Time-varying coefficients in the almost ideal demand system: An empirical appraisal

This paper provides a generalisation of the structural time series version of the Almost Ideal Demand System (AIDS) that allows for time-varying coefficients (TVC/AIDS) in the presence of cross-equation constraints. An empirical appraisal of the TVC/AIDS is made using a dynamic AIDS with trending intercept as the baseline model with a data set from the Italian Household Budget Survey (1986-2001). The assessment is based on four criteria: adherence to theoretical constraints, statistical diagnostics on residuals, forecasting performance and economic meaningfulness. No clear evidence is found for superior performance of the TVC/AIDS, apart from improved short-term forecasts.

Testing symmetry and homogeneity in the almost ideal demand system with co-integrated data using fully modified estimation and the bootstrap

Conventional seemingly unrelated estimation of the almost ideal demand system is shown to lead to small sample bias and distortions in the size of a Wald test for symmetry and homogeneity when the data are co-integrated. A fully modified estimator is developed in an attempt to remedy these problems. It is shown that this estimator reduces the small sample bias but fails to eliminate the size distortion.. Bootstrapping is shown to be ineffective as a method of removing small sample bias in both the conventional and fully modified estimators. Bootstrapping is effective, however, as a method of removing. size distortion and performs equally well in this respect with both estimators.

The demand for a healthy diet: estimating the almost ideal demand system with infrequency of purchase

A Bayesian method of estimating multivariate sample selection models is introduced and applied to the estimation of a demand system for food in the UK to account for censoring arising from infrequency of purchase. We show how it is possible to impose identifying restrictions on the sample selection equations and that, unlike a maximum likelihood framework, the imposition of adding up at both latent and observed levels is straightforward. Our results emphasise the role played by low incomes and socio-economic circumstances in leading to poor diets and also indicate that the presence of children in a household has a negative impact on dietary quality.

Time patterns in UK demand for alcohol and tobacco: an application of the EM algorithm

Capturing the pattern of structural change is a relevant task in applied demand analysis, as consumer preferences may vary significantly over time. Filtering and smoothing techniques have recently played an increasingly relevant role. A dynamic Almost Ideal Demand System with random walk parameters is estimated in order to detect modifications in consumer habits and preferences, as well as changes in the behavioural response to prices and income. Systemwise estimation, consistent with the underlying constraints from economic theory, is achieved through the EM algorithm. The proposed model is applied to UK aggregate consumption of alcohol and tobacco, using quarterly data from 1963 to 2003. Increased alcohol consumption is explained by a preference shift, addictive behaviour and a lower price elasticity. The dynamic and time-varying specification is consistent with the theoretical requirements imposed at each sample point. (c) 2005 Elsevier B.V. All rights reserved.

A refined LEED analysis of water on Ru{0001}: an experimental test of the partial dissociation model

Despite a number of earlier studies which seemed to confirm molecular adsorption of water on close-packed surfaces of late transition metals, new controversy has arisen over a recent theoretical work by Feibelman, according to which partial dissociation occurs on the Ru{0001} surface leading to a mixed (H2O + OH + H) superstructure. Here, we present a refined LEED-IV analysis of the (root3 x root3)R30degrees-D2O-Ru{0001} structure, testing explicitly this new model by Feibelman. Our results favour the model proposed earlier by Held and Menzel assuming intact water molecules with almost coplanar oxygen atoms and out-of-plane hydrogen atoms atop the slightly higher oxygen atoms. The partially dissociated model with an almost identical arrangement of oxygen atoms can, however, not unambiguously be excluded, especially when the single hydrogen atoms are not present in the surface unit cell. In contrast to the earlier LEED-IV analysis, we can, however, clearly exclude a buckled geometry of oxygen atoms.

