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Vulnerability to external shocks such as supply shortages, price increases, disasters and political discord has severe implications for Caribbean food and nutrition security and the scale of economic losses. There is a need to understand how food price shocks impact Caribbean consumers, who are particularly vulnerable due to their heavy reliance on imported food. This study assessed the welfare impacts of rising imported food prices on Caribbean consumers using the linear approximated almost ideal demand system (LA-AIDS) model and compensating variation. The welfare implications of rising prices were assessed using three price shocks in: 2006–2008, 2010–2011, and 2020–2021. Hicksian price elasticities revealed that most imported food categories in the Caribbean region have inelastic demand, except for imported meat and seafood which was found to be elastic. Imported cereals and staples and fats and oils were the least responsive to price changes, while imported meat and seafood was highly responsive. The results of the compensating variation revealed that there were significant welfare losses in 2006–2008 and 2010–2011, when food prices drastically increased, as well as during the first year of the COVID-19 pandemic (2020–2021). Between 2006-2008 and 2010–2011, welfare losses were approximately US$1.54 billion and US$692.52 million, respectively, while food price inflation during the first year of the COVID-19 pandemic resulted in losses estimated at US$1.09 billion. This research highlights the need for regional policies to minimize welfare losses from rising food prices, including social safety nets for vulnerable households and investments in domestic agriculture and supply chain resilience.

The article is devoted to the development and approval of analytical tools, which should improve the sensitivity of common methods of household well-being by assessing the changes in the structure of consumer expenditures. For this purpose, it is proposed to use the concept of compensating variation (CV) and Slutsky's approach to graphic modelling and formal expression of the compensating variation. Application of the developed toolkit for assessing the dynamics of the Ukrainian households' well-being for the period 2014-2021 made it possible to clarify the distribution of inflationary pressure between households with different income levels. Groups of households were singled out, which due to the specific structure of their consumer expenditures (their high concentration on essential goods and services, the prices of which are growing faster than the aggregate consumer price index) find themselves in the position of "outsiders" and face a lack of growth nominal incomes, even in order to maintain consumption volumes (economic welfare) at the level of the basic period. Approbation of the proposed tools confirmed its analytical potential, in particular with regard to highlighting the contribution of certain product groups to the dynamics of household well-being and clarifying the features of the dependence between the dynamics of household income and the rate of growth of their economic well-being. [ABSTRACT FROM AUTHOR]

Food pantries provide groceries to millions of households in the United States every year. Although there is research and information on many other aspects of food pantries, including financial information such as tax valuations for donated food, there is not a literature establishing the economic value of food pantry access for clients and potential clients. We use a valuation approach from environmental economics, revealed preference travel cost modeling, in a novel application to estimate food pantry value. We use a rich administrative dataset from a food bank system in Colorado and estimate demand for pantry visits, exploiting the move of a local pantry to correct for endogeneity bias. We find that the annual value of pantry access to pantry client households is between $600 and $1000, and the value per pantry visit is between $40 and $60. If we assume these values hold nationally, our localized results imply that the collective value of food pantry access among pantry client households may be between $19 billion and $28 billion dollars annually. [ABSTRACT FROM AUTHOR]

Global food price inflation has serious implication toward welfare and food and nutrition security in developing countries where most of the population are classified as low-income and are net-food importers. Haiti is one such nation which depend heavily on trade for food, making them extremely vulnerable to global food price increase. This study aims to investigate the welfare impact of rising global prices of imported food on Haitian consumers using annual data from 1980-2021. The LA-AIDS model was employed to estimate Hicksian price and income elasticities for the five major imported food categories, and compensating variation was used to assess the welfare impacts of rising global food prices on Haitian consumers. The study finds that all imported food categories were import price inelastic, except for meat which was price elastic. Cross-price elasticities indicated substitution and complementary relationships between various pairs of imported food categories. Income elasticities showed that demand for cereals and dairy was income inelastic, while demand for meat, vegetable oil, and sugar was income elastic. The welfare exercise revealed that price increases between 2006-2008, 2010-2013, and 2020-2021 resulted in welfare losses of around US$223.91 million, US$89.33 million, and US$458.50 million, respectively. It was also discovered that imported cereals and vegetable oil accounted for most of the lost welfare during the study periods. The results of this study provide valuable information for policymakers to develop policy intervention strategies that aims to safeguard the welfare of Haitian consumers. [ABSTRACT FROM AUTHOR]

