Some curiosites about the Engel method to estimate equivalence scales

This paper lends legitimacy to the food share as an indicator of welfare by demonstrating the conditions necessary in empirical work for the Engel method of estimating equivalence scales to provide an exact measure of welfare. In analogy to a money metric of utility, the Engel's food share is shown to be a “quantity metric of utility.”Engel method

Counterfactual analysis using a regional dynamic general equilibrium model with historical calibration

This paper develops a regional dynamic general equilibrium model calibrated using two regional SAMs for the Italian region Valle D’Aosta for the years 1963 and 2002. A historical calibration procedure is performed over the 40 years period and a validation exercise ensures that the modelled tendencies closely approximate the actual observed growth patterns of the main regional macroeconomic variables. The dynamic general equilibrium model provides an original and powerful tool for historical counterfactual analysis not available using standard dynamic general equilibrium models. The model is used to compare the growth path followed by the region during the period of interest with different scenarios intended to rank the social desirability of alternative behaviours of the regional administration.historical calibration, historical validation, regional dynamic general equilibrium model, historical counterfactual analysis

EXPLORING ALTERNATIVES FOR ESTIMATING SYSTEMS OF EQUATIONS WITH MULTIPLE CENSORED VARIABLES: FARM OUTPUT SUPPLY AND INPUT DEMAND

This paper explores two alternatives for estimating systems of equations with multiple censored variables: Maximum Simulated Likelihood and a two-step technique that seems to be well suited for large samples. The empirical part of the paper estimates a system of cost, cost shares and revenue shares equations of Italian farms using both approaches.Research Methods/ Statistical Methods,

The Collective Household Enterprise Model: An Empirical Analysis

This paper estimates a household model where both the production and consumption sides are observed. The household activities produce both marketable and nonmarketable products. Family members consume market goods, domestically produced goods and leisure. This household equilibrium model is described within a collective framework. The data are from a nation-wide sample of Italian farm-households. The estimation is implemented using a generalized Heckman estimator to account for corner solutions generated by the fact that not all households are engaged in all enterpreneurial activities and do not consume some of all goods and leisure. The identification of the sharing rule stems from the assignability of clothing consumption and leisure.Household collective model, household and domestic productions, consumption and leisure, separability, Consumer/Household Economics,

Extension of the Traditional Travel Cost Method to a Collective Framework: An Empirical Application

This study proposes a novel approach to estimating a travel cost model that accounts for intrahousehold resource allocation. We define it ‘Collective Travel Cost Method’ (CTCM). The technique is based on an analogy borrowed from the literature of collective household behavior and adapted to the recreational setting. Knowledge of the travel cost to the recreational site of each household member allows us to identify the sharing rule within the household and to estimate a collective Almost Ideal Demand System that takes into account the role of each member’s preferences for consumption choices and how resources are allocated within the household. We show how to identify and estimate welfare measures, such as the equivalent variation (EV), to infer the Willingness-To-Pay (WTP) to access a natural park of each household member. Moreover, the development and estimation of the CTCM allows: (1) to test whether the WTP estimated by the traditional unitary TCM is significantly different from the WTP estimated by the CTCM; (2) to test whether two spouses have equal or different WTP to access the recreational site, and (3) whether the individual WTP estimated by the CTCM is significantly different from the WTP derived by applying the Contingent Valuation Method (CVM) on the same sample of individuals.collective model, compensating variation, equivalent variation, revealed preferences, travel cost method, Willingness-To-Pay.

