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Consumer Welfare Effects of Quantity Changes in Demand

Published online by Cambridge University Press:  26 January 2015

Kuo S. Huang
Kuo S. Huang*
Affiliation:
Economic Research Service (ERS), U.S. Department of Agriculture (USDA), Washington, DC
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Extract

Information about consumer welfare effects associated with quantity changes in demand is important for agricultural and food policy decision-makers because many policy options are directly related to controlling supplies as a means to stabilize or raise commodity prices and farmers' income. A new method is developed to measure the consumer welfare effects by using the estimates of an inverse demand system and a modified quantity-adjusted Malmquist index to represent the efficiency in quantity metric welfare. The methodology is validated by applying it to a U.S. inverse food demand system consisting of 13 food groups and a nonfood sector.

Keywords

consumer welfareinverse demand systemMalmquist quantity indexD12
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 45 , Issue 2 , May 2013 , pp. 217 - 227
Copyright
Copyright © Southern Agricultural Economics Association 2013

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