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Importance of Understanding Consumption Dynamics In Market Recovery Periods

Published online by Cambridge University Press:  28 April 2015

Daniel S. Tilley
Daniel S. Tilley*
Affiliation:
Economic Research Department, Florida Department of Citrus Food and Resource Economics Department, University of Florida
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Extract

Periods of reduced supplies due to exogenous shocks and subsequent high price levels have occurred for many agricultural commodities in the past decade. Consumers' adjustments to these events depend on the magnitude of the shocks and characteristics of the commodity. Understanding consumers' responses to these events requires recognition of rigidities that result in delays in consumer responses to prices.

Recognition of rigidities in consumption relationships by using dynamic stock and flow adjustment models was popularized by Houthakker and Taylor [2]. The models recognize the role of inventories and habits resulting from previous purchase patterns in determining current consumption decisions.

Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 11 , Issue 2 , December 1979 , pp. 41 - 46
Copyright
Copyright © Southern Agricultural Economics Association 1979

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References

[1]Fuller, Wayne A.Introduction to Statistical Time Series, New York: John Wiley & Sons, Inc., 1976.Google Scholar
[2]Houthakker, H. S. and Taylor, Lester D.. Consumer Demand in the United States, second edition, Cambridge: Harvard University Press, 1970.Google Scholar
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[7]Thraen, C. S., Hammond, J. W. and Baxton, B. M.. “Estimating Components of Demand Elasticities from Cross-Sectional Data,” American Journal of Agricultural Economics, Volume 60, 1978, pp. 674–677.CrossRefGoogle Scholar