rights are violated. In addition, they are more likely to have impaired immune systems, poorer cognitive development, lower productivity as adults, and greater susceptibility to diet-related chronic diseases such as hypertension and coronary heart disease later in life. Undernourished female preschoolers are likely to grow into undernourished young women who are more likely to give birth to babies who are undernourished even before they are born, thus perpetuating the inter-generational transmission of deprivation. Reducing these unacceptably high numbers remains a tremendous challenge to public policy. As a guide to the direction of future efforts, this research report examines the success of the efforts of the past 25 years to reduce preschooler undernutrition. The report uses an econometric model to identify the factors associated with the reduction in undernutrition. The formulation of ...
There is broad consensus among the six available components: Five predict a win for Clinton and one speculates that Trump will win. According to the econometric model Trump is currently ahead by 51.9%. A look at the component methods predicting a win for Clinton shows that expert surveys, with a predicted vote share of 53.2%, are the closest to PollyVotes prognosis. The prediction markets present the largest difference from PollyVotes prognosis and predict Clinton to have 56.1% of the vote. This article was automatically generated by the PollyBot, which uses algorithms developed by AX Semantics to generate text from data stored in our API. The exact dataset underlying this particular article can be found here. ...
It was this week that I argued extensively with professors and fellow students against the tendency to minimize the unknown (say in econometric models) in order for the models & predictions to work. Yesterday evening, after I arrived home, I picked up the copy of NNTs The Black Swan and this paragraph was right there:…
This book provides an impressive introduction to state-of-the-art methods for solving real-world problems in econometrics, including instructive examples and applied problems.
This study introduces students to applied econometrics, including basic techniques in regression analysis. Key topics in this text include self-contained summaries of the matrix algebra, statistical theory and mathematical statistics used in the book. The book covers Estimator, ML, GMM, and 2 step; panel data, heteroscedasticity, qualitative responsive models, and limited dependant variables. It emphasizes nonlinear models. Topics such as GMM estimation methods, Lagrange multiplier tests and time series analysis are also covered.
This article analyses determinants for 2001 farmland rental prices from 3,819 farms in Germany. Based on specification tests we estimate a general spatial model to account for both spatial relationships among rental prices of neighbouring farmers and spatially autocorrelated error terms. A €1 per hectare higher rental price in a farmers neighbourhood coincides with a €0.72 higher rental price paid by the farmer. The marginal incidence of EU per-hectare payments paid for eligible arable crop land on rental rates amounts to €0.38 for each additional €1 of premium payments. Regional livestock density, which is indirectly influenced by different policies, is also a major determinant of rental prices. Results are confirmed by sensitivity analyses. Consequently, German farmland rental rates are heavily influenced by agricultural policy instruments and therefore, these policies exhibit substantial distributional effects. ...
Combining machine learning with econometric analysis is becoming increasingly prevalent in both research and practice. A common empirical strategy involves the application of predictive modeling techniques to mine variables of interest from available data, followed by the inclusion of those variables into an econometric framework, with the objective of estimating causal effects. Recent work highlights that, because the predictions from machine learning models are inevitably imperfect, econometric analyses based on the predicted variables are likely to suffer from bias due to measurement error. We propose a novel approach to mitigate these biases, leveraging the ensemble learning technique known as the random forest. We propose employing random forest not just for prediction, but also for generating instrumental variables to address the measurement error embedded in the prediction. The random forest algorithm performs best when comprised of a set of trees that are individually accurate in their ...
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This thesis consists of three essays that address open research issues in two econometric frameworks: nonparametric quantile regression framework and social networks, supported by empirical applications. Both econometric approaches are used to achieve a deeper understanding of the economic processes and interactions in comparison to the simple mean regression ...
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You learn something new at every Nuremberg Toastmasters meeting. Speaking on the 6th August Gernot talk us through the concept of Price Elasticity of Demand. Below is a short summary of Price Elasticity written by Gernot. Price Elasticity - Many companies want to maximize their revenues. Once it comes to the price policy they have Read more about Speech : Price Elasticity[…]. ...
Short words are better than long words. 1 Introduction. This is a first course in. Behavioral Economics and Public Policy: A Pragmatic Perspective Raj Chetty Harvard University and NBER January 2015 Abstract The debate about behavioral economics { the incorporation of insights from psychology into eco-nomics { is often framed as a question about the foundational assumptions of economic models. In practice n 2 are the nonsignificance limits for both functions. Models of undergraduate research programmes range from individual to institution-wide efforts. THE PRIZE IN ECONOMIC SCIENCES 2018. 2 History of Thought 2. ; explains the estimation of single-equation models. ABADIR†‡ AND JAN R. MacAvoy) , American Enterprise Institute, Washington, DC, 1975. Why study wage determination? Outcome of a labor-market process Distribution of product and surplus Rents (both for themselves and as an indicator of market power) 2. Princeton Economic Confidence Model - Private 51. 1 Ordered Response Models 203 7. ...
