Browsing by Author "Clements, Kenneth W"

Now showing 1 - 4 of 4
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    Comparing international consumption patterns
    (2022) Clements, Kenneth W; Wu, Yanrui; Zhang, Jing
    When attempting to identify empirical regularities in consumption patterns, their tremendous diversity across countries represents both a major opportunity and challenges, for example, consumers in rich countries devote less than 20 percent of their budget to food, while this rise to more than 50 percent in the poorest countries. This paper uses a major new database released in Selvanathan and Selvanathan (2003) to explore several related issues, including the extent to which the consumption basket is diversified and how this changes with income, whether a simple utility-maximizing model is capable of explaining the diversity of consumption patterns internationally, the measurement of the extent to which tastes differ across countries, and how the world can be partitioned into groups of countries with minimal within-group heterogeneity of tastes on the basis of the revealed preference of consumers.
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    The demand for vice inter-commodity interactions with uncertainty
    (2022) Clements, Kenneth W; Lan, Yihui; Zhao, Xueyan
    This paper introduces a simulation procedure in the context of a demand system for vice-marijuana, tobacco and alcohol- to formally account for the inherent uncertainty in marijuana related data and parameters. This entails using existing econometric estimates pertaining to the consumption of alcohol and tobacco, and the much more limited information on marijuana . As an illustrative application of the frame work, we simulate the impact on the consumption of vice of a reduction in the price of marijuana; changes in per-existing taxes on tobacco and alcohol; legalization of marijuana, which is then subject to taxation; and a tax tradeoff involving the introduction of a revenue-neutral tax on marijuana that is offset by reduced alcohol taxation. The revenue-maximizing tax rate of about 50percent is estimated to yield additional revenue of about 15 percent of the per-existing proceeds from vice taxation. The role of uncertainty surrounding preference interactions within vice, as well as the uncertainties regarding marijuana data, is highlighted by providing the whole distribution of each endogenous cariable
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    Economic aspects of marijuana
    (2005-11) Zhao, Xueyan; Clements, Kenneth W
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    The economics of global consumption patterns
    (2022) Clements, Kenneth W; Qiang, Ye
    Henri Theil devoted a good deal of the last two decades of this professional activities to the analysis of international consumption patterns. He had the bold idea of using a single system of demand equations to explain the variability of consumption patterns across widely diverse countries. In view of the tremendous variability of consumption across countries (as an example the proportion of the budget devoted to food is above 50 percent in the poorest countries, while it is in the vicinity of 10 percent in the richest), this was an ambitious undertaking. To implement the idea, Theil used the ICP data to estimate a cross-country system of demand equations under the assumption that tastes were the same internationally. While this is quite acceptable at Chicago where tastes are an immutable constant, others could find the assumption more controversial. This paper commences with a review of Theil's path-breaking research on demand analysis, including cross-country applications and then investigates in some detail two important issues first, we analyses the extent to which differences in incomes and prices explain international consumption patterns; and second we provide new imperial evidence regarding the extent to which tastes are similar internationally. The paper also contains an evaluation of another important building block of Theil's work in this area that of the assumption of preference independence, whereby there are no interactions between goods in the utility function.