George J. Mergos

Residential demand for electricity: The case of Greece

This paper examines the determinants of residential electricity consumption in Greece over the period 1961-86. The paper presents first a brief description of the evolution of residential electricity consumption. Then, it proceeds in the estimation of elasticities of residential demand for electricity using a single equation model with the ridge regression method. The paper concludes that (i) the residential demand for electricity is price inelastic and income elastic; (ii) there is high substitutability between electricity and LPG; (iii) during the examined period the number of consumers played a very important role in the expansion of electricity consumption in Greece; and (iv) there is no regional variation in residential electricity demand.

Estimating theoretically consistent demand systems using cointegration techniques with application to Greek food data

Abstract The use of time-series techniques (cointegration and error correction models) has been offered as a potentially promising way in estimating demand systems that resolve the perennial issue of violating the theoretical postulates of homogeneity and symmetry. The empirical results of this paper, based on linearized AIDS and Greek food data, indicate that sample size, aggregation schemes and model specification seem to be important factors in the estimation of a theoretically consistent demand system. They also show that homogeneity is sensitive to sample size, while symmetry is sensitive to the aggregation scheme adopted.

Energy demand in Greece : The impact of the two energy crises

Abstract This paper examines the impact of the two energy crises — 1973/74 and 1978/79 — on energy demand in Greece. Initially some specific characteristics of energy consumption patterns before and after 1973 are presented and compared. Then demand parameters for hydroelectric energy, liquid fuels and solid fuels were estimated using data for the period 1963–1984, and alternative econometric methods (OLS, 2SLS, FIML) to ensure that estimates do not vary across different estimation methods. Appropriate tests were used to examine whether a structural change in energy demand has occured following either of the two crises. The results indicate that while consumption patterns may be different due to price and income changes after the crises, the parameters of energy demand in Greece have remained unchanged.

Total Factor Productivity Growth and Technical Change in a Profit Function Framework

This paper develops a framework for measuring and decomposing TFP changes, within the parametric approach, by using directly the estimated parameters of a profit function. Two alternative relationships are derived for measuring and decomposing TFP changes via a profit function based on two alternative definitions of the rate of technical change, i.e., input- and output-based. Initially a long-run equilibrium framework is assumed and then the analysis is extended to the case of temporary equilibrium. The latter framework is applied to US agriculture by estimating a translog profit function and analyzing TFP changes during the period 1948–1994.

Consumer behaviour in Greece: an application of the almost ideal demand system

This paper estimates the Almost Ideal Demand System on Greek data for the period 1960–1986 for seven commodity groups. The results conform with earlier research findings that the homogeneity and symmetry restrictions of demand theory are broadly inconsistent with the data. The imposition of the restrictions leads to substantial changes in the estimated elasticities in both the static and dynamic specifications. The introduction of habit effects with lagged consumption, supported statistically by the data, led to plausible results leaving, however, the problem of rejection of homogeneity and symmetry intact.

Fertilizer demand in Greece

Limiting fertilizer use is becoming an important policy objective world-wide. However, the debate on appropriate policy measures is far from settled and evidence on fertilizer demand elasticities is still insufficient. Past studies on fertilizer demand leave several methodological and empirical issues open. This paper aims to contribute to the debate on the methodology of estimating fertilizer demand using single-equation methods. Dynamic aspects are also considered using error-correction modelling methodology and cointegration techniques. The model is applied using data from Greece. Short-run and long-run price elasticities of fertilizer demand with respect to own price and to output prices show significant response to price changes and the adjustment coefficient of fertilizer use to the error-correction term was found to be fairly rapid. The main policy conclusion of the paper is that reducing agricultural support may be an alternative and, perhaps, more effective way of reducing fertilizer demand than increasing fertilizer prices.

Analysing agricultural policy reforms under transition in Bulgaria

Abstract The elaboration of an appropriate incentive system, including measures of agricultural price and trade policy has important consequences for Bulgarian agriculture. This paper offers a brief picture of the process of reform towards the establishment of a market economy in Bulgaria, as well as of the main developments in its agricultural sector. An analysis is then presented of the impact of alternative agricultural price and trade policy scenarios for the period up to 2002. The results show that the impact of price and trade policies is modest when compared to that of technological change and the increase in incomes. Adoption of the CAP will stimulate production, decrease demand and have strong adverse effects on consumers and taxpayers and wider negative effects on the competitiveness of the food industry. Thus the issue of extending financial support for structural policies rather than granting direct aid requires further investigation.

Evaluation of irrigation projects under uncertainty: a symmetric quadratic programming approach

Experience with irrigation projects in developing countries has shown that a substantial number of projects have not been able to achieve the planned change in the cropping pattern envisaged at appraisal with the implication of a lower ex post economic rate of return.This paper shows that this may be caused by the questionable assumption of economic certainty built in the benefit-cost analysis of almost all projects. The paper begins with a brief overview of the treatment of economic uncertainty in irrigation projects and then demonstrates how uncertainty may inhibit adoption of high-value crops and result in lower project benefits. Finally, the sources of revenue and cost uncertainty are explicitly illustrated with actual irrigation project data.

Exploring the Impact of Agricultural Price and Trade Policy Reform under Transition in Albania

Agricultural policy decision making in economies undergoing transition to market is in need of empirical tools for assessing the impact of alternative policy options. The econometric means available for such exercise, however, are limited for lack of data and structural breaks in economic behaviour. Synthetic, partial equilibrium, multi-market models offer a potential alternative. Such models have been used extensively, even in advanced economies, to offer valuable insights on the impact of alternative policy options. This paper shows the use of such a partial equilibrium, multi-market, synthetic-type model as a tool for agricultural policy analysis in a country in transition. The model is applied for Albania, a predominantly agricultural country that, after a period of centralism and autarky, aims to re-join the international economic system. The model, albeit its many limitations, offers some useful insights on the impact of alternative options available for agricultural price and trade policy.

Modelling food consumption patterns in Greece

Modelling consumption patterns is of interest for both theoretical and policy reasons. This paper presents a methodology for modelling consumption patterns combining a theory-based with a data-based approach and it continues with an application to Greek data. The adopted AIDS-ECM quantitative methodology aims to estimate the expected trends in consumption patterns in Greece following an increase in available income over the 2001–2010 period. Three scenarios are examined: the first scenario considers the EU projections for private consumption expenditure, 3% per annum, the second scenario assumes a higher growth of 5% per annum and the third scenario a 1% increase. The results of the first stage expenditure aggregation show a decrease in the budget share for the food group in all scenarios under consideration while the opposite is true for ‘transportation and communication’ and ‘others’. Finally, the second stage expenditure aggregation estimates show an increase in the budget share for meat, fruits and vegetables and oils and fats, while the opposite is true for bread and cereals and other food.