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Abstract
Information about consumer welfare effects associated with quantity changes in demand is
important for agricultural and food policy decision-makers because many policy options are
directly related to controlling supplies as a means to stabilize or raise commodity prices and
farmers’ income. A new method is developed to measure the consumer welfare effects by
using the estimates of an inverse demand system and a modified quantity-adjusted Malmquist
index to represent the efficiency in quantity metric welfare. The methodology is validated by
applying it to a U.S. inverse food demand system consisting of 13 food groups and a nonfood
sector.