Increases in food prices in Nigeria have raised huge concerns on the impact welfare of poor households who have substantial share of their spending on food. This study investigated the welfare effects (including the direct and substitution effects) of food price changes on households in Nigeria. The study employed time series data on food prices from 1991-2013 and household survey data obtained from the National household Survey (wave 2). We group household consumption expenditure on different food and non-food commodities into nine (9) namely; fish, meat, pulses, fruit & vegetable, fat & oil, beverages, wheat, rice, corn, and others. Welfare effect was analyzed by compensating variation. The results showed that a safety net program would net to transfer an amount equivalent to 0.76%, 0.26% and 1.02% of the total national consumption to fully compensate the poorest quintile in rural, urban and at the national level respectively. And also, in the richest losers' quintile about 1.29% of the aggregate national consumption will be required by a safety net program to fully compensate them overall. The study concluded that food price changes related significantly with welfare status of the respondents as tested by CV model. Welfare gain was enjoyed mostly by urban household whose mean compensated variation was as high as 18% compared with 14% for rural household. [ABSTRACT FROM AUTHOR]

In this paper we extend the Hicksian compensating variation welfare measure in two directions. First, we adjust the size of the compensating variation in order to account for the fact that the compensating transfers will result in changes in output, as well as in prices, because labor and, in dynamic models, capital will adjust in response to these transfers. Second, we extend the measure to a dynamic setting with possibly time non-separable preferences. We find that these considerations become more significant for the welfare cost of higher labor income taxes as one moves from static to dynamic models, to models with time non-separable preferences, and finally to models with uncertainty. [ABSTRACT FROM AUTHOR]

Liquid money controlled by a trustworthy central bank can serve as an insurance against external surprises such as stock market crashes, bank fails and other setbacks that endanger the yield of illiquid savings. In turbulent times, the insurance property of money is particularly accentuated. The paper constructs a life cycle framework for the analysis of rational and irrational motives to save money, answers to questions about the effects of saving liquid money on labor supply, illiquid saving and education, and examines the inherent cost of saving cash. The main findings are the following. The rational insurance motive to save money increases total savings by replacing deposit saving more than one-to-one. The share of deposit savings depends positively on the expected interest rate, while the share of cash savings is the higher the less there is inflation. Deposit saving correlates positively and education negatively with the expected market interest rate thus affecting the relative proportion of liquid and illiquid saving, but the implicit cost of cash insurance is independent of education. Money illusion adds an internal bias to consumers' life-time optimization, thus making them save excessively in cash at the cost of market deposits and increasing the cost of using cash as insurance against external uncertainty. [ABSTRACT FROM AUTHOR]

Due to the necessity of cognizance of demand for the various forms of energy in the agricultural sector in Iran’s economy and considering the effects of price liberalization policies on forms of energy, analysis of the main energy carriers’ demand is very important. This study used the LA-AIDS approach and ISUR technique to estimate the demand and elasticities for various energy carriers. Also, the welfare effects of increasing energy prices under the 20, 40, 60, 80 and 100% scenarios are evaluated using the compensating variation (CV). The uncompensated and compensated own-price demand elasticities for oil products, electricity and, natural gas carriers were −1.21, −0.85 and −0.55, and −0.98, −0.32 and −0.30, respectively, confirming the demand theory. The cross-price elasticities showed that electricity has substitutability and complementarity relationship with oil products and natural gas, respectively, while the relationship between natural gas and oil products is a substitutability relationship. The income elasticities of energy usages estimated to be 0.64, 1.2 and 1.05. Agricultural producers’ welfare would experience a further decrease in oil products and electricity price liberalization, though the welfare impacts of natural gas are trivial. As price elasticity is different in the agricultural sector, price policies, then price liberalization and omitting energy subsidy should be applied based on the elastic or inelastic of energy carriers. The price policies effectiveness on oil products is more than electricity and natural gas. Given the prevalence of consumption and high price elasticities of oil products and pollutants, rising oil prices can reduce their consumption and environmental pollution.