The prediction of Northern Hemisphere tropical cyclone extended life cycles by the ECMWF Ensemble and Deterministic Prediction Systems. Part I: tropical cyclone stage

This study has explored the prediction errors of tropical cyclones (TCs) in the European Centre for Medium-Range Weather Forecasts (ECMWF) Ensemble Prediction System (EPS) for the Northern Hemisphere summer period for five recent years. Results for the EPS are contrasted with those for the higher-resolution deterministic forecasts. Various metrics of location and intensity errors are considered and contrasted for verification based on IBTrACS and the numerical weather prediction (NWP) analysis (NWPa). Motivated by the aim of exploring extended TC life cycles, location and intensity measures are introduced based on lower-tropospheric vorticity, which is contrasted with traditional verification metrics. Results show that location errors are almost identical when verified against IBTrACS or the NWPa. However, intensity in the form of the mean sea level pressure (MSLP) minima and 10-m wind speed maxima is significantly underpredicted relative to IBTrACS. Using the NWPa for verification results in much better consistency between the different intensity error metrics and indicates that the lower-tropospheric vorticity provides a good indication of vortex strength, with error results showing similar relationships to those based on MSLP and 10-m wind speeds for the different forecast types. The interannual variation in forecast errors are discussed in relation to changes in the forecast and NWPa system and variations in forecast errors between different ocean basins are discussed in terms of the propagation characteristics of the TCs.

Quantifying the effect of buffer zones, crop areas and spatial aggregation on the externalities of genetically modified crops at landscape level

The development of genetically modified (GM) crops has led the European Union (EU) to put forward the concept of 'coexistence' to give fanners the freedom to plant both conventional and GM varieties. Should a premium for non-GM varieties emerge in the market, 'contamination' by GM pollen would generate a negative externality to conventional growers. It is therefore important to assess the effect of different 'policy variables'on the magnitude of the externality to identify suitable policies to manage coexistence. In this paper, taking GM herbicide tolerant oilseed rape as a model crop, we start from the model developed in Ceddia et al. [Ceddia, M.G., Bartlett, M., Perrings, C., 2007. Landscape gene flow, coexistence and threshold effect: the case of genetically modified herbicide tolerant oilseed rape (Brassica napus). Ecol. Modell. 205, pp. 169-180] use a Monte Carlo experiment to generate data and then estimate the effect of the number of GM and conventional fields, width of buffer areas and the degree of spatial aggregation (i.e. the 'policy variables') on the magnitude of the externality at the landscape level. To represent realistic conditions in agricultural production, we assume that detection of GM material in conventional produce might occur at the field level (no grain mixing occurs) or at the silos level (where grain mixing from different fields in the landscape occurs). In the former case, the magnitude of the externality will depend on the number of conventional fields with average transgenic presence above a certain threshold. In the latter case, the magnitude of the externality will depend on whether the average transgenic presence across all conventional fields exceeds the threshold. In order to quantify the effect of the relevant' policy variables', we compute the marginal effects and the elasticities. Our results show that when relying on marginal effects to assess the impact of the different 'policy variables', spatial aggregation is far more important when transgenic material is detected at field level, corroborating previous research. However, when elasticity is used, the effectiveness of spatial aggregation in reducing the externality is almost identical whether detection occurs at field level or at silos level. Our results show also that the area planted with GM is the most important 'policy variable' in affecting the externality to conventional growers and that buffer areas on conventional fields are more effective than those on GM fields. The implications of the results for the coexistence policies in the EU are discussed. (C) 2008 Elsevier B.V. All rights reserved.

A structural time series approach to modelling multiple and resurgent meat scares in Italy

This paper exploits a structural time series approach to model the time pattern of multiple and resurgent food scares and their direct and cross-product impacts on consumer response. A structural time series Almost Ideal Demand System (STS-AIDS) is embedded in a vector error correction framework to allow for dynamic effects (VEC-STS-AIDS). Italian aggregate household data on meat demand is used to assess the time-varying impact of a resurgent BSE crisis (1996 and 2000) and the 1999 Dioxin crisis. The VEC-STS-AIDS model monitors the short-run impacts and performs satisfactorily in terms of residuals diagnostics, overcoming the major problems encountered by the customary vector error correction approach.

