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Economic experiments have been widely used to elicit individuals' evaluation for various commodities. Common elicitation methods include auction and posted price mechanisms. A field experiment is designed to compare willingness-to-pay (WTP) estimates between these two mechanisms. Despite both of these formats being theoretically incentive compatible and demand revealing, results from 115 adult consumers indicate that WTP estimates obtained from an auction are 32–39 percent smaller than those from a posted price mechanism. A comparison in statistical significance shows that auctions require a smaller sample size than posted price mechanisms in order to detect the same preference change. Nevertheless, the signs of marginal effects for different product characteristics are consistent in both mechanisms.
Since 2017, the Japanese government has been phasing out the use of non-native bumblebees as greenhouse tomato pollinators due to their ecological risks. We used an online questionnaire to investigate whether pollination methods affect consumers’ willingness to pay (WTP) for tomatoes. We found that consumers valued the use of non-native bumblebees more than hormonal treatment and native more than non-native bees. Moreover, we found that informing consumers of the ecological risks increased WTP for native bumblebees and hormonal treatment. These results suggest that pollination method labeling may help protect ecosystems from the threat of non-native species.
Equity and efficiency are crucial issues behind any tax reform, but they are particularly relevant in countries with high inequality and large shares of poverty. This paper provides a comprehensive socio-economic empirical assessment of Mexico's proposed (and partially implemented) tax reforms in the energy domain, and of a hypothetical partial removal of existing electricity subsidies. Using a rich household income and expenditure survey within the context of a demand system adjustment of non-durable goods, the article provides the public-revenue, environmental and distributional impacts from the simulation of different combinations of energy taxation, subsidy-removal and distributive offsets. The paper also provides detailed ex-ante evidence on the effects of compensatory devices that may contribute to the successful implementation of energy reform packages and significant poverty alleviation in Mexico.
Immigration has changed the United States from having a predominantly white to a more ethnically diverse population. People who move to the U.S. may initially have diets unlike native-born Americans but gradually adopt eating patterns more like them. Using NHANES data and a censored gamma regression model, this study estimated the daily consumption of major food products among groups of immigrants and the corresponding groups born in the U.S. Results show that immigrants had lower consumption of meat and higher consumption of fruits and vegetables, and immigrants’ consumption converged towards a less healthy American diet after five years in the U.S.
Retail sales of fluid cow’s milk are decreasing while those of plant-based milk analogues are increasing. In this study, we model the relationship between households’ purchases of both types of products and perform simulations. Results show that growing consumer demand for plant-based products is causing cow’s milk sales to decline somewhat faster than otherwise. However, plant-based products are not a primary driver of sales trends for cow’s milk. The decline in cow’s milk sales is substantially greater than the rise in sales of plant-based analogues.
State marketing programs for food and agricultural products are largely driven by consumers’ desires to purchase in-state products. Evaluations of state marketing programs have largely ignored consumer location and proximity to surrounding states, measures of ethnocentrism, and the presence of other geographic marketing labels. This study examines willingness to pay for own and out-of-state labels for a generic commodity, milk, within an eight-state region. The results show that an aggregate model conceals consumer heterogeneity in marginal willingness to pay values for state brands as compared to a disaggregate model, even when using random parameter logit models.
We investigate food preference changes in Russia that may have resulted from political, economic, and other changes. Our empirical framework utilizes advances in consumer theory and exploits provincial-level panel data on food consumption and supply shifters to identify price and income effects. Our findings indicate that consumers underwent a structural preference change that began in 2007 and continued into 2014. To illustrate the magnitude of this change, we contrast economic effects for select food commodities across regions. The new insights will be useful in designing timely and effective food and trade policies, as well as informing strategy decisions of agribusiness industry players.
We examine the net benefits of social distancing to slow the spread of COVID-19 in USA. Social distancing saves lives but imposes large costs on society due to reduced economic activity. We use epidemiological and economic forecasting to perform a rapid benefit–cost analysis of controlling the COVID-19 outbreak. Assuming that social distancing measures can substantially reduce contacts among individuals, we find net benefits of about $5.2 trillion in our benchmark case. We examine the magnitude of the critical parameters that might imply negative net benefits, including the value of statistical life and the discount rate. A key unknown factor is the speed of economic recovery with and without social distancing measures in place. A series of robustness checks also highlight the key role of the value of mortality risk reductions and discounting in the analysis and point to a need for effective economic stimulus when the outbreak has passed.
