We explore a methodological improvement to the standard dynamic demand model for petrol–a general model which allows for slowly evolving, unobservable habits. If this habit formation model is correct, then standard estimation techniques produce inconsistent estimates. We find price elasticities of -0.13 (short-run) and -0.20 (long-run). Importantly, standard techniques are misleading about the ...

Using retail purchase data reported by Nielsen‘s Homescan panel this study investigates the U.S. demand for organic and conventional fresh fruits. The study fills an important research void by estimating the much needed income and price elasticities for organic and conventional fruits utilizing a censored demand approach. Household income is found to affect organic fruit consumption. Consumers ...

The authors derive an expression for the price elasticity of demand in the presence of reference price effects that includes a component resulting from the presence of gains and losses in consumer evaluations. The effect of reference price is most noticeable immediately after a price change, before consumers have had time to adjust their reference price. As a result, immediate-term price elasti...

this paper evaluates the welfare effects of price changes in the main commodity groups in iran. using the iranian urban households’ data issued by the iranian statistics center over the period 1994-2007 we estimate the subsistence level. in addition, using the results from the linear expenditure system we calculate the price and income elasticities along with the compensation and equivalent var...

While there has been strong managerial and academic interest in price promotions, much of the focus has been on the impact of such promotions on category sales, brand sales and brand choice. In contrast, little is known about the long-run impact of price promotions on manufacturer and retailer revenues and margins, although both marketing researchers and practitioners consider this a priority a...

Market share models for weekly store-level data are useful to understand competitive structures by delivering own and cross price elasticities. These models can however not be used to examine which brands lose share to which brands during a specific period of time. It is for this purpose that we propose a new model, which does allow for such an examination. We illustrate the model for two produ...

India has been running large-scale interventions in the energy sector over the last decades. Still, there is a dearth of reliable and readily available price and income elasticities of demand to base these on, especially for domestic use of traditional fuels. This study uses the linear approximate almost ideal demand system (LA-AIDS) using micro data of more than 100,000 households sampled acro...

Supply and demand functions are typically estimated using uniform prices and quantifies across products, but where .products are heterogeneous, it is important tO Consider quality differences explicitly. This paper demonstrates a new approach to doing this by employing hedonic coefficients to estimate price elasticities for differentiated products in the market for personal computers. Differenc...

Since China accelerated its market oriented economic reforms at the end of 1992, its energy intensity has declined 3.6% annually over 1993–2005. However, its energy intensity declined 4.2% annually during its first reform period 1979–1992. Therefore, can we conclude that the accelerated marketization since the end of 1992 has made no contribution to its energy efficiency improvement? In order t...

We consider market models in which the supply and demand functions are determined by their price elasticities. obtain sufficient conditions for existence of an equilibrium state economic system.