Consumer welfare and the loss induced by withholding information: The case of BSE in Italy

The paper develops a measure of consumer welfare losses associated with withholding it formation about a possible link between BSE and vCJD. The Cost of Ignorance (COI) is measured by comparing the utility of the informed choice with the utility of the uninformed choice, under conditions of improved information. Unlike previous work that is largely based on a single equation demand model, the measure is obtained retrieving a cost,function from a dynamic Almost Ideal Demand System. The estimated perceived loss for Italian consumers due to delayed information ranges from 12 percent to 54 percent of total meat expenditure, depending on the month assumed to embody correct beliefs about the safety level of beef.

Predicting the arrival of high-speed solar wind streams at Earth using the STEREO Heliospheric Imagers

High-speed solar wind streams modify the Earth's geomagnetic environment, perturbing the ionosphere, modulating the flux of cosmic rays into the Earth atmosphere, and triggering substorms. Such activity can affect modern technological systems. To investigate the potential for predicting the arrival of such streams at Earth, images taken by the Heliospheric Imager (HI) on the STEREO-A spacecraft have been used to identify the onsets of high-speed solar wind streams from observations of regions of increased plasma concentrations associated with corotating interaction regions, or CIRs. In order to confirm that these transients were indeed associated with CIRs and to study their average properties, arrival times predicted from the HI images were used in a superposed epoch analysis to confirm their identity in near-Earth solar wind data obtained by the Advanced Composition Explorer (ACE) spacecraft and to observe their influence on a number of salient geophysical parameters. The results are almost identical to those of a parallel superposed epoch analysis that used the onset times of the high-speed streams derived from east/west deflections in the ACE measurements of solar wind speed to predict the arrival of such streams at Earth, assuming they corotated with the Sun with a period of 27 days. Repeating the superposed epoch analysis using restricted data sets demonstrates that this technique can provide a timely prediction of the arrival of CIRs at least 1 day ahead of their arrival at Earth and that such advanced warning can be provided from a spacecraft placed 40° ahead of Earth in its orbit.

The effects of a soft drink tax in the UK

The majority of the UK population is either overweight or obese. Health economists, nutritionists and doctors are calling for the UK to follow the example of other European countries and introduce a tax on soft drinks as a result of the perception that high intakes contribute to diet-related disease. We use a demand model estimated with household-level data on beverage purchases in the UK to investigate the effects of a tax on soft drink consumption. The model is a Quadratic Almost Ideal Demand System, and censoring is handled by applying a double hurdle. Separate models are estimated for low, moderate and high consumers to allow for a differential impact on consumption between these groups. Applying different hypothetical tax rates, we conclude that understanding the nature of substitute/complement relationships is crucial in designing an effective policy as these relationships differ between consumers depending on their consumption level. The overall impact of a soft drink tax on calorie consumption is likely to be small.

Effect of breadmaking process on In Vitro gut microbiota parameters in irritable bowel syndrome

A variety of foods have been implicated in symptoms of patients with Irritable Bowel Syndrome (IBS) but wheat products are most frequently cited by patients as a trigger. Our aim was to investigate the effects of breads, which were fermented for different lengths of time, on the colonic microbiota using in vitro batch culture experiments. A set of in vitro anaerobic culture systems were run over a period of 24 h using faeces from 3 different IBS donors (Rome Criteria–mainly constipated) and 3 healthy donors. Changes in gut microbiota during a time course were identified by fluorescence in situ hybridisation (FISH), whilst the small -molecular weight metabolomic profile was determined by NMR analysis. Gas production was separately investigated in non pH-controlled, 36 h batch culture experiments. Numbers of bifidobacteria were higher in healthy subjects compared to IBS donors. In addition, the healthy donors showed a significant increase in bifidobacteria (P<0.005) after 8 h of fermentation of a bread produced using a sourdough process (type C) compared to breads produced with commercial yeasted dough (type B) and no time fermentation (Chorleywood Breadmaking process) (type A). A significant decrease of δ-Proteobacteria and most Gemmatimonadetes species was observed after 24 h fermentation of type C bread in both IBS and healthy donors. In general, IBS donors showed higher rates of gas production compared to healthy donors. Rates of gas production for type A and conventional long fermentation (type B) breads were almost identical in IBS and healthy donors. Sourdough bread produced significantly lower cumulative gas after 15 h fermentation as compared to type A and B breads in IBS donors but not in the healthy controls. In conclusion, breads fermented by the traditional long fermentation and sourdough are less likely to lead to IBS symptoms compared to bread made using the Chorleywood Breadmaking Process.