Liquid money controlled by a trustworthy central bank can serve as an insurance against external surprises such as stock market crashes, bank fails and other setbacks that endanger the yield of illiquid savings. In turbulent times, the insurance property of money is particularly accentuated. The paper constructs a life cycle framework for the analysis of rational and irrational motives to save money, answers to questions about the effects of saving liquid money on labor supply, illiquid saving and education, and examines the inherent cost of saving cash. The main findings are the following. The rational insurance motive to save money increases total savings by replacing deposit saving more than one-to-one. The share of deposit savings depends positively on the expected interest rate, while the share of cash savings is the higher the less there is inflation. Deposit saving correlates positively and education negatively with the expected market interest rate thus affecting the relative proportion of liquid and illiquid saving, but the implicit cost of cash insurance is independent of education. Money illusion adds an internal bias to consumers’ life-time optimization, thus making them save excessively in cash at the cost of market deposits and increasing the cost of using cash as insurance against external uncertainty.

We adopt an EASI model to estimate demand for omega-3, organic, cage-free, and conventional eggs in the United States. Our empirical framework accounts for demand inter-dependencies among these egg types, while allowing for unrestricted Engel curves, unobserved consumer heterogeneity, and a broader product and geographic coverage. We further address endogeneity of prices and expenditures and left-censoring induced by disaggregate data. Our results indicate that the demand for organic and cage-free eggs is price-elastic, while the demand for omega-3 and conventional eggs is price-inelastic. Additionally, we establish strong substitutability relationships between the eggs. Finally, we measure consumer welfare consequences of rising domestic egg prices brought by Japan's egg import tariff reductions. [ABSTRACT FROM AUTHOR]

Food prices regularly change due to various factors such as the policy on imports. This paper analyzes the impact of changes in food prices including rice, red onions, and garlic, on farmers’ welfare. The Quadratic Almost Ideal Demand System (QUAIDS) was used to estimate the demand function for food commodities, and the Compensating Variation (CV) was used to estimate the impact of price changes both immediately and in the short-term. This study contributes an idea of how the government makes its policies on food prices and imports, and how they provide benefits for farmers in Indonesia. Data were collected from the 2014 National Socio-economic Survey (SUSENAS). The research results indicated that income improvement led to the increase in rice, red onion and garlic consumption. The dynamics of income, own-price and cross-price elasticity varied, depending on demography, the social economic condition, and the geographic location of the household. The short-term impact of imported products on welfare changes was larger than the immediate impact.

Due to the necessity of cognizance of demand for the various forms of energy in the agricultural sector in Iran's economy and considering the effects of price liberalization policies on forms of energy, analysis of the main energy carriers' demand is very important. This study used the LA-AIDS approach and ISUR technique to estimate the demand and elasticities for various energy carriers. Also, the welfare effects of increasing energy prices under the 20, 40, 60, 80 and 100% scenarios are evaluated using the compensating variation (CV). The uncompensated and compensated own-price demand elasticities for oil products, electricity and, natural gas carriers were −1.21, −0.85 and −0.55, and −0.98, −0.32 and −0.30, respectively, confirming the demand theory. The cross-price elasticities showed that electricity has substitutability and complementarity relationship with oil products and natural gas, respectively, while the relationship between natural gas and oil products is a substitutability relationship. The income elasticities of energy usages estimated to be 0.64, 1.2 and 1.05. Agricultural producers' welfare would experience a further decrease in oil products and electricity price liberalization, though the welfare impacts of natural gas are trivial. As price elasticity is different in the agricultural sector, price policies, then price liberalization and omitting energy subsidy should be applied based on the elastic or inelastic of energy carriers. The price policies effectiveness on oil products is more than electricity and natural gas. Given the prevalence of consumption and high price elasticities of oil products and pollutants, rising oil prices can reduce their consumption and environmental pollution. [ABSTRACT FROM AUTHOR]

