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Showing 4 results for Almost Ideal Demand System

Meysam Musai, Malihe Shiani,
Volume 6, Issue 25 (7-2007)
Abstract

Objective: The demand and consumtion of cultural products in Iran including movies and going to cinema will rise in future because average economic growth rate in recent years in Iran has been 5 present and this means the demand for going to cinema will rise in future and since government protects movie making and distribution in Iran and pay them benefits or independenty act in this area, the studay of factors influencing household demand and income and price elasticities, and price of related products will help policy makers to respond to increasing demand for cinema and provide facilities and conditions to meet futurer demands. Method: In this article we use the Almost Ideal Demand System, proposed by Deaton and Muellbauer (1980) to estimate household demand for cinema. The main reason why Almost Ideal Demand System is used is for its simplicity which enable researchers to test homogencity or heterogenity restrictions and symmetries. The provinces under study are: 1- Booshehr 2- Kohgilooyeh va Boyrahmad 3- ChaharMahalo Bakhtiary 4- Isfahan 5- Ilam 6- Fars 7- Ghazvin 8- Gilan 9- Hamedan 10- Hormozgan 11- Kerman 12- Kerinanshah 13- Khorasan, 14- Kurdistan 15- Lorestan 16- Markazi 17- Mazandaran 18- Semnan 19- Sistan 20- Tehran 21- Yazd 22- Zanjan 23- Eastern Azerbaijan 24- Western Azerbaijan. Finding: In this article the demand functions for going to cinema, in different provinces, are estimated, based on the statistics and data pertaining to household expenditures. Considering different formulas of price and income elasticity, the price and income elasticity calculated for all different provinces. According to the obtained resultants, with exception of Isfahan, Hormozgan, Kerman, Kurdistan, Mazandaran and Eastern Azerbaijan, the price elasticity is less than one, which means demand is not sensitive to the price variations. The same elasticity for the entire country is -0.91 which is the almost equal to one and shows low elasticity of the commodity in household consumption. The amount of the elasticity shows that in case of a 100% increase in the ticket price for cinema, keeping other factors constant, demand for going to cinema would be decreased by 91 percent. Cross elasticity of price for journals and cinema in 9 provinces of Kohgilooyeh va Boyrahmad, Chahar Mahalo Bakhtiary, Isfahan, Ilam, Fars, Gilan, Hamedan, Yazd and Zanjan are negative, which means these two commodities could substitute each other in consumption. But, in other provinces the elasticity is positive that means these two commodities complement each other in consumption. The important point is that in both states the absolute value of the elasticity is very small and almost zero that means the relation between journals and cinema is very weak. The same elasticity for the entire country is -0.12 that means in the country, in general, two commodities of cinema and journals substitute each other in consumption. In fact, if the journal price is increased by 100%, the demand for cinema is reduced by 11%. Crossed elasticity of price between book and cinema, in every province, is negative. This means in all the provinces these two commodities substitute for each other. This elasticity for provinces of Chaharmahalo Bakhtiary, Isfahan, Fars, Gilan, Hamedan, Kurdistan, Lorestan, Tehran and Zanjan is more than other provinces. The amount of the cross elasticity between the two commodities in demand function of cinema in the entire country is almost -47% that shows if book price increases by 100% and all other factor are kept constant, demand for cinema will decrease by 47%. In other words these two goods are complementary in consumption. The income elasticity in each of the provinces is positive it is between zero and one. The income elasticity expresses the degree of sensitivity of demand in proportion to variations in household income. The amount of income elasticity for this commodity in the entire country is equal to 0.57 that means if income of a household increases by 100%, demand for this commodity would increase by 57%. On this basis, this is a necessary commodity and if the household income increases, the expenditures for cinema would increase by a lesser amount. Result: Noting income elasticity of household demand for cinema and the average growth rate in recent years ahead, it is forcasted that the following income rise of about 2.1 times, (170 percent growth of incomes), demand for cinema will rise 96.9 percent (about 2 times) in fact, if government and policy makers want to meet this increase in demand, it is necessery to develop and increase cinemas and related facilities and conditions.


T. Akhoondzadeh, H. Raghfar, Sh. Shirinbakhsh,
Volume 10, Issue 36 (4-2010)
Abstract

  Objectives: This paper estimates the energy demand systems in transportation and housing sectors in Iran over the period 1997-2006. Then, ignoring energy subsidies, calculates the changes in social welfare.

  Method: This paper uses Almost Ideal Demand System (AIDS) and

  compensating variation (CV) for estimating the energy demand systems and calculating the changes in social welfare in terms of ignoring energy subsidies and increasing energy prices up to the level of international prices (shadow prices) respectively.

  Findings: The share of energy expenditures from total expenditures in

  transportation sector for middle deciles is higher and for richer deciles is less than other deciles. In housing sector, whenever the level of welfare increases, this share decreases.

Results: The results show that, the variance of energy in energy basket, may decrease the amount of compensating variation, and as a whole compensating variation of richer expenditure deciles are greater.
H. Mohammadi, G. Norouzi,
Volume 10, Issue 39 (1-2011)
Abstract

Objective: The demand structure for five commodity groups including foods and drinks, clothing, housing, health and recreation, and educational services was analyzed based on the time series data of the household consumption expenditures during period 1966-2007. Method: A linear approximation of almost ideal demand system (LA/AIDS) was estimated by SURE method in order to obtain demand function and elasticity. Finding: Income elasticity for all the groups were positive and more than one excepted for educational services. Furthermore, all of the own-price elasticities were negative and theoretically consistent. Conclusion: Cross price elasticities estimates indicated that health and educational services are substitutes for foods but housing and clothing are complement for it.
Zeinab Vaez Mahdavi, Hosein Raghfar, Karim Emami, Kamran Haji Nabi,
Volume 21, Issue 81 (8-2021)
Abstract

 
Inrtoduction: Macroeconomic instability, exchange rate volatility, high inflation and consequently rising food price have been critical issues in recent years in Iran’s economy. Policy inefficiencies, policy inconsistency, and food price fluctuations have affected vulnerable households and low-income groups and increased food poverty, undernourishment and malnutrition. The study of income and price elasticities of food items, especially in different income groups, provides valuable information for policy making.
Method: This research, using the approach of the almost ideal demand system, studies the elasticity of food items in the household consumption budget for 2016 and 2018 and compares different income groups. The household income and expenditure from raw household survey data for the years 2016 and 2018. Due to the heterogeneous impact of price changes on demand in different income groups, the study was conducted on different income quantiles. In this respect, we focused on meat, bread, and dairy item.
Findings: Results show that bread is identified as an inelastic good and dairy and meat as elastic goods for low-income groups. The results of quantile analysis show that in 2018, bread was a Giffen good for the first quantile and necessary good for the third and the fifth.
Discussion: The results indicate that the consumption of animal protein and dairy products is highly sensitive to the price of these goods. An increase in the price of these goods will limit the consumption of these micronutrients in the household food basket or possibly eliminate it in the low-income groups.

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