Using panel data from a period of water rate reform, this paper estimates the price elasticity of irrigation water demand. Price elasticity is decomposed into the direct effect of water management and the indirect effect of water price on choice of output and irrigation technology. The model is estimated using an instrumental variables strategy to account for the endogeneity of technology and output choices in the water demand equation. Estimation results indicate that the price elasticity of ...
In contrast to traditional methods the elasticity is derived from bilateral price elasticities which relate the net share of switchers between two health insurers not only to their premium difference but also to the market share and premium of the higher priced health insurer. Our new method explains the annual variation in the Dutch market share data better than the traditional methods.. We find in the Dutch social health insurance for the period 1996-2005 rather low negative annual price elasticities ranging between 1 and 0. In that period stickiness of insurer choices was high and less than 5% of the population switched annually from health insurer. This result, however, was in sharp contrast with an exceptional high price elasticity of 7 for the year 2006, where after a major health care reform about 18% of the population switched mostly to lower priced health insurers. Besides large media coverage, one important difference with previous years was that many consumers holding an individual ...
The higher the price elasticity of demand, the lower the sensitivity of market price to shifts of the supply curve. Thus, for necessity goods (such as staple foods and, in the case of petroleum-dependent societies, petroleum products), which have a low price elasticity of demand, the market price is much more sensitive to shifts in supply. In particular, a small supply shock can cause a significant increase in price. The main explanation for this massive shift is that, because of the relative inelasticity of demand to price, the price needs to be increased significantly to induce people to cut down on demand in order to compensate for the reduction in supply. In contrast, for non-essential goods, which generally have a high price elasticity of demand, supply shifts do not generally lead to significant price changes, because small (fractional) changes in price are sufficient to induce buyers to cut back on demand. ...
A definition and the formula Again, the key word is responsiveness, but this time we need to find out how responsive supply is to a given price change (rather than demand). Unsurprisingly, the formula used is very similar to the others in structure: /**/ Where: Es = The price elasticity of supply Δ = change in Qs = Quantity supplied P = Price Using the formula I do not want to dwell on this for two reasons. First, there are far fewer questions in examinations focused on the price elasticity of supply. Examiners prefer demand, where one can analyse the affects on the revenues on the firm in question (see the Learn-It on the Price elasticity of demand). Secondly, the way in which one uses this formula is exactly the same as the way in which one uses the formula for the price elasticity of demand. Try the following examples to check that you agree with me. Click on the appropriate button to reveal the answers. /**/The market price for apples rises from 50p per lb to
Supply Demand and Price Elasticity essay writing service, custom Supply Demand and Price Elasticity papers, term papers, free Supply Demand and Price Elasticity samples, research papers, help
26. The most important determinant of price elasticity of supply is (Points: 1) price elasticity of demand technological - Answered by a verified Tutor
Elasticity of demand is mainly useful in Pricing Decisions by Business Firms. The business firms take into account the price elasticity of demand when they take decisions regarding pricing of the goods. This is because change in the price of a product will bring about a change in the quantity demanded depending upon the coefficient of price elasticity. This change in quantity demanded as a result of, say a rise in price by a firm, will affect the total consumers expenditure and will therefore, and affect the revenue of the firm. If the demand for a product of the firm happens to be elastic, then any attempt on the part of the firm to raise the price of its product will bring about a fall in its total revenue. Thus, instead of gaining from the increase in price, it will lose if the demand for its product happens to be elastic. On the other hand, if the demand for the product of a firm happens to be inelastic, then the increase in price by it will raise total revenue. Therefore, for fixing a ...
How Do Prices of Manufactured Cigarettes and Roll-Your-Own Tobacco Affect Demand for these Products? (Regional Study 1; 2020). In this research, price elasticities of two tobacco products MC and RYO are analysed by examining cross-country variation in prices and tobacco consumption and controlling for other relevant characteristics. Therefore, estimated elasticities are cross-country and more specifically, across s-regions within the countries studied. These elasticities indicate if differences in smoking prevalence and/or intensity depend on the differences in prices of MC and RYO.. Tobacco Price Elasticity un Southestern Europe - download here.. ...
