Kyrre Rickertsen

Efficient Estimation of Hedonic Inverse Input Demand Systems

This article is concerned with efficient estimation of characteristics demand. We derive and estimate an inverse input demand system for quality characteristics by using 172,946 observations over 881 trading days in the Icelandic fish auctions. An improved estimation method based on an expanded random coefficient model is suggested as an alternative to the currently used two-stage method of Brown and Rosen. The estimates demonstrate the improved efficiency of the suggested method. A number of empirical results emerge, including a general increase in the demand for quality. Copyright 2004, Oxford University Press.

The effects of taxes on purchases of sugar-sweetened carbonated soft drinks: a quantile regression approach

The consumption of large quantities of Sugar-Sweetened Carbonated Soft Drinks (SSCSD) may lead to obesity, which is associated with health problems such as diabetes, cardiac diseases and mental health problems. The effects of increasing the Value Added Tax (VAT) on purchases of SSCSD are estimated. Obesity is more likely among heavy drinkers than among light or moderate drinkers. Therefore, the effects on high- and low-purchasing households are estimated by using Quantile Regressions (QRs) on Norwegian household purchase data. Since many households did not purchase SSCSD during each survey period, censored as well as ordinary QRs are used. Our results suggest that a VAT increase from 13 to 25% will have the highest percentage effect among low-purchasing households but the absolute effect is highest among high-purchasing households. Low-purchasing households will reduce their purchases by about 5 L while the reduction is almost 20 L among high-purchasing households. However, the effects among high-purchasing households are not statistically significant from zero. A reduction of 5 L corresponds ceteris paribus to an annual reduction of about 0.3 kg of body weight.

Hedonic Price Models for Dynamic Markets

The price of a product depends on its characteristics and will vary in dynamic markets. The model describes a processing firm that bids in an auction for a heterogeneous and perishable input. The reduced form of this model is estimated as an expanded random parameter model that combines a nonlinear hedonic bid function and inverse input demand functions for characteristics. The model was estimated by using 289,405 transactions from the Icelandic fish auctions. Total catch and gut ratio were the main determinants of marginal prices of characteristics, while the price of cod mainly depended on size, gutting and storage.

Consumer attitudes toward low stake risk in food markets

Consistency of quality is viewed as important for producers of consumer goods. However, there is no literature testing the importance of quality consistency on consumers’ willingness to pay for consumer goods. We use an experimental auction market to investigate how inconsistency in tenderness affects consumers’ willingness to pay for beef. We find that most consumers are risk averse with respect to sensory quality. Both the average tenderness and the variance of tenderness affected the consumers’ willingness to pay for beef. Reducing the uncertainty of the sensory quality by categorizing the beef into three tenderness classes increased the total value of the beef by 8%.

French Consumers’ Attitudes and Preferences toward Wild and Farmed Fish

ABSTRACT We investigated consumer preferences for wild and farmed fish in an experiment with 276 participants in France. The experiment consisted of three rounds—each round included a survey, sensory trials, and bidding. The survey results indicate consumers (1) perceive wild fish best for safety and health and farmed fish best for environmental sustainability and fish welfare; (2) rank salmon the highest on many attributes; and (3) prefer wild fish originating from the North Atlantic to farmed fish from France and northern Europe, and they rank farmed fish originating from developing countries lowest. In the sensory trials, salmon received the highest hedonic scores, followed by monkfish and cod, while pangasius scored significantly lower. Willingness to pay for salmon was almost as high as for monkfish and higher than for cod, while WTP for pangasius was substantially lower. JEL Codes: C91, D12, Q22.

Age and socioeconomic inequalities in health: examining the role of lifestyle choices.

The role of lifestyle choices in explaining how socioeconomic inequalities in health vary with age has received little attention. This study explores how the income and education gradients in both important lifestyle choices and self-assessed health (SAH) vary with age. Repeated cross-sectional data from Norway (n=25,016) and logistic regression models are used to track the income and education gradients in physical activity, smoking, consumption of fruit and vegetables and SAH over the age range 25-79 years. The education gradient in smoking, the income gradient in consumption of fruit and vegetables and the education gradient in physical activity among males become smaller at older ages. Physical activity among females is the only lifestyle indicator in which the income and education gradients grow stronger at older ages. In conclusion, this study shows that income and education gradients in lifestyle choices may not remain constant, but vary with age, and such variation could be important in explaining corresponding age patterns of inequality in health.

Censored quantile regression and purchases of ice cream

Abstract Using Norwegian household data, we estimate the joint effects of increasing the value added tax (VAT) for less healthy food and removing the VAT for healthy food on purchases of ice cream and thereby weight outcomes. We estimate these effects with a censored quantile regression (CQR) model because about half the sample does not purchase ice cream and also because the probability of obesity is greater for heavy ice cream eaters. The CQR model allows for differing responses for high and low-purchasing households. We use an algorithm for the CQR which is simple, robust to a high degree of censoring, and performs well near the censoring point. In response to the VAT changes, we find that high-purchasing households would reduce their annual per capita purchases of ice cream by 1.8 kilograms, which corresponds ceteris paribus to an annual weight reduction of more than half a kilogram of body weight.

Labeling farmed seafood: A review

ABSTRACT Food labels help consumers choose products in line with their food attitudes and preferences. As the market for farmed seafood grows, it is important for producers to meet consumer demand for credence characteristics like safety, nutrition, origin, and sustainability. Consumer preferences for credence characteristics are heterogeneous, and stakeholders in the farmed seafood industry can look to both agriculture and marine labels when they seek ways of positioning their products. In this article, we conduct a review of consumer studies related to mandatory and voluntary labels used for farmed seafood. In most developed countries, mandatory seafood labels include information about species, farmed or wild, and area of origin. Voluntary labels include information regarding sustainability, organic production, animal welfare, traceability, and safety. We point to emerging research topics and possibilities. Challenges related to the labeling of farmed seafood are also discussed.

Test-Retesting in Experimental Valuation of Perishable Food Products: Unstable Individual Bids and Reliable Market Demand

One important property of a preference measure is its reliability. In this article, we explore the reliability of experimental auctions in measuring the market demand for five types of fish. We use the test†retest method to compare demand curves from two Becker–DeGroot–Marschak experiments with the same 116 participants conducted 7 months apart in time. The individual bids are not stable for these perishable products, but the distributions of the individual bids are stable. We find that the unsystematic individual variations cancel out in the aggregation of bids in a typical sample size for experimental valuation studies. Our results suggest that experimental auctions provide reliable market demand estimates even though the individual bids may change substantially over time.