Nonlinear Economic State Equilibria via van der Waals Modeling.

The renowned van der Waals (VDW) state equation quantifies the equilibrium relationship between the pressure P, volume V, and temperature kBT of a real gas. We assign new variable interpretations adapted to the economic context: P→Y, representing price; V→X, representing demand; and kBT→κ, representing income, to describe an economic state equilibrium. With this reinterpretation, the price elasticity of demand (PED) and the income elasticity of demand (YED) are non-constant factors and may exhibit a singularity of the cusp-catastrophe type. Within this economic framework, the counterpart of VDW liquid-gas phase transition illustrates a substitution mechanism where one product or service is replaced by an alternative substitute. The conceptual relevance of this reinterpretation is discussed qualitatively and quantitatively via several illustrations ranging from transport (carpooling), medical context (generic versus original medication), and empirical data drawn from the electricity market in Germany.

The relationship between the price and demand of alcohol, tobacco, unhealthy food, sugar-sweetened beverages, and gambling: an umbrella review of systematic reviews.

BACKGROUND: The WHO highlight alcohol, tobacco, unhealthy food, and sugar-sweetened beverage (SSB) taxes as one of the most effective policies for preventing and reducing the burden of non-communicable diseases. This umbrella review aimed to identify and summarise evidence from systematic reviews that report the relationship between price and demand or price and disease/death for alcohol, tobacco, unhealthy food, and SSBs. Given the recent recognition as gambling as a public health problem, we also included gambling. METHODS: The protocol for this umbrella review was pre-registered (PROSPERO CRD42023447429). Seven electronic databases were searched between 2000-2023. Eligible systematic reviews were those published in any country, including adults or children, and which quantitatively examined the relationship between alcohol, tobacco, gambling, unhealthy food, or SSB price/tax and demand (sales/consumption) or disease/death. Two researchers undertook screening, eligibility, data extraction, and risk of bias assessment using the ROBIS tool. RESULTS: We identified 50 reviews from 5,185 records, of which 31 reported on unhealthy food or SSBs, nine reported on tobacco, nine on alcohol, and one on multiple outcomes (alcohol, tobacco, unhealthy food, and SSBs). We did not identify any reviews on gambling. Higher prices were consistently associated with lower demand, notwithstanding variation in the size of effect across commodities or populations. Reductions in demand were large enough to be considered meaningful for policy. CONCLUSIONS: Increases in the price of alcohol, tobacco, unhealthy food, and SSBs are consistently associated with decreases in demand. Moreover, increasing taxes can be expected to increase tax revenue. There may be potential in joining up approaches to taxation across the harm-causing commodities.

Price elasticity of demand for cigarettes among youths in high-income countries: a systematic review.

Aims: Smoking in youth remains a major public health issue. As increasing tobacco prices is considered one of the most effective prevention strategies, examining youth's responsiveness to price changes on cigarettes will provide crucial knowledge. This study aims systematically to review research examining the price elasticity of demand for cigarettes among youths (<30 years of age) in high-income countries. Methods: Searches were conducted in three databases (Web of Science, Pubmed and Scopus). Inclusion criteria were publications within the past 10 years (2011-2021) written in English and with a population of youths below 30 years of age, concerning price elasticity of demand for cigarettes and from high-income countries. Searches were screened by two independent reviewers and the quality of studies was assessed using a quality assessment tool. Results: Four outcomes related to price elasticity of demand for cigarettes were examined in six studies included in this review; that is, cigarette initiation, consumption, prevalence and cessation. Overall, findings indicate that increasing tobacco prices affect youth tobacco use. The effect was associated with gender and age; young women were more price sensitive concerning smoking initiation, whereas young men were more price sensitive concerning cigarette prevalence and consumption. Moreover, younger age was associated with higher price elasticity. Conclusions: Estimates for price elasticity varied across the included studies. This may be caused by differences in data sources, collection methods used and country of origin. Most included studies were of older date. Therefore, to make reliable predictions of the expected effects of increased tobacco prices, further examinations of up-to-date and locally embedded measures are required.

Estimating consumer preferences for different beverages using the BLP approach.

The overconsumption of sugar is a significant problem in many jurisdictions, and one possible method to remedy this problem is the taxation of sugar-sweetened beverages (SSBs). To be able to implement an optimal tax, it is important to know the preferences and price sensitivity of consumers. This article therefore estimates the price elasticity of demand for different beverages in Quebec, using the Berry, Levinsohn and Pakes (BLP) random parameter logistic demand model, combined with Nielsen data from 2010 to 2016 and the 2016 Canadian Census. The results suggest that the average consumer prefers high-calorie beverages containing fruits and vegetables, and the estimated price elasticities are between -4.40 (energy drinks) and -1.59 (regular soft drinks). As a result, consumers of energy drinks appear to reduce their consumption the most in the face of rising prices, whereas consumers of soft drinks will decrease their consumption the least. However, at a general level, the implementation of a tax on SSBs in Quebec should generate a significant reduction in consumption.

The impact of environmental regulation on firm performance: Evidence from the Chinese cement industry.