What We Did: We used manufacturing analytics to develop a pricing analysis framework to identify the impact of change in price of a product on its demand to improve promotion effectiveness for a leading food manufacturer.. The Impact We Made: With the pricing analysis framework, the client was able to design multiple trade promotions for retailers, which led to 8% increment in sales volume.. Summary - Price elasticity of demand model. Being a food manufacturer, it is imperative for the client to optimally price their products within or outside promotions to sustain demand. The client used to purchase pricing analysis from a third party vendor. This was proving to be an expensive affair and the client saw a need to have an in-house team to be able to do it accurately and in a scalable fashion. Mu sigma team enabled the client with the price elasticity exercise at brand / consumer segment level to achieve the required outcome.. About The Client - Large CPG company. The client is a leading food ...
Its no secret that there has been a shift in shopping behavior due to growth in millennial spending power, aging of baby boomers and the growth of online shopping. These changes are impacting pricing and demand, and are creating a disconnect for retailers and brands between what theyre charging and how much consumers will actually spend. First Insight recently released a study, Decoding Price Elasticity to Unlock Revenue and Minimize Risk, which examines how retailers can best price a category to meet demand while protecting margins and avoiding excess inventory.. Source: Total Retail Read Full Story: Price Elasticity. ...
One method that Toyota can consider is using the price elasticity of demand to determine whether to increase or decrease the sale price of their automobiles. The responsiveness or sensitivity of consumers to a price change is measured by a products price elasticity of demand (McConnell & Brue, ).
Interesting article on price elasticity when firms sell to other firms. If changes in prices do not affect demand, then price elasticity is not helpful in setting the profit maximizing price ...
Types of Price Elasticity of Demand Price elasticity of demand is a term in economics often used when discussing price sensitivity. In other words, the pri
price elasticity of demand of whiskeythe price elasticity of demand for imported whiskey is estimated to be -0.20 over, Hire Business Economics Expert, Ask Economics Expert, Assignment Help, Homework Help, Textbooks Solutions
MaximRMS has greatly enhanced the price elasticity capabilities within the MVE(TM).. Dynamic Price Elasticity capabilities identify and focus on true competitors for each situation and take advantage of competitor rate changes and variations in demand.. Leveraging rate shop data, the totels own customer response to changes in rates by your hotel or your competitors, and competitive forward demand data, MaximRMS determines both. ...
This experiment demonstrates how to build a basic price elasticity model. Tags: retail, pricing, price optimization, price elasticity, regression
Working with the Mexican division of a major global consumer package goods company, a study was conducted to better understand the ROI on marketing spending, coupled with a price elasticity study in a product category where the firm had several leading brands. Besides helping shift consumer and trade spending to brands and programs that delivered a significantly better ROI, the price elasticity study was quickly utilized when there was a major increase in commodity costs. Using the data and incorporating it into a proprietary model, the company revised their previously devised pricing plans resulting in a 20 improvement in profitability versus the annual plan.. ...
Calculate price elasticity of demand responsiveness with our comprehensive price elasticity of demand calculator and calculation guide.
Concept of Price Elasticity of Demand The price elasticity of demand measures the degree of responsiveness of quantity demanded for a certain commodity to
Price elasticity of demand Marija managed to explain perfectly what is the price elasticity and what are the factors that affect it: availability of
Carbon emissions from products contribute to anthropogenic climate change. Because of the growing concern over the environmental impact of production and consumption of consumer goods, carbon footprint information started to appear on labels of several products. In this paper we use both parametric and non-parametric econometric models in order to estimate Egyptian consumers willingness to pay (WTP) for carbon-labeled products. Contingent valuation methods based on log-logistic, log-normal and Weibull regression models revealed that consumers in Egypt are willing to pay a price premium of approximately 75 Egyptian pounds (EP) for carbon-labeled products based on the single-bound dichotomous choice (SBDC) model and up to 90 EP based on the double-bound dichotomous choice (DBDC) model. From a socio-economic perspective, results have also revealed that income, age, gender, and educational level have a significant influence on the respondents WTP. Implications of this study highlight the fact that ...
Seminal papers of Solow (1957) and Swan (1956) stimulated debate among economists on the role of technical change in productivity improvements and for that matter economic growth. The consensus is that technological change accounts for a significant proportion of gross national product (GNP) growth in industrialised economies. In the case of Australia, the aggregate productivity performance was poor in the 1970s and 1980s, but picked up very strongly by the 1990s, and was above the OECD average growth level for the first time in its productivity growth history. However, this high productivity growth rate could not be sustained and Australia started to experience a slowdown in productivity growth since 2000. This study empirically measures the performance of productivity in Australias economy for the period 1950-2005, using an econometric approach. Time-series data are used to develop econometric models that capture the dynamic interactions between GDP, fixed capital, labour units, human ...