It is widely recognized by scholars that amenities affect the individual well-being. Ample empirical evidence has been provided for developed countries, although this analysis for developing economies is scant. The aim of this paper is to study the association between locational specific characteristics and self-reported measures of subjective well-being. We focus our analysis in Chile, a developing country located in South America endowed with a rather heterogeneous set of amenities across cities. Using data from several sources to account for both natural and urban city amenities along with individual traits, our first results suggest that natural and urban amenities do affect the level of subjective well-being across Chilean cities. Afterwards, we allow for the estimated parameters associated to amenities vary to characterize the whole distribution rather than a single average parameter. This analysis uncovers the existence of unobserved individual heterogeneity, that is, individuals display different tastes for amenities not captured by observed traits, and consequently compensating variations associated to amenities differ across the sample. These results provide valuable elements to policy makers and city planners to the design of policies that enhance the population well-being and to the understanding of the development of cities in developing economies. [ABSTRACT FROM AUTHOR]

Introduction/Main Objectives: Significant price increases in food items and uncertainty in the market probably have a severe impact on society, and especially on low-income households. Background Problems: The increases in food prices could have a large impact on the economy and specifically on households. Thus, this study was conducted to investigate what the demand for food, specifically high-nutrient food items, and the impact on welfare are like in Indonesian households when food prices rise. Novelty: There is a great deal of empirical research into the impact of food price changes on household welfare, however studies that have focused on high-nutrient commodities, in particular on self-produced food, are still limited. Many of the previous studies used cross-sectional data for one period but this study used two-wave longitudinal data. Research Methods: Using a large sample of data from the Indonesian Family Life Survey (IFLS), this study employed the quadratic almost ideal demand system (QUAIDS) to identify the demand pattern and applied compensating variation (CV) to understand the impact of soaring food prices on welfare changes. Findings/Results: Overall, the analysis of the impact notes that when prices increase, all household groups would experience welfare losses. The poorest households would experience less of a welfare loss than the richest households, while a larger welfare loss is suffered by households in Java and rural areas. Conclusion: For the low-income households, having their own productive farms could overcome any economic shocks threatening them. Thus, the government should support small-scale farming through such strategic policies as giving them assistance and training in how to manage a small farm. [ABSTRACT FROM AUTHOR]

We analyze the potential welfare effect of energy subsidy reforms. The income distributions of eleven developing countries from different geographical regions are simulated using the assumption that income is lognormally distributed. We use the concept of the compensating variation to measure how much compensation is required to compensate consumers for a price increase in formerly subsidized goods. The behavior of consumers is modeled by a standard Cobb–Douglas and a quasilinear utility function. In the Cobb–Douglas case, a fixed fraction of income is spent on the subsidized good, which does not change after a price increase. With quasilinear preferences, the optimal amount of the subsidized good does not vary with income, but does change as prices change. We show theoretically and empirically that the required compensating variation can be set below the saved expenditures on subsidies, so a budget neutral reform can have a positive effect on social welfare. [ABSTRACT FROM AUTHOR]

