Notes on the Elasticity of Derived Demand

Bronfenbrenner, Martin

doi:10.1093/oxfordjournals.oep.a040871

Cited by 39 publications

(11 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…It is relevant for cigarette tax policy that the demand for smoking may be derived from the demand for weight loss. The Hicks–Marshall laws of derived demand (Marshall, ; Bronfenbrenner, ) state the conditions under which a derived demand will be relatively price inelastic: (i) the demand for the ultimate objective is relatively price inelastic; (ii) it is difficult to substitute for the input in the production of the objective; and (iii) expenditures on the input are a relatively small fraction of the total cost of the ultimate objective.…”

Section: Discussionmentioning

confidence: 99%

The Demand for Cigarettes as Derived from the Demand for Weight Loss: A Theoretical and Empirical Investigation

2014

View full text Add to dashboard Cite

This paper offers an economic model of smoking and body weight and provides new empirical evidence on the extent to which the demand for cigarettes is derived from the demand for weight loss. In the model, smoking causes weight loss in addition to having direct utility benefits and direct health consequences. It predicts that some individuals smoke for weight loss and that the practice is more common among those who consider themselves overweight and those who experience greater disutility from excess weight. We test these hypotheses using nationally representative data in which adolescents are directly asked whether they smoke to control their weight. We find that, among teenagers who smoke frequently, 46% of girls and 30% of boys are smoking in part to control their weight. As predicted by the model, this practice is significantly more common among those who describe themselves as too fat and among groups that tend to experience greater disutility from obesity. We conclude by discussing the implications of these findings for tax policy; specifically, the demand for cigarettes is less price elastic among those who smoke for weight loss, all else being equal. Public health efforts to reduce smoking initiation and encourage cessation may wish to design campaigns to alter the derived nature of cigarette demand, especially among adolescent girls.

show abstract

Section: Discussionmentioning

confidence: 99%

The Demand for Cigarettes as Derived from the Demand for Weight Loss: A Theoretical and Empirical Investigation

2014

View full text Add to dashboard Cite

show abstract

“…6 Also, 5 The hi values in Table 2 are larger than KM's total elasticities (Buse, 1958), but smaller than their Marshallian elasticities obtained from Bjørndal et al (1996). The reason for taking this middle ground is to compensate for the fixed-proportions assumption, which introduces inelasticity into the farm-level (derived) demand elasticity (Bronfenbrenner, 1961). A less elastic demand implies larger rents to advertising, ceteris paribus (Dorfman and Steiner, 1954).…”

Section: Parameterisationmentioning

confidence: 99%

The Relative Impact of the Norway‐EU Salmon Agreement: a Mid‐term Assessment

Kinnucan

Myrland

2002

J Agricultural Economics

View full text Add to dashboard Cite

“…(8a)) and A. the corresponding expression under perfect competition (see, e.g. Bronfenbrenner, 1961). Intuitively, for imperfect competition to reduce farmers' incentive to promote, as suggested by Zhang and Sexton's (2000) analysis, one would expect that A.'…”

Section: Market Power and The Derived Demand Elasticitymentioning

confidence: 99%

“…Relaxing this assumption complicates the analysis, but does not alter the basic idea that market power's effect on the derived demand elasticity is ambiguous when C5 > 0. The reason is related to Marshall's third law of derived demand as discussed by Bronfenbrenner (1961Bronfenbrenner ( , pp. 2561.…”

Section: Market Power and The Derived Demand Elasticitymentioning

confidence: 99%

Optimal generic advertising in an imperfectly competitive food industry with variable proportions^⋆

Kinnucan

2003

Agricultural Economics

View full text Add to dashboard Cite

This paper determines the impact of food industry market power on farmers' incentives to promote in a situation where funds for promotion are raised through a per‐unit assessment on farm output and food industry technology is characterized by variable proportions. Specifically, building on earlier studies by Azzam [Am. J. Agric. Econ. 80 (1998) 76] and Holloway [Am. J. Agric. Econ. 73 (1991) 979], Muth's [Oxford Econ. Papers 16 (1965) 221] model is extended to consider the farm‐level impacts of generic advertising when downstream firms possess oligopoly and/or oligopsony power and advertising expenditure is endogenous at the market level. Applying the model to the US beef industry, we find that for plausible parameter values market power reduces farmers' incentives to promote. However, the disincentive is moderated by factor substitution, and effectively vanishes as the factor substitution elasticity approaches the retail demand elasticity. This suggests that the Dorfman–Steiner theorem, suitably modified to account for factor substitution, suffices to indicate optimal advertising intensity in the US beef sector.

show abstract

Notes on the Elasticity of Derived Demand

Cited by 39 publications

References 0 publications

The Demand for Cigarettes as Derived from the Demand for Weight Loss: A Theoretical and Empirical Investigation

The Demand for Cigarettes as Derived from the Demand for Weight Loss: A Theoretical and Empirical Investigation

The Relative Impact of the Norway‐EU Salmon Agreement: a Mid‐term Assessment

Optimal generic advertising in an imperfectly competitive food industry with variable proportions^⋆

Contact Info

Product

Resources

About

Notes on the Elasticity of Derived Demand

Cited by 39 publications

References 0 publications

The Demand for Cigarettes as Derived from the Demand for Weight Loss: A Theoretical and Empirical Investigation

The Demand for Cigarettes as Derived from the Demand for Weight Loss: A Theoretical and Empirical Investigation

The Relative Impact of the Norway‐EU Salmon Agreement: a Mid‐term Assessment

Optimal generic advertising in an imperfectly competitive food industry with variable proportions⋆

Contact Info

Product

Resources

About

Optimal generic advertising in an imperfectly competitive food industry with variable proportions^⋆