These essays examine econometric models of health behavior. The first essay evaluates the Kids N Fitness program, an intervention to reduce childhood overweight and obesity. The second essay uses a Childrens Hospital of Los Angeles private dataset to examine determinants of diabetic glycemic control transitions. The third essay analyzes drinking behavior and the response to spousal death among the elderly, utilizing the Health and Retirement Study panel dataset. In each case, I analyze the health behavior choice controlling for available individual characteristics including economic variables. The models apply rigorous econometric techniques and are explicit about the underlying assumptions.; I find that the Kids N Fitness program is effective at helping overweight children reduce their BMI Z Score. In addition, the analysis points towards the conclusion that more highly trained instructors do not yield improved program efficacy. I find that being a teenager negatively impacts the probability ...
Anderson, G. J., and Mizon, G. E. (1983). `Parameter Constancy Tests: Old and New, Discussion Paper 8325, Economics Department, University of Southampton.. Andreou, E., and Ghysels, E. (2002). `Detecting Multiple Breaks in Financial Market Volatility Dynamics, Journal of Applied Econometrics, 17: 579-600.. Andrews, D. W. K. (1993). `Tests for Parameter Instability and Structural Change with Unknown Change Point, Econometrica, 61: 821-856.. Andrews, D. W. K. (2003). `End-of-Sample Instability Tests, Econometrica, 71: 1661-1694.. Andrews, D. W. K., and Fair, R. C. (1988). `Inference in Nonlinear Econometric Models with Structural Change, The Review of Economic Studies, 55: 615-639.. Bai, J. (1994). `Least Squares Estimation of a Shift in Linear Processes, Journal of Time Series Analysis, 15: 453-472.. Bai, J. (1995). `Least Absolute Deviation Estimation of a Shift, Econometric Theory, 11: 403-436.. Bai, J. (1997). `Estimation of a Change Point in Multiple Regression Models, Review of ...
Prior to 1985, ten states adopted some kind of indexing provisions for their personal income tax systems. Seven of these states subsequently suspended their indexing laws for one or more years. In this paper we examine the states experience with income tax indexing and see what lessons can be drawn from it. We describe the indexing statutes, and estimate simple econometric models of both the decisions to adopt indexing and to renege on a promise to index. ...
An econometric model of civil war is applied to the analysis of conflict in sub-Saharan Africa. Results show that Africa has had a similar incidence of civil conflict to other developing regions, and, with minor exceptions, its conflicts are consistent with the global pattern of behavior. However,
Tax and Transfer Policy Institute (March 2017). This paper uses detailed information about household supermarket purchases from the Australian Nielsen Homescan Survey to estimate price elasticities of demand for a range of food categories. An instrumental variable strategy is employed to address endogeneity issues. The estimates obtained from our analysis are used to study five scenarios in which the rate of the GST on food categories is increased or in which the tax base is broadened to include currently GST-free categories. Our findings reveal that there is considerable scope for raising revenue by increasing the rate and broadening the tax base. Low-income households (the bottom 40% of the income distribution) can be compensated for the loss in consumption induced by a tax increase. We demonstrate that increasing the rate of the GST from 10% to 15% and broadening the tax base would increase tax revenues by up to $8.6 billion, whereas compensating low-income households would require up to $2.2 ...
In addition, there is mounting anecdotal evidence from country studies that access to telecommunications in rural areas enhances development. The economic benefits of rural ICT access are primarily due to access to information, markets, and increased business opportunities.[3]. Africas ICT situation is by and large poor by international standards. Most Africans do not yet have access to the basic ICT services needed to make or receive a simple telephone call, while the rest of the world is dominated by advanced digital telecommunication systems and the Internet.. Although almost all Sub-Saharan countries are poor by international standards, they exhibit great disparities in coverage by cell telephone systems. Statistics on country-level percentages of urban and rural populations within range of cell phone towers in March, 2004 revealed variation in coverage from 0 to 100%. Rural coverage was negligible or nonexistent in 17 countries [4], but above 47% in the top quartile; urban coverage was ...
