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Economic techniques to estimate the demand for sustainable products: a case study for fair trade and organic coffee in the United Kingdom

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Author Info
Galarraga, Ibon
Markandya, Anil

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Abstract

The hedonic approach is used in this paper to estimate how much is paid for the fair trade/organic characteristic of the coffee in the British market. This information is later combined with the Quantity Based Demand System (QBDS) model -developed by the authors- and the Almost Ideal Demand System (AIDS) (Deaton and Muellbauer, 1980) to completely determine the demand function for different coffees. The QBDS model is easier to handle and less data demanding than the AIDS model in this study. Resumen El presente artículo se basa en la utilización del método hedónico para la estimación de la cantidad que se paga por la característica de "Orgánico/Comercio Justo" del café en el mercado británico. La información obtenida se combina después con el modelo Sistema de Demanda Basado en Cantidades (QBDS) - desarrollado por los autores- y el Sistema de Demanda Casi Ideal (AIDS) (Deaton and Muellbauer, 1980) para determinar por completo la función de demanda de los diferentes tipos de café. El modelo QBDS es más sencillo en su utilización y necesita de menos datos que el modelo AIDS. Palabras clave: sistemas de demanda, método hedónico, demanda de café, etiquetado

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Publisher Info
Article provided by Spanish Association of Agricultural Economists in its journal Economia Agraria y Recursos Naturales.

Volume (Year): 4 (2004)
Issue (Month): 7 ()
Pages:
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Handle: RePEc:ags:earnsa:28732

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Related research
Keywords: demand systems; hedonic method; coffee demand; labelling; C13; C21; D12;

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References listed on IDEAS
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  1. Stanley, Linda R & Tschirhart, John, 1991. "Hedonic Prices for a Nondurable Good: The Case of Breakfast Cereals," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 537-41, August. [Downloadable!] (restricted)
  2. Combris, Pierre & Lecocq, Sebastien & Visser, Michael, 1997. "Estimation for a Hedonic Price Equation for Bordeaux Wine: Does Quality Matter?," Economic Journal, Royal Economic Society, vol. 107(441), pages 390-402, March. [Downloadable!] (restricted)
  3. Okunade, Albert A, 1992. "Functional Forms and Habit Effects in the U.S. Demand for Coffee," Applied Economics, Taylor and Francis Journals, vol. 24(11), pages 1203-12, November.
  4. Freeman, A Myrick, III, 1979. " Hedonic Prices, Property Values and Measuring Environmental Benefits: A Survey of the Issues," Scandinavian Journal of Economics, Blackwell Publishing, vol. 81(2), pages 154-73.
  5. Ibon Galarraga & Anil Markandya, 2003. "The analysis of welfare effects of an environmental product tax: an application to the taxation of car tyres in Hungary," Fiscal Studies, Institute for Fiscal Studies, vol. 24(1), pages 97-114, March.
  6. Nimon, Wesley & Beghin, John, 1999. "Are Eco-Labels Valuable? Evidence from the Apparel Industry," Staff General Research Papers 1514, Iowa State University, Department of Economics. [Downloadable!]
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  7. Wellman, Katharine F, 1992. "The U.S. Retail Demand for Fish Products: An Application of the Almost Ideal Demand System," Applied Economics, Taylor and Francis Journals, vol. 24(4), pages 445-57, April.
  8. Cropper, Maureen L & Deck, Leland B & McConnell, Kenneth E, 1988. "On the Choice of Functional Form for Hedonic Price Functions," The Review of Economics and Statistics, MIT Press, vol. 70(4), pages 668-75, November. [Downloadable!] (restricted)
  9. Palmquist, Raymond B, 1984. "Estimating the Demand for the Characteristics of Housing," The Review of Economics and Statistics, MIT Press, vol. 66(3), pages 394-404, August. [Downloadable!] (restricted)
  10. Anderson, Gordon & Blundell, Richard, 1983. "Testing Restrictions in a Flexible Dynamic Demand System: An Application to Consumers' Expenditure in Canada," Review of Economic Studies, Blackwell Publishing, vol. 50(3), pages 397-410, July. [Downloadable!] (restricted)
  11. Nerlove, Marc, 1995. "Hedonic price functions and the measurement of preferences: The case of Swedish wine consumers," European Economic Review, Elsevier, vol. 39(9), pages 1697-1716, December. [Downloadable!] (restricted)
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