An Analysis of Taste Variety within Households on Soft Drinks

Food Consumption/Nutrition/Food Safety,

Analysis of Multiple Discrete-Continuous Choices: Empirical Evidence of Biased Price Elasticities under Standard Discrete Choice models on the Soft Drink Market

The New Empirical Industrial Organization (NEIO) literature allows to analyze competition, market power and welfare implications of public policies. This literature is based on the estimation of consumer substitution patterns, that is on the estimation of demand models. Standard discrete choice models are commonly used and assume that the consumer chooses only one unit of a single alternative. However, panelists are often shoppers making decisions for the entire household. A household is composed of several persons with various tastes. The current NEIO literature then often omits multiple brand choice and quantity choice of a product representing multiple tastes within the household. To tackle this point, we model multiple discrete/continuous choices of households following Bhat (2005a). Moreover, we deal with observed and unobserved household heterogeneity as well as omitted variable problem that occurs in this type of consumer choice model. Using French purchase data on the Soft Drink Market, we show that consumer substitution patterns could be biased if multiple brand and quantity choices are not taken into account. Indeed, our results suggest that own price elasticities could be significantly underestimated

Analysis of Multiple Discrete-Continuous Choices: Empirical Evidence of Biased Price Elasticities under Standard Discrete Choice models on the Soft Drink Market

The New Empirical Industrial Organization (NEIO) literature allows to analyze competition, market power and welfare implications of public policies. This literature is based on the estimation of consumer substitution patterns, that is on the estimation of demand models. Standard discrete choice models are commonly used and assume that the consumer chooses only one unit of a single alternative. However, panelists are often shoppers making decisions for the entire household. A household is composed of several persons with various tastes. The current NEIO literature then often omits multiple brand choice and quantity choice of a product representing multiple tastes within the household. To tackle this point, we model multiple discrete/continuous choices of households following Bhat (2005a). Moreover, we deal with observed and unobserved household heterogeneity as well as omitted variable problem that occurs in this type of consumer choice model. Using French purchase data on the Soft Drink Market, we show that consumer substitution patterns could be biased if multiple brand and quantity choices are not taken into account. Indeed, our results suggest that own price elasticities could be significantly underestimated

ARE FRUIT AND VEGETABLE STAMP POLICIES COST-EFFECTIVE?

In many countries, consumption of fruits and vegetables (F&V) is below recommended levels. We quantify the economic and health effects of F&V stamp policy designed for low income consumers. The analysis combined two models: an economic model which predicts how F&V consumption is affected by a change in policy and a health model which evaluates the impact of a change in F&V consumption in terms of death avoided (DA) and life-years saved (LYS). Finally we computed the costs per DA and LYS as the ratio between the taxpayer cost of the policy and the number of DA and LYS. The main findings of the present study are: (1) F&V stamp policy has a positive and significant impact on the consumption of small F&V consumers of the targeted population, (2) at the aggregate level, this policy has a modest impact on consumption and as a result on health gains, (3) for a given budget allocated to the policy, the cost per DA or LYS decreases when the targeting is smaller, at least as long as consumption remains in plausible values, (4) the policy reduces the health inequalities between low and high income populations, (5) when well designed, F&V stamp policy is as cost-effective as price policy (about 42 k€/LYS).Cost-effectiveness analysis, Fruits and Vegetables, Health Impact Assessment, Health Policy, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Health Economics and Policy, D61, I18, Q18,

One Man, One Vote Part 2: Measurement of Malapportionment and Disproportionality and the Lorenz Curve

The main objective of this paper is to explore and estimate the departure from the “One Man, One Vote” principle in the context of political representation and its consequences for distributive politics. To proceed to the measurement of the inequalities in the representation of territories (geographical under/over representation) or opinions/parties (ideological under/over representation), we import (with some important qualifications and adjustments) the Lorenz curve which is an important tool in the economics of income distribution. We consider subsequently some malapportionment and disproportionality indices. It is applied to the 2010 Electoral College and the French parliamentary and local elections with a special attention to the electoral reform of 2015. In these applications, the Lorenz curve ordering is almost conclusive and consequently the Gini and DK indices are aligned and complement the almost complete ranking derived from Lorenz

One Man, One Vote Part 2: Measurement of Malapportionment and Disproportionality and the Lorenz Curve

The main objective of this paper is to explore and estimate the departure from the “One Man, One Vote” principle in the context of political representation and its consequences for distributive politics. To proceed to the measurement of the inequalities in the representation of territories (geographical under/over representation) or opinions/parties (ideological under/over representation), we import (with some important qualifications and adjustments) the Lorenz curve which is an important tool in the economics of income distribution. We consider subsequently some malapportionment and disproportionality indices. It is applied to the 2010 Electoral College and the French parliamentary and local elections with a special attention to the electoral reform of 2015. In these applications, the Lorenz curve ordering is almost conclusive and consequently the Gini and DK indices are aligned and complement the almost complete ranking derived from Lorenz

Market Size and Pharmaceutical Innovation

This paper quantifies the relationship between market size and innovation in the pharmaceutical industry using improved, and newer, methods and data. We find positive significant elasticities of innovation to expected market size with a point estimate under our preferred specification of 0.23. This suggests that, on average, $2.5 billion is required in additional revenue to support the invention of one new chemical entity. This magnitude is plausible given recent accounting estimates of the cost of innovation of 800 million to one billion per drug, and marginal costs of manufacture and distribution near 50%. An elasticity below 1 is also a plausible implication of the hypothesis that innovation in pharmaceuticals is becoming more difficult over time, as costs of regulatory approval rise and as the industry runs out of "low-hanging fruit"

Market Size and Pharmaceutical Innovation

This paper quantifies the relationship between market size and innovation in the pharmaceutical industry using improved, and newer, methods and data. We find positive significant elasticities of innovation to expected market size with a point estimate under our preferred specification of 0.23. This suggests that, on average, $2.5 billion is required in additional revenue to support the invention of one new chemical entity. This magnitude is plausible given recent accounting estimates of the cost of innovation of 800 million to one billion per drug, and marginal costs of manufacture and distribution near 50%. An elasticity below 1 is also a plausible implication of the hypothesis that innovation in pharmaceuticals is becoming more difficult over time, as costs of regulatory approval rise and as the industry runs out of "low-hanging fruit"