NationalChungChengUniversity國立中正大學
Institute of International Economics國際經濟研究所
Empirical Microeconomics (個體經濟實證分析)
Autumn, 2010
Instructor:Class Number, Time and Place:
Dr. Wen S. ChernCourse Number: 5105701
Room 506, College of ManagementClass Number: 01
Phone: 05-272-0411 ext.34168Monday, 9:10 – 12:00, Periods 3-5
E-Mail: om 332, College of Management
Office Hours:16:30- 17:30 p.m., Monday or by appointment
Course Objectives:The course deals with applications of microeconomic theory of consumption and consumer behavior. One important goal of this course is to train graduate students to develop research skills and data analysis on applied microeconomics. After completing the course, students are expected to:
1.Understand the neoclassical theory of consumer demand and its application.
2.Know the properties of a demand system and how to specify and estimate a demand model with real world data.
3.Develop skills in using consumer survey data for demand analysis.
4.Understand the new theories based on Gary Becker’s household production function and Kevin Lancaster’s characteristics model.
5.Be able to estimate Probit and Logit models.
6.Know the contingent valuation method and experimental auction.
7.Learn how to estimate a linear expenditure system and an AIDS model.
8.Be familiar with food consumption patterns in Taiwan, China and the U.S.and various models analyzing them.
9.Know current consumption issues related to food and health.
Term Paper:A term paper is required for the course. Students may select a topic involving consumer behavior in the marketplace, explanation of consumption patterns, demand estimation, problem related to food consumption, or the economics of consumer protection. The paper should be written as a well reasoned essay with theoretical and/or empirical evidence. All sources and references should be cited in the text and bibliography. The paper should be typed, double-spaced and no longer than 10 pages excluding tables, graphs and references. Students will have an opportunity to present their papers orally to the class by the end of the term.
Homework:There will be several homework assignments. Most assignments require a short essay paper (3-4 pages,typed and double spaced). A common database will be provided to all students for use in the homework.
Oral Presentations:Three oral presentations are required: (1-2) literature reviews presented by groups during the semester, (3) presentation of the term paper by the end of the semester.
Computer:Students are expected to know how to use a spreadsheet package (Excel) to analyze the common database. Regression can be performed using Eview, SAS,Limdep or Stata.
Grading:Homework=20%
MidtermExamination=20%
Final Examination=25%
Term Paper=25%
Oral Presentations=10%
Note:Homework late submission policy: Inform the instructor if you can not meet the deadline; 5% off a day up to three days; no late submission after 3 days.
Academic
Misconduct:Plagiarism and other forms of cheating will not be tolerated. University rules provide severe penalties for academic misconduct, ranging from course failure to dismissal from the university.
Disability:Any student who feels s/he may need an accommodation based on the impact of a disability should contact the instructor privately to discuss your specific needs.
Important Dates:
MidtermExamination:November 15, 2010
Final Examination:January 17, 2011
Term Paper due:January14, 2011
Outlines and Reading Materials
References:There is no textbook for this course. The main reference books are listed below:
- Angus Deaton and John Muellbauer, Economics of Consumer Behavior, CambridgeUniversity Press, 1980.
- Gary S. Becker, The Economic Approach to Human Behavior, Chicago: The University of Chicago Press, 1976.
- Kelvin Lancaster, Modern Consumer Theory, Brook, Vermont: Edward Elgar Publishing Co., 1991.
- David Colman and Trevor Young, Principles of Agricultural Economics, CambridgeUniversity Press, 1989.
- Wen S. Chern and Kyrre Rickertsen, Health, Nutrition and Food Demand, CABI Publishing, 2003.
- Peter Earl and Simon Kemp, The Elgar Companion to Consumer Research and Economic Psychology, Edward Elgar Publishing, 1999.
Note: Most of these books have been put on reserve in our main library.
Lecture Topics and Readings:The astray * indicates a required reading. All reading materials (journal articles) are placed on the course website.
Topic 1:U. S. Food Consumption Trends and Review of Neoclassical Theory of Consumer Behavior
Readings:
1.Colman and Young, Chapter 5.
*2.Lancaster, Chapter 1.
*3. Rosanna Mentzer Morrison, Jean C. Buzby and Hodan Farah Wells, “Guess Who’s Turning 100? Tracking a Century of American Eating,”Amber Waves, Vol. 8, Issue 1, March 2010.
4.Stacey Rosen and Shahla Shapouri, “Obesity in the Midst Unyielding food Insecurity in Developing countries,”Amber Waves, Volume 6, issue 4, September 2008.
5.Lisa Mancino, Biing-Hwan Lin, and Nicole Ballenger, The Role of Economics in Eating Choices and Weight Outcomes, UDSA, Agricultural Information Bulletin No. 791, September 2004.
