Eric J. Wailes

Household Demand in Rural China: A Two-Stage LES-AIDS Model

A complete demand system of Chinese rural households is estimated using a two-stage LES-AIDS model and pooled provincial and time-series data from 1982 to 1990. For commodity groups (food, clothing, fuel, housing, and other commodities), demand is price-inelastic. Housing and other commodities are luxury goods, while clothing and food are necessities. Within the food group, price elasticities range from −0.005 to −0.63. Expenditure elasticities are lower for grains and higher for meat, tobacco, and alcohol. The results imply a gap between food demand and supply growth. Therefore, China will face pressure to import food.

Supply and Social Cost Estimates for Biomass from Crop Residues in the United States

The components of social costsincluded in the supply analysis are cashoutlays and opportunity costs associated withharvest and alternative residue uses, potentialenvironmental damage that is avoided byexcluding unsuitable land, and costs in movingresidues from farms to processing plants. Regional estimates account for the growingconditions and crops of the main agriculturalareas of the United States. Estimates includethe main U.S. field crops with potential forresidue harvest: corn, wheat, sorghum, oats,barley, rice and cane sugar. The potentialcontribution of residues to U.S. energy needsis discussed.

A Two-Stage Rural Household Demand Analysis: Microdata Evidence from Jiangsu Province, China

In this paper we evaluate economic and demographic effects on Chinas rural household demand for nine food commodities: vegetables, pork, beef and lamb, poultry, eggs, fish, sugar, fruit, and grain; and five nonfood commodity groups: clothing, fuel, stimulants, housing, and durables. A two-stage budgeting allocation procedure is used to obtain an empirically tractable amalgamative demand system for food commodities which combine an upper-level AIDS model and a lower-level GLES as a modeling framework. The results indicate that the slow growth of food consumption in China during the latter half of the 1980s is a result of income stagnation rather than consumption saturation. Growth in the demand for better food and shelter by Chinese rural households will continue to be a major concern. Copyright 1996, Oxford University Press.

Food demand in rural China: evidence from rural household survey

The recent rural reforms in China have had great effects on agricultural production and productivity as well as rural household consumption. While much has been written on production and productivity effects of these reforms, very few Chinese studies have attempted to analyze the changes in rural consumption patterns. This paper uses a dynamic AIDS model to estimate various food demand parameters for Chinese rural households using rural household survey data recently released by the China State Statistical Bureau. The results show that all important food commodities including rice, wheat, coarse grains, vegetables, meat, tobacco and alcohol have positive expenditure elasticities. Rice, wheat and coarse grains are necessities, while meat, vegetables, alcohol and tobacco are luxuries. The expenditure elasticities for rice, coarse grains and tobacco are declining, but those for wheat, meat, vegetables and alcohol are increasing. As per capita income rises and population increases, the demand for these items will continue to increase. Therefore, China must continue to increase its food production by a greater rate in the future in order to avoid food shortages.

A quantitative analysis of trade policy responses to higher world agricultural commodity prices

From 2007 through mid-2008, world prices of major agricultural commodities, such as cereals, oilseeds, and their by-products, experienced unprecedented surges since World War II (Baffes and Haniotis 2010).1 The world food price indexes produced by the Food and Agricultural Organization (FAO) of the United Nations increased by 56 percent between 2006 and 2008, while cereals and vegetable oils price indexes doubled during the same period (FAO 2010). Although price pressure for these commodities was temporarily relieved in late 2008 and 2009, the world price indexes for food, grains, and vegetable oils have rebounded in 2011 to their former high levels again (Figure 11.1). The sudden price spikes of agricultural and food commodities in 2007– 2008 quickly caught worldwide attention because cereal grains such as rice and wheat are staples in many developing economies, while corn is an important feedstock for the growing livestock sector in both developed and developing countries. For some food-deficit developing economies that rely heavily on imports for food consumption, drastic increases in the prices of these crops threatened the nutritional needs and social stability of these economies. Moreover, in major Asian rice-producing and rice-consuming countries, rice availability and affordability is a focus of national food security and policies (Wailes 2005).

Impact of Rice Tariffication on Japan and the World Rice Market

The Uruguay Round Agreement of the World Trade Organization (WTO) and other trade agreements, such as NAFTA and MERCOSUR, have contributed to the increase in U.S. and world rice trade since 1994. Rice, however, continues to be one of the most highly protected agricultural commodities, with current tariff rates in several developing countries ranging from 50% to 230%. Protectionist policies for rice include tariffs, tariff rate quotas, state trading, and various domestic government programs (Amponsah, Colyer, and Jolly). Before implementation of the Uruguay Round Agreement, Japan and South Korea maintained an almost complete ban on rice imports. To begin opening these markets, the Uruguay Round provided special minimum market access (MA) rules with the goal of eventually shifting to tariffication. The grace period for tariffication was set at six years for Japan (1995 to 2000) and ten years for South Korea (1995 to 2004). South Korea received additional time for tariffication and a lower

A Microeconometric Analysis of Consumer Taste Determination and Taste Change for Beef

A new method for modeling determination of consumer taste and a test of the taste-change hypothesis is presented. Taste varies across households because of differences in household characteristics. The method has a Multiple Indicator and Multiple Cause model interpretation, with taste as an unobserved variable. Taste indicators are residuals of regular household demand functions, the factors unexplained by prices and household expenditures. Taste-cause variables are household characteristics and other variables. The proposed model is applied to U.S. beef demand using household data. Results show that structural taste changes, unexplained by changes in demographic composition, decreased 8% from 1977 to 1987. Copyright 1997, Oxford University Press.

Unbiasedness and Market Efficiency Tests of the U.S. Rice Futures Market

This study examines short-run and long-run unbiasedness within the U.S. rice futures market. Standard OLS, cointegration, and error-correction models are used to determine unbiasedness. In addition, the forecasting performance of the rice futures market is analyzed and compared to out-of-sample forecasts derived from an additive ARIMA model and the error-correction model. The results of our unbiasedness tests and the forecasting performance of the rice futures market provide supporting evidence that the U.S. long-grain rough rice futures market is efficient. The results have important price risk management and price discovery implications for Arkansas and U.S. rice industry participants.

LL601 Contamination and Its Impact on U.S. Rice Prices

LL601 is a genetically modified rice variety and unapproved for commercial use. Its presence was found in commercial shipments of U.S. rice in 2006. This article explores its impact on prices and volume marketed for both the United States and Thailand, the major export competitor. The results show a significantly adverse but short duration effect on the U.S. rice market and little to no effect on the Thai rice market.

U.S. Consumer Demand for Alcoholic Beverages: Cross-Section Estimation of Demographic and Economic Effects

Much research has been done on the control and taxation of alcoholic beverages (Ornstein; Atkinson, Gomulka, and Stem; Heien and Pompelli; Johnson et al.; Blaylock and Blisard). The unusual status and attention that alcoholic beverages have attracted is due mainly to their unique characteristics in consumer utilities and social concerns. Consumption of alcoholic beverages has been viewed not only in terms of its effect on individual utility maximization, but also in terms of its bearing on social concerns and government revenue. Although there is empirical evidence suggesting that moderate alcohol consumption lowers the risk of coronary heart disease (e.g. Maclure; Moore and Pearson), social concerns are based on the consequences of chronic and acute alcohol abuse. Because of these concerns, they are traditionally subject to some form of social control. One important form of control is the excise tax which contributes significantly to government revenue. The estimation of demand elasticities and the effects of household characteristic variables on alcohol demand provide important information for the formulation of public policies. However, it is with respect to current fiscal deficits and as a means to finance the Clinton administrations