What is the welfare effect of a price change? The paper addresses this question by empirically comparing welfare measures and computational methods under different demand systems, parameters choices and price shocks. In the context of individual welfare and as a rule of thumb, welfare measures converge to approximately the same values for price changes below 10%. Above this threshold, these measures start to diverge significantly. Budget shares play an important role in explaining such divergence, whereas the choice of demand system has a minor role. These findings generally hold in the context of social welfare. Statistical inference and stochastic dominance help to refine results, particularly for the lower parts of the income distributions. [ABSTRACT FROM AUTHOR]

Small and Rosen's (Econometrica 49(1):105–130, 1981) method for measuring consumer surplus using discrete choice models has been widely adopted in public policy analysis. For the case of a price change, the present paper elucidates five theoretical assumptions inherent within Small and Rosen's measure, and employs indifference maps to demonstrate that this measure is only applicable to the context of a single discrete choice free of non-linear income effects. The paper argues that, where non-linear income effects are present, the aforementioned theoretical assumptions should be relaxed, and the consumption context revised from discrete choice to discrete–continuous demand. Furthermore, the paper proposes a simple analytical method for approximating the expected Hicksian compensating variation in the presence of non-linear income effects, and compares the empirical performance of this method against existing methods using data from Morey et al. (Am J Agric Econ 75(3):578–592, 1993). As well as offering a simple approximation, the proposed method yields insights on the potential range of the compensating variation depending on the extent of switching between choice alternatives, and on the attribution of the compensating variation to the relevant choice alternatives. [ABSTRACT FROM AUTHOR]

Water scarcity frequently leads to a need for rationing. The choice of an adequate rationing method should be based on the impact on consumer welfare that is produced by each rationing plan. Some rationing schemes, such as the frequently used supply interruption method, can be regarded as changes in the characteristics of the good (in this case, time availability) that do not modify the pre-set consumer budget. Under the standard theoretical restrictions on consumer behavior compensating or equivalent variations/surpluses cannot be used to identify the impacts of these methods on household welfare. In this paper, we propose a set of sufficient conditions with respect to the utility function that allows for the evaluation of the compensating or equivalent variations/surpluses associated with changes in goods' quality, even if those goods are considered to be essential for consumers. We use these conditions to compare the welfare losses associated with the water supply cuts implemented in Seville (Spain) to those that would result if water was instead rationed using price changes. [ABSTRACT FROM AUTHOR]

Using subjective well-being estimations, this study analyzes whether compensating variations vary across space using a cross-sectional data set from Chile. To achieve this goal, it describes and compares two econometric ways of modelling unobserved spatial heterogeneity. Both approaches allow compensating variations to vary across spatial units by assuming some distribution a priori. One method assumes that the spatial heterogeneity can be represented by a discrete distribution (a group of regions that share the same coefficient) and the other that the preferences can be represented by a continuous distribution (each region has a different coefficient). The results show that focusing just on the average estimates of compensating variations, as the applied studies have done so far, masks useful local variation. More empirical studies are needed to assess the advantages and disadvantages of both econometric approaches and how their results compare across a wide range of conditions and samples. [ABSTRACT FROM AUTHOR]

The price fluctuations due to adjustments to Iran's national milk pricing policy affect households’ welfare. This study examines the effect of milk price increases on the welfare of urban income groups using time series data during 1982-2009. The relationships among per capita demand for milk, average milk price and disposable per capita income were estimated for five income groups using Autoregressive Distributed Lags (ARDL) model. The results indicate that compensating variation and welfare are downside, this means that elimination of milk subsidies results in more welfare fluctuations in low income groups than that of high income ones. Therefore, it is difficult for groups at lower income levels to compensate for losses. If the government divides the cost of lost subsidies equally among households, financial losses resulting from price increases cannot be compensated for two groups, but higher income groups will benefit most from redistribution policy.

