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Article
Publication date: 13 November 2007

Danny I. Cho, Mikhail Permyakov and Tomson Ogwang

The purpose of this paper is to investigate structural changes in the elasticity of demand for wine in the Province of Ontario and in Canada as a whole. It will provide…

Abstract

Purpose

The purpose of this paper is to investigate structural changes in the elasticity of demand for wine in the Province of Ontario and in Canada as a whole. It will provide academic researchers and practitioners with a better understanding about structural changes in the levels of wine demand elasticities over time. It will also help the relevant governments and wine business establishments in developing taxation policy and business decisions.

Design/methodology/approach

The Kalman filter method, in conjunction with the Chow test, is applied to investigate structural changes in the elasticity of demand for wine. The Chow test is used for primary investigations of structural changes in the elasticity of demand for wine over time, whereas the Kalman filter method provides information about the behavior of the elasticity coefficients over time.

Findings

The Chow test reveals that structural changes in wine demand for Ontario are more pronounced than those for Canada as a whole. The Kalman filter results indicate that increased (decreased) government taxation could be an effective tool for discouraging (encouraging) consumption of wine. The analysis of own‐price elasticity suggests that the effects of increased government taxation on wine consumption be totally unexpected. Cross‐price elasticity coefficients change their signs over time, suggesting that some of the goods that are considered to be complements may become substitutes. Income and unemployment levels have different effects on wine consumption in Ontario and in Canada as a whole.

Research limitations/implications

There may be variation in results by wine color (red or white), country of origin (imported or domestic), or price (premium or non‐premium).

Practical implications

Understanding changes in the elasticity of demand structure for wine over time would help policy makers at the provincial and federal levels come up with effective tools for controlling consumption of wine over time, including their taxation policies. For the wine business establishments, the information on consumer response is important for pricing purposes.

Originality/value

The Kalman filter has not previously been used to examine structural changes in the demand for wine in Canada.

Details

International Journal of Wine Business Research, vol. 19 no. 4
Type: Research Article
ISSN: 1751-1062

Keywords

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Article
Publication date: 25 July 2008

Danny I. Cho and Tomson Ogwang

The purpose of this paper is to provide academic researchers and practitioners with a better understanding of the current Ivey Purchasing Managers Index (IPMI), with…

Abstract

Purpose

The purpose of this paper is to provide academic researchers and practitioners with a better understanding of the current Ivey Purchasing Managers Index (IPMI), with alternative IPMIs, and with their appropriateness as an indicator of the performance of the Canadian economy.

Design/methodology/approach

The paper makes use of principal component analysis to investigate the choice of principal variables for computing new IPMIs based on monthly data for five Ivey indexes for the period from December 2000 to May 2006. Statistical tests were made for the validity of the existing and new IPMIs using two major indicators of Canadian business and economic activities.

Findings

The results suggest that a new composite purchasing managers index for Canada similar to its US counterparts be computed based on four identified Ivey indexes. For constructing a simpler and parsimonious IPMI, the results support Ivey's current practice of using only one Ivey index, namely, the Purchases index.

Research limitations/implications

There was a limited amount of data used for the analysis (i.e. monthly data for less than six years). Also there are issues on data comparability between the Ivey data and the US data (i.e. the Ivey does not collect separate data for the manufacturing sector or the non‐manufacturing sector).

Practical implications

Using a composite index akin to the PMI, business organizations and policymakers will have an accurate sense of what is happening in the Canadian economy. Furthermore, enhancing the power and accuracy of such an index will benefit supply professionals, economic forecasters, and policy experts.

Originality/value

The present study offers additional insights to both practitioners and academics. It helps supply chain managers and practitioners come up with a more reliable business strategy by providing them with a weighted composite index for the Canadian economy. It also makes contributions to the academic community in the area of statistical theory applied to supply management as it has introduced the principal components variable selection analysis in the construction of a new IPMI.

Details

Journal of Enterprise Information Management, vol. 21 no. 4
Type: Research Article
ISSN: 1741-0398

Keywords

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Article
Publication date: 16 March 2012

Don Cyr, Joseph Kushner and Tomson Ogwang

The purpose of the paper is to examine the structure of California's north coast wine industry from 1984 to 2009, to determine if there are significant changes in the size…

Abstract

Purpose

The purpose of the paper is to examine the structure of California's north coast wine industry from 1984 to 2009, to determine if there are significant changes in the size distribution of wineries.

Design/methodology/approach

Chi‐squared tests in conjunction with the Hoelter index are used to determine whether the changes in the market share for various size classes are significant.

Findings

The authors find a statistically significant trend in terms of smaller wineries becoming an increasing percentage of the total number of wineries and of market share.

Originality/value

Unlike most other industries, small wineries are able to meet the changing market and technological conditions of the industry. These results augur well for the growing area of wine tourism which is highly dependent on boutique wineries. The results are also encouraging to new start up wineries considering entering the industry.

Details

International Journal of Wine Business Research, vol. 24 no. 1
Type: Research Article
ISSN: 1751-1062

Keywords

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