The relationship between environmental regulation and firm performance is a central question in environmental economics. Although many empirical works study this question, economists have not reached a consensus on the nature of the relationship or the mechanism that drives it. Based on the off-peak production policy in the Chinese cement market, this paper uses the differences-in-differences model to study the impact of environmental regulation on the revenue and profit of listed companies. We find that the environmental regulation has negative impacts on firms' revenue and profit. According to further analysis, the main reason for this firm performance decline is that the relatively large elasticity of market demand prevents enterprises from passing regulatory costs through to consumers. Although the policy has caused the cement price to increase by 8%, it has led cement consumption to decrease by 16%.

Price Elasticity Of Demand And The Impact Of Taxing Sugar-Sweetened Beverages In Malaysia

@#The Malaysian government implemented an excise tax of MYR 0.40 per L on sugar-sweetened beverages in July 2019. Excise tax is imposed on sweetened drinks containing more than 5 g of sugar per 100 ml, flavoured Ultra High Temperature milk-based drinks, and fruit juices with more than 7 g and 12 g of sugar per 100 ml, respectively. We analysed the impact of excise tax on the consumption of SSBs by developing a demand model for SSBs to estimate the elasticity of demand using a two-way fixed-effect model. The tax increased the price of 1 L SSBs by 8.33%, and we estimated it to decrease the consumption of SSBs by 9.25%. The estimated own-price elasticity of demand for SSBs was −1.11 (95% CI: −1.97 to −0.25). Price of SSB is a determinant for SSB demand, but income or the price of milk are not. The estimated excise revenue calculated was MYR 357.61 million. However, industry responses via product reformulation and pass-through rates could reduce revenue and enhance or reduce health impacts.

Estimating the price elasticity of demand for JUUL E-cigarettes among teens.

BACKGROUND: The widespread popularity of e-cigarettes, particularly JUUL, has led to an alarming increase in teen nicotine use, reversing a 40-year trend. One key question is how sensitive teens' demand for JUUL is to changes in price. METHODS: We estimate the price elasticity of demand using results from an experimental auction where teen nicotine users and nonusers bid on a JUUL kit. RESULTS: We find that a 10 % increase in price leads to as much as a 24 % reduction in JUUL demand among teens using nicotine, and as much as a 45 % reduction among teens not currently using nicotine. The teens in our study were more price sensitive than older adults who took part in a similar earlier study. CONCLUSIONS: From a public health standpoint, these are promising results. High e-cigarette taxes may dissuade relatively few older adult cigarette smokers from switching to e-cigarettes, but at the same time be highly effective at preventing teens from becoming e-cigarette users in the first place.

China's online parrot trade: Generation length and body mass determine sales volume via price.

The wildlife trade threatens global biodiversity and animal welfare, where parrots are among the taxa most frequently traded, supplying exotic pets and captive breeders worldwide. Using phylogenetic path analysis, we examine how biological factors interact with price to influence online protected parrot trade volumes in China, using transactions recorded for 46 species (n = 5862 individuals). Trade was greatest in smaller, faster breeding species that commanded a lower price. This price effect followed the economic law of demand, with Relatively Inelastic Demand (-0.758), outweighing indicators of 'quality' such as body coloration, and conservation status. We identify two areas of concern: those larger, slower-breeding, rarer species, even though sold at lower numbers, may be at conservation risk if harvested from the wild. In contrast, the sheer numbers (over 90% of the individuals were under median generation length, body mass and/or price) and ready availability of smaller and more common species comprises a substantial overall animal welfare issue, given that the capture, importation, or captive breeding of many parrot species in China is illegal and thus unregulated. Our investigation highlights the importance of properly understanding the internal relations among drivers of wildlife trade to inform appropriate management.

The law of demand and the loss of confidence effect: An experimental study.

The aim of this article is to examine the possibility that a market demand function (curve) might not be monotonically decreasing in its entire domain according to the consumer theory neoclassical as assumed by the law of demand (for normal goods). This may happen due to limited rationality of (some) consumers and the anchor price effect. When a price of a good decreases to some point, the amount demanded might stops increasing due to the loss of confidence effect: consumers' unwillingness to buy a too cheap product. The existence of this effect was examined via questionnaire on a sample of 377 undergraduate university students from the Czech Republic, Ecuador and Spain. The main result of this experimental study is that the loss of confidence effect appeared at all three locations, which indicates that the law of demand may not be valid in its entire domain. Furthermore, the results of this study imply that a significant percentage of people make decisions of limited rationality even when facing a very simple task. In addition, statistically significant difference in rational behavior with respect to gender was found.

Impact of khat price increases on consumption behavior - price elasticity analysis.

