A conceptual clarification of the sources and meaning of cross-sectional price variability is used to motivate a theoretical and econometric framework for the estimation of cross-sectional demand functions. Quality effects are distinguished from supply-related price variability to identify cross-sectional demand for disaggregated food commodities. An empirical application using data from the 1977-78 Nationwide Food Consumption Survey indicates that parameter differences resulting from a failure to adjust cross-sectional prices for quality effects are likely to be small for relatively homogenous, disaggregated food commodities. In demand analysis with cross-sectional, household budget data, it is usually assumed that prices are constant (Allen and Bowley, Prais and Houthakker, George and King). Given this assumption, Engel functions are estimated where expenditure (or quantity) is regressed on income (or total expenditures), family size, and other demographic characteristics. The assumption that cross-sectional price effects are absent or are captured adequately by spatial and temporal dummy variables has not been evaluated empirically. Whether cross-sectional price effects can be treated in this manner has implications for the specification of cross-sectional demand functions as well as the estimation of Engel functions. There is a considerable literature on estimating price elasticities with cross-sectional data. Most of the applications utilize timeseries/cross-sectional data. Annual (or quarterly) household consumption surveys and

https://agecon2.tamu.edu/people/faculty/capps-oral/agec%20635/Readings/Prices%20and%20Quality%20Effects%20in%20Cross-Sectional%20Demand%20Analysis.pdf

Prices and Quality Effects in Cross-Sectional Demand Analysis

An empirical study of 282 users of home computers was conducted to explore the relationship between computer use and shifts in time allocation patterns in the household. Major changes in time allocated to various activities were detected. Prior experience with computers (i.e., prior to purchase of the home computer) was found to have a significant impact on the time allocation patterns in the household. The study provides evidence that significant behavior changes can occur when people adopt personal computers in their homes.

Computing in the home: shifts in the time allocation patterns of households

The impacts of socioeconomic characteristics of the household and its constituents on consumption of protein, carbohydrate, fat, vitamin A, calcium, iron, thiamine, and vitamin C were estimated. Data from 6,950 households located in the contiguous states were utilized to specify consumption relationships. Socioeconomic factors considered were: income, degree of urbanization, race, educational attainment of the homemaker, stage of the household in the family life cycle, family size, meal adjustment, and employment status of the homemaker. Income had a positive impact on the consumption of all nutrients except carbohydrate. However, nutrient consumption responsiveness to income was relatively small.

Impact of Socioeconomic Factors on Consumption of Selected Food Nutrients in the United States

The study investigates factors associated with the individual intentions to change the family financial situation of 337 farm respondents. The hypotheses are that intentions to change are influenced by (a) resource flexibility or constraints existing at the time of the decision situation, including off-farm employment, education, age, and household size, and (b) perceptual factors of perceived income adequacy, locus of control, degree of discrepancy between standard and level of the family financial situation, and dissatisfaction or satisfaction with the discrepancy. Older respondents and those experiencing more external control are less likely to intend to change. Younger respondents and those who perceive their incomes as more adequate are more likely to perceive that they have control over their situation. The lower the perceived income adequacy, the greater the discrepancy between standard and level of the family financial situation and the lower the satisfaction with the discrepancy. Significant indirect effects were consistent with theoretical expectations.

The role of perception in the intention to change the family financial situation

National Park Service, U.S. Department of the Interior, and carried out by staff of the University of Alaska, Fairbanks.

M. Burk

Papers

Consumption economics: a multidisciplinary approach.