A multi-regional general equilibrium model to assess policy effects at regional level

In this paper we develop a multi-regional general equilibrium model (MEG-R) to compare the social desirability of the CAP reform in the three Italian macro-regions: North, Center and South. The model employs a mixed complementary framework that allows for the decision of not producing a particular crop in one or more regions and presents an attempt to model interregional trade flows. The model incorporates the links between production and consumption that characterize farm household’s behavior and allows for heterogeneous household responses across regions. Results show a general tendency to reallocations from cereal crops to forage that appear more severe in the South. In this region, the reduction in crops cannot be translated into an effective expansion of fodder and could lead to the “deactivation” of the land.Multi regional general equilibrium model, farm households, interregional trade., Agribusiness, Agricultural and Food Policy, Community/Rural/Urban Development, Food Consumption/Nutrition/Food Safety, Labor and Human Capital,

Primal-Dual Estimation of a Linear Expenditure Demand System

Efficient estimates require the utilization of all the available theoretical and statistical information. This fact suggests that econometric models based on an explicit optimization theory might achieve more efficient estimates when all the primal and dual relations are used for a joint estimation of the model’s parameters. We present a discussion of this idea using a Linear Expenditure System (LES) of consumer demand. We assume that the risk-neutral household chooses its consumption plan on the basis of expected information. Some time after that decision, the econometrician attempts to measure quantities and prices and in so doing commits measurement errors. Hence, the econometric model is an errors-in-variables nonlinear system of equations for which there is no known consistent estimator. We propose an easy-to-implement estimator and analyze its empirical properties by a Monte Carlo simulation that shows a relatively small bias.Consumer demand functions, primal-dual, linear expenditure system, Demand and Price Analysis, Research Methods/ Statistical Methods, D0,

New Results On Censored Regression with Applications to Transactions Costs, Household Decisions and Food Purchases

We generalize the Tobit censored regression to permit unique unobserved censoring thresholds conditioned by covariates and a set of common response coefficients. This situation , we argue, is one arising frequently in applications of censored regression and we provide three diverse examples to motivate the theory. We derive a robust estimation algorithm with three noteworthy features. First, by augmenting the observed-data likelihood with the censored observations, the estimation strategy is the same as Chib (1992) who derives Bayes estimates of the conventional censored regression. Second, by virtue of its generality, the model is applicable to a much broader set of circumstances than the conventional Tobit regression, which is nested as a special case of the more general framework. Third, despite its generality and wide applicability, the estimation algorithm is very simple, evidencing routine application of Markov chain Monte Carlo methods (MCMC)-Gibbs sampling in particular- and requiring only modest extensions of the basic algorithm in Chib (1992). The model and procedures are illustrated empirically in three applications that we use to motivate the theory, namely problems in transactions-costs economics, household decision-making and food-consumption.conditionally censored Tobit regression, Bayes inference, Food Consumption/Nutrition/Food Safety, O11, C34, O13,

The passive drinking effect: Evidence from Italy

This paper investigates whether consumption of alcoholic beverages affects distribution of resources among household members. We refer to this effect, highlighting the negative impact that alcohol addicted individuals can have on other household members wellbeing. To investigate this issue we rely on the collective framework and estimate a structural collective demand system. Our results show that for Italian households a high level of alcohol consumption influences the allocation of resources in favour of the husband, with a larger effect in poor households. This evidence implies that alcohol consumption is not only an individual problem. Public costs that are transferred to the other household members should be taken into account when designing social policies.Cet article étudie si la consommation de boissons alcoolisées affecte la distribution des ressources entre les membres du ménage. Nous nous référons à cet effet comme le Passive Drinking Effect, en mettant en évidence l'impact négatif que des individus dépendant de l'alcool peuvent avoir sur le bien-être des autres membres de la famille. Pour répondre à cette question nous nous appuyons sur le modèle collectif et on estime un système structurelle de demande de consommation. Nos résultats montrent que, pour les foyers italiens un niveau élevé de consommation d'alcool influe sur la répartition des ressources en faveur du mari, avec un effet plus grand pour les ménages pauvres. Cette évidence implique que la consommation d'alcool n'est pas seulement un problème individuel: les coûts publics qui sont transférés aux autres membres du ménage doivent être pris en compte dans le cadre des politiques sociales