A lifelong gluten-free diet is the only available treatment for coeliac disease at present. However, the high price of gluten-free substitute foods is likely to generate a welfare loss for consumers who drop gluten from their diet. Using original data on retail prices in four major UK supermarkets and consumption data from the UK Living Cost and Food Survey, we simulate the welfare change associated to a switch to the gluten-free diet. Within the “Bread and Cereals” category, retail price data show that the average price of gluten-free products is £1.12/100g relative to £ 0.59/100g of gluten-containing products. Our estimates indicate that on average in the UK coeliac consumers have to pay an extra £ 10 per week to maintain their utility levels prior to the dietary switch. This correspond to 29% of the weekly food budget. Results by income quartile are suggestive of regressive effects and the welfare loss for low-income consumers is estimated at 36% of their food budget compared to 24% of high-income consumers. [ABSTRACT FROM AUTHOR]

Food prices regularly change due to various factors such as the policy on imports. This paper analyzes the impact of changes in food prices including rice, red onions, and garlic, on farmers' welfare. The Quadratic Almost Ideal Demand System (QUAIDS) was used to estimate the demand function for food commodities, and the Compensating Variation (CV) was used to estimate the impact of price changes both immediately and in the short-term. This study contributes an idea of how the government makes its policies on food prices and imports, and how they provide benefits for farmers in Indonesia. Data were collected from the 2014 National Socio-economic Survey (SUSENAS). The research results indicated that income improvement led to an increase in rice, red onion, and garlic consumption. The dynamics of income, own-price and cross-price elasticity varied, depending on demography, the social economic condition, and the geographic location of the household. The shortterm impact of imported products on welfare changes was larger than the immediate impact. [ABSTRACT FROM AUTHOR]

The message of this research is that in the standard calibrated setting of Computational General Equilibrium (CGE) models, the welfare measures typically used to compare benchmark with counterfactuals are numéraire dependent. This evaluation bias affects the compensating variation and the Konüs index of cost of living. We show that the equivalent variation is neutral regarding the choice of value units in calibrated models but would be affected as well in uncalibrated CGE models. We illustrate with a simple example and propose an even simpler theoretical solution to overcome these biases; all that is required to have correct welfare estimates is to compensate normalizing with a suitable price index. This type of correction is necessary to overcome the sometimes blind implementation of welfare measures in numerical general equilibrium analysis. We show that the induced quantitative errors may be substantial providing biased welfare estimates and misleading results. [ABSTRACT FROM AUTHOR]

This paper develops nonparametric methods for welfare‐analysis of economic changes in the common setting of multinomial choice. The results cover (a) simultaneous price‐change of multiple alternatives, (b) introduction/elimination of an option, (c) changes in choice‐characteristics, and (d) choice among nonexclusive alternatives. In these cases, Marshallian consumer surplus becomes path‐dependent, but Hicksian welfare remains well‐defined. We demonstrate that under completely unrestricted preference‐heterogeneity and income‐effects, the distributions of Hicksian welfare are point‐identified from structural choice‐probabilities in scenarios (a), (b), and only set‐identified in (c), (d). In program‐evaluation contexts, our results enable the calculation of compensated‐effects, that is, the program's cash‐equivalent and resulting deadweight‐loss. They also facilitate a theoretically justified cost‐benefit comparison of interventions targeting different outcomes, for example, a tuition‐subsidy and a health‐product subsidy. Welfare analyses under endogeneity is briefly discussed. An application to data on choice of fishing‐mode illustrates the methods. [ABSTRACT FROM AUTHOR]

The objective of disability policy is to create a society where people with disabilities and their families enjoy an equal standard of living to those without disabilities, though evidence to underpin policy is sparse. We defined the compensating variation (CV) of child disability as the amount of additional income a family with a disabled child would require to achieve the same living standards as a similar family without a disabled child. The aims of this study were to estimate the CV for child disability and to explore how this varied for different levels of disability and reference levels of living standards. Using data on 54,641 families from the Family Resources Survey (2004-2012), we matched families with (cases) and without (controls) a disabled child on family and child characteristics plus living standards and calculated the income difference inclusive of disability benefits. Our findings suggest that across families with the most disabled children, a compensating variation equal to an extra £56-£79 a week was required to achieve the same living standards as matched families without a disabled child compared with the mean level of state disability benefit £47-£71 a week in this group. [ABSTRACT FROM AUTHOR]