BACKGROUND: The long border of Saudi Arabia with Yemen is the primary route for khat entry to the Kingdom. As of April 2015, the government of SA tightened the border, making it more difficult to import khat into the country. As a result, local user prices of khat probably increased due in part to higher supply costs and perhaps lower quantities. One anti-drug strategy is to increase consumption cost by increasing the price of supply. We aim in this study to measure the responsiveness of khat demand to price changes. METHODS: This study used a cross-sectional survey design. Two stage sampling was used to recruit 350 khat chewers from four selected primary healthcare centers in Jazan province (South western province of Saudi Arabia). The data were collected during the first quarter of 2017. This study used both contingent valuation and revealed preference methods to assess the impact of price increases on the purchasing of khat. Graphical analysis, paired-samples t-test, and one-way repeated measures analysis of variance (ANOVA) were used to assess the impact of price increases on khat consumption. RESULTS: The study results showed a significant decrease in khat consumption amount (t = 8.63, p ≤ 0.05), frequency (t = 30.42, p ≤ 0.05), and expenditure (t = 34.67, p ≤ 0.05) after the tightening of the Saudi-Yemeni border. Hence khat demand is price elastic. The price elasticity of khat demand in Jazan is estimated to be between - 2.38 and - 1.07. Therefore, each 1% increase in price is associated with 1-2% reduction in quantity demanded. This means khat chewers are relatively responsive to price changes (i.e., khat demand is price elastic). Repeated measures analysis of variance showed price increases significantly affect the quantity {F(4, 2.58) = 257, p ≤ 0.05, ηp2 = 0.423} and frequency {F(4, 1.83) = 415, p ≤ 0.05, ηp2 = 0.543} of khat chewing. CONCLUSIONS: Increased prices for khat would significantly decrease demand. Accordingly, we recommend implementing law enforcement strategies focused on disrupting the khat supply chain to realize high prices and so discourage use, hence reducing the incidence of khat-related illnesses.

Price elasticity of demand for psychiatric consultation in a Nigerian psychiatric service.

OBJECTIVE: This paper addresses price elasticity of demand (PED) in a region where most patients make payments for consultations out of pocket. PED is a measure of the responsiveness of the quantity demanded of goods or services to changes in price. The study was done in the context of an outpatient psychiatric clinic in a sub -Saharan African country. METHODS: The study was performed at the University College Hospital (UCH), Ibadan, Nigeria. Aggregate data were collected on weekly clinic attendance over a 24-month period October 2008 - September 2010 representing 12 months before, to 12months after a 67% increase in price of outpatient psychiatric consultation. The average weekly clinic attendance prior to the increase was compared to the average clinic attendance after the price increase. Arc-PED for consultation was also estimated. RESULTS: Clinic attendance dropped immediately and significantly in the weeks following the price increase. There was a 34.4% reduction in average weekly clinic attendance. Arc-PED for psychiatric consultation was -0.85. CONCLUSION: In comparison to reported PED on health care goods and services, this study finds a relatively high PED in psychiatric consultation following an increase in price of user fees of psychiatric consultation.

Price Elasticities of Food Demand: Compensated vs Uncompensated.

Two recent studies have provided a comprehensive review/summary of a large number of estimates of the price elasticity of food consumption using a meta-regression approach. In this letter, we introduce a way of removing the income effect from these elasticities to recover the compensated elasticities. Although the income effect is small, the compensated elasticities vary by income group. Both types of elasticity should possibly be considered when assessing the impact of policy changes on food consumption. Copyright © 2015 John Wiley & Sons, Ltd.

Why Changes in Price Matter When Thinking About Marijuana Policy: A Review of the Literature on the Elasticity of Demand.

Recent debates regarding liberalization of marijuana policies often rest on assumptions regarding the extent to which such policy changes would lead to a change in marijuana consumption and by whom. This paper reviews the economics literature assessing the responsiveness of consumption to changes in price and enforcement risk and explicitly considers how this responsiveness varies by different user groups. In doing so, it demonstrates how most of the research has examined responsiveness to prevalence of use, which is a composite of different user groups, rather than level of consumption among regular or heavy users, which represent the largest share of total quantities consumed. Thus, it is not possible to generate reliable estimates of the impact of liberalizing policies on either tax revenues or harms, as these outcomes are most directly influenced by the amounts consumed by regular or heavy users, not prevalence rates.

Analyze the Drug Elasticity of Demand of Urban Residents through ELES Model / 中国药房

OBJECTIVE:To analyze drug elasticity of demand of urban residents with quantitation.METHODS:Expand linear expenditure system(ELES)model was used to analyze sectional data of different kinds of consumption expenditure and the disposable income of urban residents in2003and to calculate the value of marginal consumption tendency,the elasticity value of demand income and the demand price.RESULTS&CONCLUSIONS:The changes of drugs price have little influence on drugs demand,for urban residents,drugs consumption belongs to necessary for life.

An Empirical Analysis of Price Elasticity of the Demand for Medical Care Services in Korean National Health Insurance Program / 예방의학회지

This paper tested by using Micro TSP, an empirical econometric analysis to approve officially a hypothesis of price elasticity of the demand for medical care services in Korean national medical insurance and the economic effect of health care delivery system with time-series datas of Medical Insurance statistical yearbook(1981-1993). The results suggest that the korean medical insurance system shows moral hazard due to the change of coinsurance and the economic effect according to intervention of the health care delivery system, but it is different by insurers regardless of the same structure of the medical insurance scheme.