Nicholas E. Piggott

Spatial Market Integration in the Presence of Threshold Effects

Threshold cointegration models are used to evaluate spatial price dynamics among regional corn and soybean markets in North Carolina. Thresholds, reflecting the influences of transactions costs, are confirmed and spatial integration is strongly supported. Results indicate that equilibrating adjustments to market shocks are generally complete in two weeks.

Demand Response to Advertising in the Australian Meat Industry

The implications of model specification choices for the measurement of demand response to advertising are examined using Australian data. Single-equation models versus complete systems and alternative corrections for autocorrelation are evaluated. Competing advertising efforts by two producer bodies are included. Across all specifications, the evidence on advertising effects is fairly consistent. In the preferred model, the only statistically significant effects of advertising are for Australian Meat and Livestock Corporation advertising (of beef and lamb) on the demand for beef (positive) and on the demand for chicken (negative). Australian Pork Corporation advertising does not have any statistically significant effects. Copyright 1996, Oxford University Press.

Incorporating demand shifters in the Almost Ideal demand system

Abstract Intercepts of share equations generally include demand shift variables. In the Almost Ideal demand system and related models, this results in estimates that depend on units of measurement. Solutions to this problem are identified and discussed.

Approximating Farm-Level Returns to Incremental Advertising Expenditure: Methods and an Application to the Australian Meat Industry

Equilibrium displacement modeling is used to analyze the effects of incremental advertising expenditure by the Australian beef, lamb, and pork industries in domestic and export markets. The effects on prices, quantities traded, revenues, producer surpluses, and profits net of advertising expenditure are reported. Cross-commodity impacts of advertising are highlighted, including how one industry has to adjust its advertising expenditure to preserve profit levels in the face of increased advertising by another industry. The procedures used are useful when decisions about advertising expenditure need to be made quickly.

Asymmetry in beef, lamb and pork farm-retail price transmission in Australia

The hypothesis of asymmetry in price transmission within the Australian meat market is tested using monthly data for beef, lamb and pork prices at different market levels over the period 1971-1988. The results indicate that asymmetrical price response is a strategy used by beef and lamb retailers and wholesalers to adjust to changing input prices, but not by pork retailers and wholesalers. This difference is perhaps unexpected given the similarity in behaviours relating to price levelling in this market, the high cross-price elasticities of demand between these meats, and the relatively greater degree of concentration in the pork market.

The Value of Non-Pecuniary Characteristics of Crop Biotechnologies: A New Look at the Evidence

In this chapter we examine the non-pecuniary aspects of the earliest crop biotechnologies. We analyze the stated values of the non-pecuniary aspects, taken from three farm-level surveys. We focus particularly on the phenomenon of part-whole bias, which is the empirical finding that the sum of the stated part-worths (the value of each non-pecuniary characteristic) is greater than the stated total value of all the non-pecuniary characteristics. We analyze the empirical evidence of part-whole bias in the surveys, while decomposing it to further understand the phenomenon and to rescale the stated values of the non-pecuniary characteristics in the surveys. We find for all three surveys that the degree to which part-worths should be rescaled is about 60 percent.

The Nested PIGLOG Model: An Application to U.S. Food Demand

A new demand system is introduced, the Nested PIGLOG model, nesting thirteen other demand systems including five that are also new. This new model and its nested special cases are applied to models of U.S. food demand that include food-at-home (FAH), food-away-from-home (FAFH), and alcoholic beverages. Although nested tests and out-of-sample forecasting performance favor generalizing models to a certain degree, statistically insignificant improvements to in-sample-fit and even poorer out-of-sample forecast accuracy undermine further generalizations. Based on a subset of preferred models, FAFH is found to be price and income elastic compared to FAH which is price and income inelastic. Copyright 2003, Oxford University Press.

The Incidence of the Costs and Benefits of Generic Advertising

Generic advertising is important and controversial. In 1990, commodity organizations in the United States spent over

Estimating and testing the compensated double-log demand model

300 million on advertising (Lenz, Forker, and Hurst). The controversy over generic advertising is reflected in recent court cases, such as the 1996 Wileman case heard before the U.S. Supreme Court. Controversy over generic advertising also exists within the agricultural economics profession. A wide range of results can be found in past studies, partly because of different data sets and commodities, but also because of particular modeling choices. In this paper, we discuss some issues in studies of the demand

Spatiotemporal Modeling of Asian Citrus Canker Risks: Implications for Insurance and Indemnification Fund Models

In spite of the proliferation of flexible functional forms for consumer demand systems, the double-log demand model continues to be popular, especially in applied work calling for single-equation models. It is usually estimated in uncompensated form. It can also be estimated in compensated form, by deflating the income variable alone using Stones price index. The compensated form has the same right-hand side as a single-equation version of the popular linear approximation to the Almost Ideal demand model, facilitating the construction of a test for choosing between the two alternatives. This paper demonstrates these results, develops the specification test, and illustrates its application using US meat consumption data. Simulations suggest that the test is well-behaved with good power in typical applications.