As countries develop, they are likely to face challenges in meeting growing energy demand and in ensuring energy security. Given this, and the problem of climate change, improving demand-side energy efficiency is pivotal to ensuring sustainable development. However, agents often underinvest in energy-efficient technologies due to behavioral failures such as low levels of energy-related financial literacy, defined as the combination of energy knowledge and cognitive abilities needed to evaluate the lifetime costs of durables. Using novel data, we analyze the levels and determinants of energy-related financial literacy of households in urban areas in the eastern lowlands of Nepal, and whether it is correlated with their attitudes towards replacement of energy-inefficient appliances. We find that respondents have low levels of energy-related financial literacy, and higher levels of literacy are associated with more rational attitudes towards appliance replacement. The findings of this study are relevant to addressing the energy-efficiency gap in developing countries.
This research seeks to determine effects of rising interest in gluten-free foods on U.S. retail food demand and, ultimately, producer and consumer welfare. Increased gluten-free interest led to a modest reduction in cereals and bakery demand and increases in meat, alcoholic beverages, and food away from home demand. Combining estimated effects with an equilibrium displacement model suggests the reduction in cereal and bakery demand decreases wheat and barley producer profits by US$7.2 million/year. After accounting for positive demand impacts on other products, results indicate wheat and barley supply is redistributed away from food production into animal production, increasing wheat producer welfare.
Consumers in the United States fall short of meeting the recommended guideline for dietary fiber intake. Using a quarterly panel of households from Nielsen for the years 2004 through 2014, we employ a Heckman two-step approach to estimate nine panel regressions concerning per person fiber intakes derived from various food categories to uncover the importance of prices as well as socioeconomic and demographic factors. Prices play a prominent role in the per person intake of dietary fiber derived from the respective food products considered. Households below poverty thresholds had lower intakes of fiber relative to households above poverty thresholds. Ethnicity, race, age of the household head, region, and the presence of children also had significant effects on dietary fiber derived from the respective food categories. A proposed 20 percent subsidy applied to fruits and vegetables would increase per person intake of fiber by 9.4 percent. Therefore, if one were to consider meeting the dietary fiber requirement only through the provision of a subsidy, a large subsidy applied to fruits and vegetables would be required. Therefore, given the complex nature of the various factors affecting the intake of dietary fiber, the feasibility of using subsidies alone to increase the intake of dietary fiber is called into question.
Consumers prefer bright, cherry-red retail beef. Retailers often mark down the price of discolored beef for quick sale. However, following this practice could result in a net loss of revenue if consumer willingness to pay (WTP) for nondiscolored beef is negatively affected by the presence of discolored beef in the consumer choice set. Through a hypothetical online survey and a controlled in-person experiment, we determine that marketing discolored beef together with nondiscolored beef increases most consumers’ evaluation of, but not their WTP for, nondiscolored beef.
This monographic issue of the RHE-JILAEH presents new case studies in order to compare regions of Asia, Europe and the Americas through analysis of global demand for western goods in China (goods of European and American origin) as well as demand eastern goods (of Chinese and Indian origin) in Europe and the Americas. The global circulation of goods included accumulation of American silver in the hands of Chinese merchants and private institutions. Thus, this issue re-evaluates origins of the first globalisation during the 16th century, as opposed to the 1820s. Global trade networks and long-distance alliances in Asia, the Americas and Europe date back to the 16th century when Manila galleon routes were established.
A large and growing body of literature has studied consumer willingness to pay (WTP) for local foods in the United States. However, these studies implicitly assume that consumers perceive local foods to have superior quality than nonlocal foods. Little is known about WTP for local foods when taking into account differences in consumer perception of food quality between local and nonlocal foods. In this article, we conduct an economic experiment to assess the effect of locally grown information on consumer WTP and quality perceptions of three broccoli varieties (one commercial variety grown in California and two newly developed local varieties). Our results show that consumers rate both the appearance and the taste of the two local broccoli varieties lower than the California variety when evaluating food quality blindly. However, consumers’ evaluations of the two local varieties improve substantially after being told the two varieties are locally grown. Results also indicate that consumers are willing to pay a price premium for the two local varieties after being told that they are locally grown. Our results provide evidence that locally grown information has a positive effect on both consumer WTP and quality perception of local foods.