*6.Fred Kuchler, Elise Golan, Jayachandran N. Variyam, and Stephen R. Crutchfield, “Obesity Policy and the Law of Unintended Consequences,” Amber Waves, ERS, USDA, Vol. 3, Issue 3, June 2005.
*7.Christopher G. Davis and Biing-Hwan Lin, Factors Affecting U.S. Beef Consumption. USDA, ERS Report, LDP-M-135-02, October 2005.
Topic2:Properties of Demand Functions
Readings:
*1.Deaton and Muellbauer, Chapter 1, pp. 15-16.
*2.Colman and Young, Chapter 6 (pp.105-107)
Topic3:Linear Expenditure System (LES)
Readings:
*1.Deaton and Mullbauer, Chapter 3.
2.Wen S. Chern and Guijing Wang, “The Engel Function and Complete Food Demand System for Chinese Urban Households,” China Economic Review, Vol. 5, No. 1, 1994
Topic 4:Becker’s Household Production Model
Readings:
*1.Becker, Chapters 5, 6, 7.
2.Colman and Young, Chapter 7.
*3.G. S. Becker, "A Theory of the Allocation of Time," The Economic Journal, 75: 493-517, September 1965.
Topic5:Consumer Discrete Choice Models
Readings:
*1.Robert S. Pindyck and Daniel L. Rubinfeld, Econometric Models and Economic Forecasts, New York: McGraw-Hill Book Company, 1998. pp.
2.John F. McDonald and Robert A. Moffitt, “The Uses of Tobit Analysis,” The Review of Economics and Statistics, Vol. 62, No. 2, 1980.
- A. Saha, O. Capps and P. Byrne, “Calculating Marginal Effects in Dichotomous continuous Models,” Applied Economics letters, Vol. 4. 1997.
*4.Earl and Kemp, pp. 156-164.
Topic6:Demand for Food and Demand for Health
Readings:
*1.M. Grossman, “On the Concept of Health Capital and Demand for Health,” Journal of Political Economy, 80: 223-255, 1972.
*2Wen S. Chern, Kimiko Ishibashi, and Kiyodhi Taniguchi, and Yuki Tokoyama, Analysis of the Food Consumption of Japanese Households, FAO Economic and Social Development Paper 152, Rome 2003.
*3.Vicki A. McCracken and Jon A. Brandt, "Time Value and Its Impact on Household Food Expenditures Away from Home," Home Economics Research Journal, Vol. 18, No. 4, June 1990.
*4.Rodolfo M. Nayga, “Wife’s Labor Force Participation and Family Expenditures for Prepared Food, Food Prepared at Home, and Food Away from Home,” Agricultural and Resource Economics Review, October 1996.
*5.Justo Manrique and Helen Jensen, “Working Women and Expenditures on Food Away-From-Home and At-Home in Spain,” Journal of Agricultural Economics, Vol. 49, No. 3, September, 1998.
*6.P. Byrne, O. Capps, and A. Saha, “Analysis of Food- Away-from-home Expenditure Patterns for U.S. Households, 1982-89,” American Journal of Agricultural Economics, Vol. 78, August 1996.
*7.Don Bellante and Ann C. Foster, “Working Wives and Expenditure on Services,”Journal of Consumer Research, Vol. 11, September 1984.
*8.Wen You and Rodolfo M. Nayga, Jr. “Household Fast Food Expenditures and Children’s Television Viewing: Can They Really Significantly Influence Children’s Dietary Quality?” Journal of Agricultural and Resource Economics, Vol. 30, No. 2, 2005.
*9.Gayaneh Kyureghian, Rodolfo M. Nayga, Jr.,, George C. Davis and Biing-Hwan Lin, “Food Away from Home Consumption and Obesity: An Analysis by Service Type and by Meal Occasion,” Selected Paper, AAEA Annual Meeting, Portland, Oregon, July 29-August 1, 2007.
*10.Jacinto F. Fabiosa, “The Food –Away-from-Home Consumption Expenditure Pattern in Egypt,” Working Paper 08-WP-474, Center for Agricultural and Rural Development, IowaStateUniversity, July 2008.
Topic 7:The Almost Ideal Demand System (AIDS)
Readings:
*1.Deaton and Muellbauer, Chapter 3.
*2.A. Deaton and J. Muellbauer, "An Almost Ideal Demand System," American Economic Review, No. 70, 1980.
3.Chern and Rickertsen, various chapters.
Topic8:Lancaster’s Characteristics Model
Readings:
*1.Lancaster, Chapters 2
- Colman and Young, Chapter 7.
*3K. Lancaster, "Change and Innovation in the Technology of Consumption," American Economic Review, 56: 14-23, May 1966.
