Prices and production: agricultural supply response in fourteenth‐century England

This article challenges the growing consensus in the literature that medieval manorial managers were price responsive in their production decisions. Using prices of and acreages planted with wheat, barley, and oats on manors held by the bishop of Winchester from 1325 to 1370, price elasticities of supply are estimated for each grain in aggregate and on each particular manor. Aggregate price elasticities of supply for wheat, barley, and oats were rarely statistically significant and when significant were very low compared with elasticities estimated for developing and developed countries in the nineteenth and twentieth centuries. The low levels of agricultural supply response in fourteenth‐century England suggest that commercialization was not as dominant in the medieval economy as has been argued. Thus, structural changes in the economy, such as the leasing of demesnes, the growth of wage labour, and the end of villeinage, may have been more important than price fluctuations in driving long‐run economic change after the Black Death. Likewise, a shift from low price responsiveness to higher price responsiveness could have been an important part of the capitalist transformation of agriculture in the early modern period.     

DETERMINANTS OF DEMAND FOR FIJI'S EXPORTS: AN EMPIRICAL INVESTIGATION

Fiji is no exceptin to the rule that exports are an important source of growth and development. In this light, it is important to know the determinants of exports. However, there is no empirical study on Fiji's export demand. This paper uses the modern econometric techniques—in particular, the autoregressive distributed lag approach to cointegration—to investigate whether the standard export demand variables, viz., trading partner income, export price, and competitor price, have a long‐run cointegration relationship with Fiji's real exports for the period 1970 to 1999. In addition, the long‐run results are also estimated by using the dynamic ordinary least squares and the fully modified ordinary least squares. The empirical results indicate the existence of a cointegration relationship among the variables. The long‐run foreign income, own‐price, and cross‐price elasticities are found to be 0.7 to 0.8, −1.3 to −1.5, and 2.1 to 2.2, respectively.     

New Evidence on Export Price Elasticity from China and Six OECD Countries

This paper provides new evidence on export price elasticities by analyzing the cases of China, France, Germany, Italy, Japan, UK and the USA over the period 1990–2012. Estimates have been made using panel data techniques for non‐stationary data. After demonstrating that long‐run relationships are stable to any structural break, it is found that exports are significantly determined by foreign demand, with long‐run income elasticity significantly higher than unity for China, Japan, Germany, the UK and the USA. Conversely, exports are price inelastic for most of the countries in the sample, in both the long run and the short run. The exception is France, whose export price elasticity is lower (higher) than unity in the short run (long run).     

Income and Price Elasticities of Demand in South Africa: An Application of the Linear Expenditure System

This paper investigates the expenditure patterns of South African households using detailed cross‐sectional expenditure and price data that varies across region and time. Linear expenditure system parameter estimates are used to calculate income and price elasticities for a number of product categories at different points of the income distribution. We find substantial variation in the price and income elasticities of demand for items across the income distribution, with the bottom quartile being extremely sensitive to increases in the price of food and clothing items, and the top quartile being as sensitive as households in developed countries.     

Errors-in-variables, supply side effects, and price elasticities in foreign trade

Errors-in-Variables, Supply Side Effects, and Price Elasticities in Foreign Trade.—Previous estimates of price elasticities in foreign trade are likely to be biased upward due to errors-in-variables, omission of supply side influences, aggregation, bad measurement of price competitiveness, and misspecification of the estimation equations. This paper incorporates the supply side into the traditional demand for export equation and uses a panel data approach for OECD manufacturing to provide unbiased estimates of price elasticities. The estimates indicate that the sum of the absolute import and export price elasticities is close to one and that currency depreciations are likely to adversely affect trade balances in the long run due to supply side influences. JEL no. E3, F1, F4     

An empirical examination of the disaggregated import demand of Korea—the case of information technology products

This article presents an empirical analysis of the import demand for certain information technology products in Korea. These products have been recognized as essential for further economic growth in Korea, as the Korean government aims to transform the economy into one based on information technology. The unrestricted error correction model is used to derive the long run price and income elasticities of import demand, considering the small sample size. The price elasticities are revealed to be quite high in all cases, implying that lowering of the tariff rates would increase the import of those products substantially.     

THE ECONOMICS OF PLASTIC BAG LEGISLATION IN SOUTH AFRICA1

In May 2003 South Africa introduced legislation intended to decrease plastic bag litter. It combined standards and price‐based economic tools in an attempt to reduce the public's demand for plastic bags. This paper analyses the short term effects of the legislation on bag demand. It also provides a background to these regulations and a theoretical overview. The assessment uses bag consumption data from four retailers, each representing a different consumer market. These are analysed, and respective price elasticities calculated. The results suggest that plastic bag demand is relatively price inelastic and imply that instruments utilising price alone, would have limited efficacy. However, the combination of standards and pricing successfully curbed plastic bag use in the short run. Further analysis suggests that the effectiveness of the legislation may be declining over time.     

