Wen S. Chern

Property-Value Impacts of an Environmental Disamenity: The Case of Landfills

The purpose of this article is to quantify the property-value impacts of a change in environmental quality by using the hedonic price model. In particular, we focus on the impact of the presence of landfills on nearby residential real estate prices. We combine elements of an urban location choice and hedonic pricing model to estimate the effects of the presence of multiple environmental disamenities on residential real estate prices. We explicitly account for temporal effects by including housing transactions in areas with both open and closed landfills and control for information effects. In addition, we treat property taxes and prices as being simultaneously determined. Our analysis suggests that closing landfills will not necessarily mitigate property-value impacts.

Effects of rationing on the consumption behavior of Chinese urban households during 1981-1987

Abstract This paper investigates the impacts of housing, fuel, and food grain rationing on consumption behavior of Chinese urban households. Four versions of the Almost Ideal Demand System with different rationed goods were estimated using pooled time series for 1981–1987 and cross sectional data by income group from household expenditure surveys. The results show that rationing on housing and grain have had significant impacts on the demand for unrationed goods. If the current rationing system remains unchanged, Chinese urban households would continue to increase their demand for nonstaple food. This would yield a considerable pressure on food supply. Moreover, a reform in housing allocation and grain rationing would significantly reduce the distortion of consumer behavior in China.

Tomatoes, Technology, and Oligopsony

This paper draws on the theory of monopsony and oligopsony to develop an empirical test for the presence of the market power where an exogenous shock on the relevant market may be observed. An application of this test is demonstrated for the tomato processing industry, where the exogenous shock is created by the introduction of mechanical harvesting technology. The results are remarkably consistent with oligopsonistic dominant firm-price leadership. Statistical tests suggest rejection of the null hypothesis of competition.

Information, Health Risk Beliefs, and the Demand for Fats and Oils

Mean and variance measures of health information about cholesterol and saturated fat are included in a demand system for fats and oils. A Bayesian model of health risk belief and consumer awareness surveys are the basis for computing these measures. The empirical demand model shows that health information has resulted in significant increases in consumption for corn, cottonseed, and soybean oils and decreased consumption for butter and lard. The predicted demand effects based on the Bayesian information model are more reasonable than predictions from using either a time trend or a simple cumulative cholesterol information index. Copyright 1995 by MIT Press.

Flexible Demand Systems with Serially Correlated Errors: Fat and Oil Consumption in the United States

A flexible demand system proposed by Lewbel is used to estimate U.S. fat and oil demand from 1950 to 1986. Results suggest that the Lewbel model outperforms the Translog and AIDS and that correction for serial correlation is important. Findings also suggest that price and income effects, together with increasing public health concerns, primarily determine U.S. fat and oil demand.

Health, nutrition and food demand.

The results of several comparative studies on the impacts of health information on food consumption and behaviour amongst various socio-economic groups, are presented in this book. It also provides economic analysis of food demand estimations and predictions about future food systems.

Willingness to Pay for Genetically Modified Oil, Cornflakes, and Salmon: Evidence from a U.S. Telephone Survey

This paper reports results from a U.S. national telephone survey on genetically modified foods (vegetable oil, cornflakes, and salmon). The survey featured a contingent valuation in which respondents chose between the GM and non-GM alternatives with an option of indifference. The binomial and multinomial logit models yielded estimated willingness to pay (WTP) to avoid the GM alternatives. Respondents were willing to pay 20.9%, 14.8%, 28.4%, and 29.7% of the base prices to avoid GM vegetable oil, GM cornflakes, GM-fed salmon, and GM salmon, respectively. The inclusion of indifference option could increase the sample size and moderate the mean WTP.

Emerging markets for GM foods: an Indian perspective on consumer understanding and the willingness to pay

A random utility approach is used to estimate the logit equations which indicate what factors affect the likelihood of consumption of non-Genetically Modified (GM) and GM foods and whether or not consumers are willing to pay a premium for non-GM/GM foods. Ceteris paribus, as the price difference between non-GM and GM foods rises, people are more likely to consume GM foods. The likelihood of GM food consumption is higher in the middle income brackets. Consumers are willing to pay an expected premium of 19.5% and 16.12% for golden rice and GM edible oil, respectively. In the case of chicken, consumers seem to pay a very negligible premium for non-GM-fed chicken. Overall, it appears that GM foods may be acceptable in the Indian market. However, basic awareness about GM foods may have to be created among the consumers through government ministries, consumer interest groups and biotechnology food crop companies.

Consumer Acceptance of GMO: Survey Results from Japan, Norway, Taiwan, and the United States

The objective of this paper is to estimate the consumer willingness to pay (WTP) for genetically modified (GM) foods in Japan, Norway, Taiwan, and the U. S. There are notable differences in the attitudes and perception of GM foods across countries. Americans are more willing to consume GM foods than Norwegians, Japanese and Taiwanese. A majority of respondents in all surveys supports mandatory labeling of GM foods. The students in the U.S., Japan, Norway, and Taiwan are willing to pay premiums of 50-62%, 33-40%, 55-69%, and 17-21%, respectively, for non-GM vegetable oil. The WTP values for avoiding the GM alternatives indicate that the average Norwegian consumer demands price reductions of 55%, 54%, and 67% for GM soybean oil, GM-fed salmon, and GM salmon as compared with the conventional alternatives.

Structural changes in residential electricity demand

Abstract The purposes of this study are to investigate the structural changes in residential electricity demand parameters and explain the causes for such changes. A dynamic model is specified and estimated using pooled time-series and cross-section (state- level) data for the USA. Changes in demand parameters over time are examined by using successive, over-lapping ten-year sample periods for data from 1955–78 for parameter estimation. The results show that there have been significant structural changes in demand elasticities for several independent variables. These changes can be best explained by changes in household stocks of major electric appliances as new technologies have been developed, improved, and ingrained in consumer lifestyles and preference functions over time. Further inquiry shows no strong evidence of structural changes associated with either the reversal of the declining trend of electricity prices or the 1973 oil embargo. However, more data after the oil embargo may be needed to validate the existence of price asymmetries in electricity demand.