*4.R. Hendler, "Lancaster's New Approach to Consumer Demand and Its Limitations," American Economic Review, 75: 194-199, March 1975.
- Chern and Rickertsen, Chapter 2.
Topic9:Hedonic Price Model
Readings:
*1.George W. Ladd, and Veraphol Suvannunt, "A Model of Consumer Goods Characteristics," American Journal of Agricultural Economics, 58: 504-510, August 1976.
- Diane Hite, Wen Chern, Fred Hitzhusen, and Alan Randall, “Property-Value Impacts of an Environmental Disamenity: The Case of Landfills,” Journal of Real Estate Finance and Economics, 22 (2/3): 185-202, 2001.
*3Columbus Board of Realtors, “Housing Characteristics: Which ones add value to the bottom line?” In Contract, 31 (3): 5-7, March 2004.
Topic 10:Stated Preference and Contingent Valuation
Readings:
*1.Earl and Kemp, pp. 128-134.
*2.Naoya Kaneko and Wen S. Chern, “Willingness to Pay for Genetically Modified Oil, Cornflakes, and Salmon: Evidence from a U.S. Telephone Survey,”Journal of Agricultural and Applied Economics, Vol. 37, Issue 3, December 2005.
Topic11:Experimental Economics and Auction Experiment
Readings:
*1.Wen S. Chern and Chun-Yu Chang, “Benefit Evaluation of the Country of Origin Labeling in Taiwan: Results from Auction Experiment,”Submitted to Food Policy, May 2010.
2.Wen S. Chern and Huei-Ching Lin, “Analysis of Country of Origin Labeling for Food Products in Taiwan using Auction Experiment,” Working Paper, August 2010.
3.Jason F. Shogren, Seung Y. Shin, Dermot J. Hayes, and James B. Kliebenstein, “Resolving Differences in Willingness to Pay and Willingness to Accept,” The American Economic Review, Vol. 84, March 1994.
4.Dermot J. Hayes, Jason F. Shogren, Seung Y. Shin, and James B. Kliebenstein, “Valuing Food Safety in Experimental Auction Markets,” American Journal of Agricultural Economics, Vol. 77, February, 1995.
*5.Frode Alfnes and Kyrre Rickertsen, “ European Consumers’ Willingness to Pay for U.S. Beef in Experimental Auction Markets,” American Journal of Agricultural Economics, Vol. 85, May 2003.
*6.Earl and Kemp, pp. 222-229.
Topic 12:Risk Perception and Measurement
Readings:
- Glenn W. Harrison, Morten I. Lau and E. Elisabet Rutstrom, “Estimating Risk Attitudes in Denmark: A Field Experiment,”Scand. L. of Economics 109(2), 341-368, 2007.
- Jayson L. Lusk and Keith H. Coble, “Risk Perception, Risk Preference, and Acceptance of Risky Food,”American Journal of Agricultural Economics 87(2) (May 2005): 393-405.
- Michel Setbon, Jocelyn Raude, Claude Fischler, and Antoine Flabault,”Rick Perception of the “Mad Cow Disease” in France: Determinants and Consequences,”Risk Analysis, Vol. 25, No.4, 2005.
- Wei-Fang Liu and Wan-Tran Huang, “A Study of Consumers’ Perception of Risk on Organic Tea in Taiwan,” Paper presented at the 99th EAAE Seminar on Trust and Risk in Business Networks, Bonn, Germany, February 8-10, 2006.
Topic 13: Food Consumption in Taiwan and China
Readings:
*1.Jikun Huang and Howarth Bouis, “Structural Changes in the Demand for Food in Asia: Empirical Evidence from Taiwan,”Agricultural Economics 26 (2001) 57-69.
2.Brian W. Gould, “Household Composition and Food Expenditures in China,”Agribusiness: An International Journal18(3): 387-407, 2002.
3.Steven T. Yen, Cheng Fang, and Shew-Jiuan Su, “Household Food Demand in Urban China: A Censored System Approach,”Journal of Comparative Economics 32: 564-585, 2004.
4.X. M. Gao, Eric J. Wailes and Gail L. Cramer, “Partial Rationing and Chinese Urban Households Food Demand Analysis,” Journal of Comparative Economics, 22:43-62, 1996.
5.Wen S. Chern, “Assessment of Demand-Side Factors Affecting Global food Security,” in Wen S Chern, Colin A. Carter, and Shun-Yi Shei, eds. Food Security in Asia, Edward Elgar, 2000.
6.Wen S. Chern and Guijing Wang, “The Engel Function and Complete Food Demand System for Chinese Urban Households,”China Economic Review, Vol. 4, Number 1, 1994.
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