Background Food taxes and subsidies are one intervention to address poor diets. Price elasticity (PE) matrices are commonly used to model the change in food purchasing. Usually a PE matrix is generated in one setting then applied to another setting with differing starting consumption and prices of foods. This violates econometric assumptions resulting in likely misestimation of total food consumption. We illustrate rescaling all consumption after applying a PE matrix using a total food expenditure elasticity (TFEe, the expenditure elasticity for all food combined given the policy induced change in the total price of food). We use case studies of NZ$2 per 100g saturated fat (SAFA) tax, NZ$0.4 per 100g sugar tax, and a 20% fruit and vegetable (F&V) subsidy. Methods We estimated changes in food purchasing using a NZ PE matrix applied conventionally, then with TFEe adjustment. Impacts were quantified for total food expenditure and health adjusted life years (HALYs) for the total NZ population alive ...
In practice, water pricing is the main economic instrument used to discourage the wasteful use of residential water. Owing to considerations of affordability, residential water is systematically underpriced because water is essential for life. Such a low price results in water being used inefficiently. This paper proposes a system that supplements the existing price system with a cap-and-trade measure to reconcile conflicts among the goals of residential water use. It forces all people (independent of income) to be faced with reasonable price signals and to use water efficiently. The poor could, however, gain from trade and afford water. By taking advantage of the agent-based model, a simulation of this system applied to Taipei, Taiwan shows that those with lower income per capita are better off under this system even though the equilibrium price of residential water is higher. The simulated average price elasticity of market demand is −0.449 ...
One underexplored factor directly affecting firms use of trademarks relates to the fees associated with obtaining a mark. This paper provides econometric estimates of the fee elasticity of demand for trademark applications. Using a panel of monthly international trademark applications, I find that a 10-percent increase in fees leads to a 2.5-4.0-percent decrease in applications. The econometric analysis also highlights that trademark filings react strongly to economic activity. The results bear implications for literature on the value of trademarks and for the use of trademarks as innovation indicator. Specifically, low elasticity estimates suggest that trademarks provide significant economic value to their owners relative to their costs. However, one must exercise caution when comparing trademark numbers across countries to the extent that fees might differ substantially. de Rassenfosse, Gaetan
PriceElasticity and Taxation Essay. Priceelasticity of demand indicates the connection between the cost ofgoods and the amount demanded by consumers. In other words, itmeasures the response after the price of a product change. Aproduct`s consumption is believed to be price elastic when analteration in the cost of a product or service results in a biggerpercentage variation in demand. Also, the demand is described asprice inelastic when a variation in price results to a smallerpercentage alteration in demand. Although the tax burden depends onthe price elasticity of demand and supply rather than on the sourceof revenue, the burden of tax can fall more on producers or consumersdepending on the circumstance. This paper seeks to compare therelatively inelastic demand with the inelastic demand as it describesthe difference between the collected government tax revenues and theeconomic burden of the tax. Thesource of government revenue is taxes. Nonetheless, taxes reduce bothdemand and supply in the ...
In economics, price elasticity of demand refers to the degree to which demand for a particular good or service changes as a result of changes in price. If a product is highly elastic, a large increase in price should result in a large drop in demand as consumers decide not to buy the newly expensive product. If a product is inelastic, however, a change in price will have no effect on demand for the product.. ...
6. Proportion of Expenditure Items that constitute a smaller amount of expenditure in a consumers family budget tend to have a relatively inelastic demand, e.g., a cinegoer who sees a film once a month is not likely to give it up when the ticket rates are raised. But one who sees a film once every week perhaps may cut down the number of films seen per week. Similarly, a family which enjoys eating out twice a week, may reduce their rejoicing if the rates go up. But may not hold true in case of a family which does the same only on somebodys birthday in the house. Cheap or small expenditure items like matches, sugar, kerosene candles, broomstick tend to have more demand in elasticity than expensive or large expenditure items.. This is second part of factor influencing price elasticity of demand and wanna read first part then click here.. 7. Durability of the Commodity In the case of durable goods, the demand generally tends to be elastic e.g. furniture, motor cycles, T.V. sets etc. In the case of ...
This was the topic of a post here in 2014, which got 1 (one) comment.. Price elasticity means how much demand will be reduced if price goes up.. Thats an important point now. Some people think that Bitcoin fees need to be low or zero, or users will switch to something else, and Bitcoin will be doomed.. The question if that is right depends on the question if and how much demand is elastic.. Right now empiric data doesnt point to high elasticity. Fees are way up, but there are still enough users to keep block size fluctuating around 850k.. My best estimate for average transaction size is somewhat more than $1,000. Bitcoin is moving around $300 million a day, with around 260,000 transactions.. For an $1,000 transaction, obviously saving a couple of dimes in fees is not a strong consideration. So it makes sense to expect low elasticity at the present level (average fee of less than $1).. So the answer would be: Yes, some users will be priced out of Bitcoin without larger blocks. But right now, ...