The Link between Earnings Conservatism and the Price‐to‐Book Ratio*

We hypothesize and find that (1) earnings conservatism, the tendency of firms to recognize bad news in earnings on a more timely basis than good news, is substantially greater in portfolios of firms with lower price‐to‐book ratios than in portfolios of firms with higher price‐to‐book ratios; and (2) the negative association between earnings conservatism and the price‐to‐book ratio stems primarily from the accrual component of earnings, not the operating cash flow component of earnings. Our results suggest that studies using earnings‐returns associations to investigate cross‐sectional or time‐series differences in earnings conservatism risk drawing erroneous inferences unless the research designs control for cross‐sectional or time‐series variation in price‐to‐book ratios.     

Variations in the price and quality of English grain, 1750–1914: Quantitative evidence and empirical implications

Interpretation of historic grain price data may be hazardous owing to systematic grain quality variation — both cross sectionally and over varying time horizons (intra-year, inter-year, long run). We use the English wheat market, 1750–1914, as an example to quantify this issue. First, we show that bushel weight approximates grain quality. Then we show that cross sectional and intra-year variation are substantial and problematic, generating erroneous inference regarding market integration. Long run variation is significant, due to sharply declining international quality differentials, and this impacts estimated cost of living changes. By contrast, inter-year variation is smaller and controlled for more easily.     

Tariff pass‐through in the middle products model

I use the middle products model of Sanyal and Jones to study the pass‐through of a tariff on the price of non‐traded final goods. I extend their analysis by comparing the short‐run effect of the tariff, when all factors are immobile, with the effects when labor is mobile between all sectors. It is shown that the short‐run pass‐through may vary from zero to a magnified effect on the price of the final product, depending on the elasticities of substitution in consumption and production. The relative magnitude of these elasticities determines whether the pass‐through with labor mobility is greater or less than the short‐run pass‐through.     

CIGARETTE DEMAND IN SOUTH AFRICA OVER 1996-2006: THE ROLE OF PRICE, INCOME AND HEALTH AWARENESS

The study seeks to re‐investigate the role of price, income and health awareness in the evolution of South African cigarette demand over the period 1996 to 2006. At first glance, rising cigarette prices appear to have played an important role in reducing cigarette consumption over the sample period, especially during the late 90s. But how dependent is the impact of price increases on general economic conditions and overall health awareness among smokers? Health awareness, in particular, has not received sufficient attention in the South African context, due to a lack of data. Previous estimates of price and income elasticities of cigarette demand are based on long annual time series data, which do not allow for changes in underlying tastes and preferences. The paper attempts to disentangle the forces of price, income, health awareness and policy intervention using a quarterly data set. In addition, the study also cautions against the upward bias in estimates derived from formal cigarette sales data – in the light of increasing illicit cigarette volumes in South Africa.     

Revisiting the Exchange Rate Pass‐Through to Inflation in Africa’s Two Largest Economies: Nigeria and South Africa

This paper revisits the exchange rate pass‐through (ERPT) to inflation in Nigeria and South Africa by incorporating structural breaks and using time series variables, namely the consumer price index, nominal effective exchange rate, gross domestic product, and crude oil price. Based on the Maki cointegration test and a flexible estimation approach of the Autoregressive Distributed Lag (ARDL) model, our empirical evidence suggests that the long‐ and short‐run ERPT to inflation is complete for Nigeria, while for South Africa it is incomplete both in the long run and short run. This result indicates that prices are stickier in South Africa compared to Nigeria. The comparison between Nigeria and South Africa confirms the role of inflation targeting and central bank credibility on the ERPT. The results divulge further that output growth in Nigeria increases inflation in the long run while it is anti‐inflationary in the short run. For South Africa, the effect of output growth is negatively insignificant. In addition, the long‐run effect of oil price is negative and significant for Nigeria, while for South Africa the short‐run effect of oil price is positive and significant. Therefore, the findings of this paper will assist the monetary authorities to achieve monetary policy objectives.     