Random utility models are widely used to study consumer choice. The vast majority of applications assume utility is linear in consumption of the outside good, which imposes that total expenditure on the subset of goods of interest does not affect demand for inside goods and restricts demand curvature and pass‐through. We show that relaxing these restrictions can be important, particularly if one is interested in the distributional effects of a policy change, even in a market for a small budget share product category. We consider the use of tax policy to lower fat consumption and show that a specific (per unit) tax results in larger reductions than an ad valorem tax, but at a greater cost to consumers. [ABSTRACT FROM AUTHOR]

To broaden the operational scope of monetary policy, several authors suggest cash abolition as an appropriate means of breaking through the zero lower-bound. We argue that the welfare costs of bypassing the zero lower-bound by getting rid of cash entirely are analytically equivalent to negative interest rates on cash holdings. Using a money-in-the-utility-function model, we measure in two ways the welfare loss consumers as money holders would be forced to bear once the zero lower-bound is broken: in terms of the amount needed to compensate consumers (compensated variation), and as excess burden (deadweight loss) imposed on the economy as a whole. We calibrated the model for the euro area and for Germany. Our findings suggest that the welfare losses of negative interest rates incurred by consumers as holders of cash and transaction balances (M3) are large and enduring, notably if implemented in the current low-interest rate environment.

The realization of buyback welfare enhancing opportunities is conditioned to the ability of government agencies to place bids consistent with the shadow price of irrigators. However, methods used to inform buyback programmes to date either rely on ex-post trading data that is not readily available in most regions worldwide; or compensate projected foregone income, and thus ignore the effects that buyback may have on other relevant attributes determining utility. This paper uses revealed preference methods to elicit the parameters of a multi-attribute objective function that mimics the observed behavior of irrigators in the overexploited Segura River Basin in SE Spain. Objective functions are used in a series of simulations in which water allocation is progressively constrained to ex-ante reveal the shadow price of water using two alternative compensation measures: i) the foregone income, a proxy of the shadow price typically used in the literature; and ii) the compensating variation that addresses foregone utility. Results show a relevant gap between the two methods For example, restoring the balance in the basin through purchase tenders would demand an investment of million 2400+ EUR (9.6+ EUR m −3 ) attending to the foregone income method, and million 950+ EUR (3.8+ EUR m −3 ) (−60.3%) with the foregone utility method. [ABSTRACT FROM AUTHOR]

Summary This paper illustrates the sharp contrast in welfare impacts between the rich and the poor caused by typhoon Milenyo in a Philippine village. We find that fish prices dropped sharply due to the damage caused to fish pens near the village, leading to positive net welfare gains among the wealthy. In contrast, the poor do not consume much fish and thus did not gain from the sharp decline in prices. Finally, consumption reallocation played an important role as an ex post risk-coping measure, albeit only among the wealthy, who are relatively well-protected against typhoons. [ABSTRACT FROM AUTHOR]

Background Conditional reimbursement of new health technologies is increasingly considered as a useful policy instrument. It allows gathering more robust evidence regarding effectiveness and cost-effectiveness of new technologies without delaying market access. Nevertheless, the literature suggests that ending reimbursement and provision of a technology when it proves not to be effective or cost-effective in practice may be difficult. Objectives To investigate how policymakers and the general public in the Netherlands value removing a previously reimbursed treatment from the basic benefits package relative to not including a new treatment. Methods To investigate this issue, we used discrete-choice experiments. Mixed multinomial logit models were used to analyze the data. Compensating variation values and changes in probability of acceptance were calculated for withdrawal of reimbursement. Results The results show that, ceteris paribus, both the general public (n = 1169) and policymakers (n = 90) prefer a treatment that is presently reimbursed over one that is presently not yet reimbursed. Conclusions Apparently, ending reimbursement is more difficult than not starting reimbursement in the first place, both for policymakers and for the public. Loss aversion is one of the possible explanations for this result. Policymakers in health care need to be aware of this effect before engaging in conditional reimbursement schemes. [ABSTRACT FROM AUTHOR]

