13,962 research outputs found

    Disaggregated welfare effects of agricultural price policies in urban Indonesia

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    This paper presents a theoretically consistent methodology that could be used to measure changes in different income groups' welfare level caused by alternative price policies. The paper details the basic stages of the methodology: classification of households in income groups, estimation of demand systems for each income group, and measurement of welfare changes using compensating variation measures. The methodology was applied to data related to expenditure and socioeconomic characteristics of Indonesian Urban households. A simulation analysis measuring the welfare changes under different pricing scenarios showed that the welfare of the low-income households was affected most by increases in the prices of rice and fish

    Estimating demand for food commodities by income groups in Indonesia

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    An analysis of the structure of demand was performed on household data, classified into income groups for urban Indonesia. A demographically augmented Linearized Almost Ideal Demand System was used to estimate the structural parameters of the demand equations. Endogenous switching regressions techniques yielded unbiased and consistent demand parameter estimates for the low income group, which had a large number of zeros for some food groups. Standard seemingly unrelated equation techniques were used to estimate the demand parameters for the other income groups. The results showed demands for the medium-high and high income households to be responsive to prices, income and demographic variables. Demands for the medium-low income households were responsive to income and prices only. Demands for lowincome households were responsive to income and prices of rice and fish only