Food Demand Characteristics in Uganda: Estimation and Policy Relevance

Uganda was highly successful in reducing poverty over the past two decades but made little progress towards household food security. This underlines the need for designing food security interventions customised for household‐specific needs and behaviours. This study estimates Ugandan household demand behaviour with a focus on food consumption paying particular attention to household‐specific characteristics. The results show that preferences to increase calorie‐dense staple consumption, likely associated with food energy deficiency, extend far beyond the percentage of rural Ugandans officially deemed poor. Price elasticities indicate that poor rural households are largely well positioned to compensate staple price increases by substitution as long as they are not already concentrated on the cheapest foods. This flexibility applies less to urban households. The estimated demand elasticities generally vary widely between rural and urban households and depend on expenditure levels. Household‐specific characteristics have significant, sometimes pronounced, influences on demand, as do seasons and regions. The results reflect highly differentiated demand behaviour, which can be utilised to improve the design and evaluation of food security interventions.     

THE DEMAND FOR FOOD IN SOUTH AFRICA1

Food consumption is an important issue in South Africa, given its relation to poverty and deprivation. With the pressing need to increase food security, understanding the determinants of the demand for food and having some estimates of the likely impact of price and income changes has become a vital task. There is, however, surprisingly little economic research on this topic and almost none in recent times. This paper provides a comprehensive empirical analysis of the demand for food in South Africa for the years 1970‐2002. It moves beyond the usual static modelling approach in using a general dynamic log‐linear demand equation and a dynamic version of the almost ideal demand system, to provide estimates of the short‐ and long‐run price and expenditure demand elasticities.     

Short‐run marginal medical costs from booze and butts: Evidence from the states

This article uses a panel data set of U.S. states over the 1980 to 2007 period to estimate the demands for medical care, cigarettes, and beer. The estimation process generates own‐price, income, and cross‐price elasticities for all three goods. Implied per capita beer and cigarette consumption elasticities of per capita health care expenditures, suggested by our baseline estimates, are 0.83 and 0.14, respectively. These results are robust to a number of specification tests. Simulations suggest that yearly marginal medical costs amount to approximately $12 per bottle and 27 cents per cigarette in the short run (in 2012 dollars). These results are likely to be driven by the much larger corresponding increases in the consumption of binge drinkers and heavy smokers.

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Determinants of Female Fertility in Taiwan, 1966–2001: Empirical Evidence from Cointegration and Variance Decomposition Analysis*

This study investigates the determinants of the fertility rate in Taiwan over the period 1966–2001. Consistent with theory, the key explanatory variables in Taiwan's fertility model are real income, infant mortality rate, female education and female labor force participation rate. The test for cointegration is based on the recently developed bounds testing procedure while the long‐run and short‐run elasticities are based on the autoregressive distributed lag model. Among our key results, female education and female labor force participation rate are found to be the key determinants of fertility in Taiwan in the long run. The variance decom‐position analysis indicates that in the long run approximately 45percent of the variation in fertility is explained by the combined impact of female labor force participation, mortality and income, implying that socioeconomic development played an important role in the fertility transition in Taiwan. This result is consistent with the traditional structural hypothesis.     

中国货币供应量与能源价格的实证分析

以2005年1月至2011年12月的货币发行量和能源价格月度数据为样本,采用VAR模型和基于该模型的脉冲响应、方差分解、误差修正和格兰杰因果检验等实证方法分析二者之间的短期及长期均衡关系,结论表明:货币发行量(M2)和能源价格具有显著的长期协整关系;但短期内,与货币发行量对能源价格的影响程度相比,能源价格对货币发行量的影响程度较强,即在短期内货币发行量的变动没有显著地传导到能源价格变动上。     

The Demand for Money in Brunei

Based on data for the 1974–95 period this paper estimates demand for narrow money and broad money in Brunei using the error-correction specification. Short-run and long-run elasticities are estimated with respect to real income, interest rate, expected price level and liquidity. Narrow money is quite responsive to changes in real income and interest rate in both the short and long terms. Broad money is income inelastic regardless of the time horizon, however, it is interest inelastic in the short run but interest elastic in the long run. Price elasticity of money demand is negligible in the short run but quite significant in the long run. Changes in the proportion of commercial bank assets placed in foreign money markets do not seem to affect demand for narrow money but their effect on the demand for broad money is both direct and significant.     

Trade elasticities in transition countries

Trade elasticities play a crucial role in translating economic analysis of external adjustment issues into macroeconomic policy. Trade demand elasticities allow policy makers to draw important conclusions about exchange rate misalignments or trade balance changes. This paper endeavors to bring transition countries, namely those from Central and Eastern Europe and the Commonwealth of Independent States, into the universe of estimated price and activity elasticities of trade volumes. The estimated results imply that the traditional ‘Marshall-Lerner’ condition is not satisfied for transition countries. The estimated price elasticities of export and import demands perform fairly well in predicting out-of-sample changes in trade balance ratios for a broad set of transition countries. In the long run, however, exports and imports are mainly driven by income changes.