The paper analyses the effects of food price inflation on Ghanaian households using GLSS-5 household data. Expenditure endogeneity and truncated expenditures were controlled in the estimation process using the “Augmented Regression Approach” and Heckman’s two-stage procedure, respectively. Symmetry and homogeneity conditions were rejected in the unconstrained LA/AIDS model. The study reveals that cereals and bread; fish; vegetables; and roots and tubers will continue to constitute important share of Ghanaian food expenditure as they collectively constitute 67% of future food expenditure. Food price inflation between 2005 and 2011 has eroded real household food purchasing power by 47.18%.

This study identifies consumer welfare from new brand introductions in the potato chip market. Price and variety effects of new brand introduction are measured by estimating a demand system underlying an expenditure function. Variety effects are positive in most cities, while price effects are generally negative when consumers exhibit some variety preference. Variety effects dominate price effects in most cities; an opposite effect observed in some cities may indicate high entry barriers or joint brand- and price-based marketing strategies. Results indicate that consumers and producers gain from product innovations, but substantial regional variation exists in the distributional effects of new brand introduction.

This short paper introduces a few concepts from environmental, energy, and health economics that may be useful in evaluations of infrastructure investment in R&D. These concepts focus on valuing commodities and resource stocks under uncertainty. In particular, households may value a commodity (or a resource stock or a species) even if they never will consume the commodity. This may also be true for services generated by R&D infrastructure. Similarly, there are existence values, i.e., a household may be willing to pay for the saving of an endangered species. This may also be true for some R&D infrastructure, i.e., they may be classified as a (world) heritage. They also generate new medical treatments saving lives as well as curing non-fatal diseases. Health and environmental economists have since long dealt with the valuation of such benefits. [ABSTRACT FROM AUTHOR]

In recent years, produce imports to the United States from the southern hemisphere made wintertime consumption common. Focusing on imports of fresh berries - strawberries, blueberries, blackberries and raspberries - this study asks what is the value to consumers of increasing the availability of berries in winter? The study adapts Hausman's new product introduction methods. The largest benefits were associated with initiating trade. Further increases suggest smaller benefits. Among the four berries, consumer benefits of initiating trade are largest for strawberries at $2.5 billion, over twice current expenditures. Further price reductions might generate further benefits of $520 million annually. [ABSTRACT FROM AUTHOR]

In the light of European energy efficiency and clean air regulations, as well as an ambitious electric mobility goal of the German government, we examine consumer preferences for alternative fuel vehicles (AFVs) based on a Germany-wide discrete choice experiment among 711 potential car buyers. We estimate consumers’ willingness-to-pay and compensating variation (CV) for improvements in vehicle attributes, also taking taste differences in the population into account by applying a latent class model with 6 distinct consumer segments. Our results indicate that about 1/3 of the consumers are oriented towards at least one AFV option, with almost half of them being AFV-affine, showing a high probability of choosing AFVs despite their current shortcomings. Our results suggest that German car buyers’ willingness-to-pay for improvements of the various vehicle attributes varies considerably across consumer groups and that the vehicle features have to meet some minimum requirements for considering AFVs. The CV values show that decision-makers in the administration and industry should focus on the most promising consumer group of ‘AFV aficionados’ and their needs. It also shows that some vehicle attribute improvements could increase the demand for AFVs cost-effectively, and that consumers would accept surcharges for some vehicle attributes at a level which could enable their private provision and economic operation (e.g. fast-charging infrastructure). Improvement of other attributes will need governmental subsidies to compensate for insufficient consumer valuation (e.g. battery capacity). [ABSTRACT FROM AUTHOR]