New global history studies have provided theoretical models related to different paths of economic growth and consumer behaviour between East Asia (mainly China and Japan) and Europe during the period of the first industrialisation. However, more research challenging the Eurocentric views of the origins of globalisation is needed. In this article, I examine the exchanges of Chinese silks and porcelains and European wines and liquors for American silver through the Swedish Grill Company. This company had extensive business activities in Canton and Macao establishing strategic links and intermediation with other relevant companies from China, Manila, Seville and Marseille. On the global level, such exchanges played a crucial role for the accumulation of American silver in China during the Qing dynasty, and the outflows of Chinese goods to the Americas and Europe fostered market integration and globalisation that occurred earlier than 1820.
Consumer preferences are likely to become more important in policy and market initiatives in developing countries. This study explores current and potential demand for high-quality beef in Ecuador. A survey of 547 households (including two choice experiments) was carried out in order to gather knowledge, quality perceptions, and experiences regarding Ecuadorian beef and preferences for specific beef attributes. Consumers have positive and economically significant willingness-to-pay values for all credence attributes considered in the study: sanitary control, meat maturation, animal welfare, and traceability. The results provide evidence that there is a potential market for increased-quality beef in Ecuador.
This study connects Mexico’s imports of U.S. broiler meat with its imports of feed products. Two demand systems for Mexico are estimated: a two-stage Almost Ideal Demand System (AIDS) model for broiler meat and a demand for feed derived from a translog cost function representing the production of Mexican chickens. The models are estimated using data from 1997 to 2016. Given a change in policy where Mexico completely replaces U.S. broiler meat imports, the imports of U.S. feed products will increase. If Mexico does not completely replace U.S. imports with domestic broiler production, our model suggests that Mexican imports of U.S. feed fall.
Our research investigates the effects of residential energy efficiency audit programs on subsequent household electricity consumption. Here there is a one-time interaction between households, which participate voluntarily, and the surveyors. Our research objective is to determine whether and to what extent the surveys lead to behavioral changes. We then examine how persistent the intervention is over time and whether the effects decay or intensify. The main evaluation problem here is survey participants’ self-selection, which we address econometrically via several non-parametric estimators involving kernel-based propensity-score matching. In the first method we use difference-in-differences (DID) estimation. Our second estimator is quantile DID, which produces estimates on distributions. The comparison group consists of households who were not yet participating in the survey but participated later. Our evidence is that the customers who participated in the survey reduced their electricity consumption by about 7%, on average compared to customers who had not yet participated in the survey. Considering the total number of high-usage households participating in the survey in 2009, we estimate that electricity consumption was reduced by an aggregate of 2 million kWh per year, which is approximately equal to the monthly consumption of 3500 typical households in California with an estimated 1527 metric tons less of carbon dioxide emissions. Because the energy audit program is inexpensive ($10–$20 per household) a key issue is that while the program is cost-effective, is it regressive? We find that as the quantiles of the outcome distribution increase, high-use households save proportionally less electricity than do low-use customers. Overall, our results imply that program designers can better target low-use and low-income households, because they are more likely to benefit from the programs through energy savings.
The United States saw a rapid transformation of its labor market when the female employment to population ratio nearly doubled from 1950 to 2000. As women shift their hours from the home sector to the market sector, goods that were previously produced in the home may be replaced by market services. This paper uses the Panel Study for Income Dynamics, Consumer Expenditure Survey, and the American Time Use Survey to analyze the extent to which households replace home production with purchased market services, and how the relationship between men’s and women’s labor supplies affects these decisions. We show that women who are employed spend less time on home production activities that have close market alternatives than women who are not employed. Additionally, expenditures on market services that can replace home production are higher for married households in which the woman is employed compared to those with nonworking women.
This study measures willingness to pay (WTP) for extrinsic attributes (Angus, local, DNA traceable, raised carbon friendly, and humanely treated cattle) in steak and ground beef using choice-based experiments from a national consumer survey. Belief that survey responses could have consequences on beef products offered by the steak and ground beef industry is investigated, as well as its effect on attribute WTP. For most attributes, belief in consequentiality increases WTP. Results suggest that although consequentiality believers tend to place greater importance on certain food industry issues, they are less certain about the attribute's provision actually effecting change in the industry.