IDEAS home Printed from https://ideas.repec.org/p/ags/aaea13/149248.html
   My bibliography  Save this paper

Subsidizing Fruits and Vegetables by Income Group: A Two-Stage Budgeting Approach

Author

Listed:
  • Niu, Luyuan
  • Wohlgenant, Michael

Abstract

This paper investigates how a price subsidy affects demand for the three fruit and vegetable products for two income groups of households. This study combines the results of conditional elasticity estimates from previous study and develops a two-stage budgeting approach to estimate demand for fruits and vegetables using 1986-2010 quarterly CEX data. Precise stand errors are estimated by bootstrapping the entire two-stage estimation procedures. Results show that low-income households have larger total expenditure elasticities but smaller unconditional price elasticities than high-income households. Fruits and vegetables and all other goods are found to be net substitutes. Assuming that supplies for fruits and vegetable are perfectly elastic, a 10% price subsidy increases consumption of processed fruits and vegetables, fresh vegetables, and fresh fruits by 3.27% (10.68%), 3.29% (10.73%) and 3.50% (11.42%) for low-income (high-income) households, and only causes a small change in consumption of all other goods.

Suggested Citation

  • Niu, Luyuan & Wohlgenant, Michael, 2013. "Subsidizing Fruits and Vegetables by Income Group: A Two-Stage Budgeting Approach," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149248, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea13:149248
    DOI: 10.22004/ag.econ.149248
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/149248/files/Niu%20and%20Wohlgenant_2013_R2.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.149248?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ogundari, Kolawole & Arifalo, Sadiat Funmilayo, 2013. "Determinants of Household Demand for Fresh Fruit and Vegetable in Nigeria: A Double Hurdle Approach," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 52(3), pages 1-18, August.
    2. Tan, Andrew K. G. & Yen, Steven T. & Hasan, Abdul Rahman & Muhamed, Kamarudin, 2014. "Household Expenditures on Vegetables in Malaysia," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 46(4), pages 1-19, November.

    More about this item

    Keywords

    Agricultural and Food Policy; Consumer/Household Economics; Demand and Price Analysis; Food Consumption/Nutrition/Food Safety;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea13:149248. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.