Simulating the impact on health of internalising the cost of carbon in food prices combined with a tax on sugar-sweetened beverages

Rising greenhouse gas emissions (GHGEs) have implications for health and up to 30 % of emissions globally are thought to arise from agriculture. Synergies exist between diets low in GHGEs and health however some foods have the opposite relationship, such as sugar production being a relatively low source of GHGEs. In order to address this and to further characterise a healthy sustainable diet, we model the effect on UK non-communicable disease mortality and GHGEs of internalising the social cost of carbon into the price of food alongside a 20 % tax on sugar sweetened beverages (SSBs). Developing previously published work, we simulate four tax scenarios: (A) a GHGEs tax of £2.86/tonne of CO2 equivalents (tCO2e)/100 g product on all products with emissions greater than the mean across all food groups (0.36 kgCO2e/100 g); (B) scenario A but with subsidies on foods with emissions lower than 0.36 kgCO2e/100 g such that the effect is revenue neutral; (C) scenario A but with a 20 % sales tax on SSBs; (D) scenario B but with a 20 % sales tax on SSBs. An almost ideal demand system is used to estimate price elasticities and a comparative risk assessment model is used to estimate changes to non-communicable disease mortality. We estimate that scenario A would lead to 300 deaths delayed or averted, 18,900 ktCO2e fewer GHGEs, and £3.0 billion tax revenue; scenario B, 90 deaths delayed or averted and 17,100 ktCO2e fewer GHGEs; scenario C, 1,200 deaths delayed or averted, 18,500 ktCO2e fewer GHGEs, and £3.4 billion revenue; and scenario D, 2,000 deaths delayed or averted and 16,500 ktCO2e fewer GHGEs. Deaths averted are mainly due to increased fibre and reduced fat consumption; a SSB tax reduces SSB and sugar consumption. Incorporating the social cost of carbon into the price of food has the potential to improve health, reduce GHGEs, and raise revenue. The simple addition of a tax on SSBs can mitigate negative health consequences arising from sugar being low in GHGEs. Further conflicts remain, including increased consumption of unhealthy foods such as cakes and nutrients such as salt.

Abrupt climate change: ice sheets and oceans in action

Large temperature variations on land, in the air, and at the ocean surface, and highly variable flux of ice-rafted debris (IRD) delivered to the North Atlantic Ocean show that rapid climate fluctuations took place during the last glacial period. These quasi-periodic, high-amplitude climate variations followed a sequence of events recognized as a rapid warming, followed by a phase of gradual cooling, and terminating with more rapid cooling and increased flux of IRD to the north Atlantic Ocean. Each cycle lasted ˜1500 years, and was followed by an almost identical sequence. These cycles are referred to as Dansgaard/Oechger cycles (D/O cycles), and approximately every fourth cycle culminated in a more pronounced cooling with a massive discharge of IRD into the north Atlantic Ocean over an interval of ˜500 years. These massive discharges of IRD are known as Heinrich layers. “Heinrich events” are thus characterized as a rapid transfer of IRD from a “source,” the bed of the Laurentide Ice Sheet (LIS), to a “sink,” the North Atlantic.