ECONOMETRIC ESTIMATION OF ARMINGTON IMPORT ELASTICITIES FOR A REGIONAL CGE MODEL OF THE ILLINOIS ECONOMY

One of the main concerns associated with the development and use of regional CGE models is the determination of key parameter values, particularly substitution and other price elasticities. A common problem is the lack of appropriate regional data for econometric estimation. Consequently, it is important to identify key parameters that are likely to be important in determining quantitative results and then to prioritize these for estimation where appropriate data are available. In this paper, the focus is on the estimation of the regional trade (import) substitution parameters, which tend to be important in analysis for regional economies (given their openness to trade). Here, commodity import elasticities for the Illinois economy are estimated and tested in a single region CGE model of the Illinois economy. In our econometric estimation, we apply a model that takes account of market size and distance in estimating the substitutability between commodities produced in Illinois and other US states.     

THE IMPACT OF RURAL OUTMIGRATION ON REGION OF ORIGIN IN KOREA*

To assess the impact of rural outmigration on regions of origin, this paper borrows from international trade theory to develop a model of rural-to-urban migration. Borrowing from theories of nontraded goods and Dutch Disease, a model is developed for application to Korea. The model finds that rural outmigration can be detrimental to the rural sector when outmigration reduces farm profitability and triggers deterioration in the rural service sector. Farm profitability falls because of rising labor costs that cannot be passed on to consumers. The rural service sector falters when outmigration reduces market demand while raising input costs. County (kun) level Korean census data are used to test the model.     

ON THE DISTRIBUTIONS OF ORDER STATISTICS FOR A RANDOM SAMPLE SIZE*

The probability distribution of the i –th and j–th order statistics and of the range R of a sample of size n, taken from a population with probability density function f (x) have been obtained when the sample size n is a random variable N and has: (i) a generalized Poisson distribution; and (ii) a generalized negative bonimial distribution. Specific results are then obtained; (a) when f (x) is uniform over (0,1); and (b) when f(x) is exponential. All the results for N, being a Poisson, binomial and negative binomial rv follow as special cases.     

ESTIMATION OF PROBABILITY MODELS FROM INCOME CLASS DATA

Abstract. Many household surveys report income by a limited number of classes only. In Engel curve analyses of such data, income is usually equated to the class midpoint. We argue that it is better to specify a continuous income distribution over the entire range, and to estimate its parameters jointly with the Engel curve coefficients; the position of the dependent variable within income classes is sufficiently informative about the income distribution parameters. The method is illustrated for a simple logit model of automobile ownership. The effect on estimation is perceptible, but not impressive; further analysis suggests that the standard method is acceptable provided some care is taken over the income class limits at the lower end of the range.     

ARE THE OUTPUT EFFECTS OF MONETARY POLICY ASYMMETRIC? EVIDENCE FROM A SAMPLE OF EUROPEAN COUNTRIES

ABSTRACT This paper examines whether the effects of monetary policy on output in Europe are asymmetric. Data from the 1953–90 period are used to identify money-supply shocks and their effects on output for a panel of 18 European countries. Many different specifications and estimation methods strongly support asymmetry: negative money-supply shocks are shown to have a statistically significant effect on output, whereas the effect of positive shocks is statistically insignificant. A similar asymmetry governs the output effects of interest rate changes. The sources of these asymmetries are traced to similar behavior for consumption and investment. These findings imply that positive money-supply shocks may be an ineffective anti-recession policy, and more generally, that the monetary component of the optimal stabilization policy should be less activist than generally thought.     

INTRAHOUSEHOLD INEQUALITY AT DIFFERENT WELFARE LEVELS: ENERGY INTAKE AND ENERGY EXPENDITURE DATA FROM THE PHILIPPINES*

ABSTRACTS This paper investigates the relationship between intrahousehold inequality and levels of household welfare. Under certain conditions it is demonstrated — with both the unitary model of the household and with some collective models — that the relationship between household welfare and inequality within the household can have an inverted u-shape. Using two sets of calorie adequacy data from a sample of 455 households in the Philippines, a spline analysis is used to test the hypothesis that inequality within the household first increases and then decreases as per capita household total expenditure increases. The two sets of calorie adequacy data are based on repeated 24- hour recalls of dietary intake, and on calorie requirements that are unadjusted and then adjusted for individual activity patterns. Results indicate that once activity patterns are accounted for, calorie intake shortfalls are borne fairly equally within the household at all per capita household total expenditure levels.     

EFFECTS OF PUBLIC TRANSIT ON AUTOMOBILE OWNERSHIP AND USE IN HOUSEHOLDS OF THE USA

This study develops econometric models to predict the effect of access to and distance to public transit on automobile ownership and miles driven. Ordered logit model is used for automobile ownership and multiple regression model is used for vehicle miles traveled (VMT).
Inverse square root of transit distance is used as a measure for transit accessibility. Important findings in the analysis are (i) the number of licensed drivers is the primary determinant of the number of automobiles owned, (ii) the presence of children is not a significant factor in automobile ownership and VMT, and (iii) the VMT of multi-vehicle households is more sensitive to transit than one-vehicle households. Transit simulations are performed by improving the distance to and access to public transit. The results showed that total VMT in National Ambient Air Quality Standard non-attained metropolitan statistical area is reduced by 11% (approximately 60 billion miles) with 0.1 miles simulation.     

MAXIMUM-LIKELIHOOD ESTIMATES OF A US MULTIREGIONAL HOUSEHOLD EXPENDITURE SYSTEM

This paper applies the maximum-likelihood equation to a model that produces US regional household expenditure estimates using national-level data on average expenditures by type of household and regional data on the number of households by type. Empirical results follow the analytical properties of the model and demonstrate an impressive capacity to recover regional statistics. These findings are useful in applied regional studies since they demonstrate a general framework to assess the input data and the overall estimation model.     

THE ROLE OF TIME‐VARYING PRICE ELASTICITIES IN ACCOUNTING FOR VOLATILITY CHANGES IN THE CRUDE OIL MARKET

There has been a systematic increase in the volatility of the real price of crude oil since 1986, followed by a decline in the volatility of oil production since the early 1990s. We explore reasons for this evolution. We show that a likely explanation of this empirical fact is that both the short‐run price elasticities of oil demand and of oil supply have declined considerably since the second half of the 1980s. This implies that small disturbances on either side of the oil market can generate large price responses without large quantity movements, which helps explain the latest run‐up and subsequent collapse in the price of oil. Our analysis suggests that the variability of oil demand and supply shocks actually has decreased in the more recent past, preventing even larger oil price fluctuations than observed in the data. Copyright © 2012 John Wiley & Sons, Ltd.