Subsidizing Charitable Giving with Rebates or Matching: Further Laboratory Evidence

We examine two different ways to subsidize charitable giving: by a rebate (returning a portion of the donation to the giver) or by a match (adding additional donations to the giver's donation). In previous experimental research, we have shown that participants give more to charity under the match than under an equivalent rebate. The previous within-subject experimental design required participants to make a series of decisions under both types of subsidy. Each decision consisted of an allocation of an endowment between the subject and a charity chosen by the subject from a specified list. This article examines whether that result is an artifact of the previous within-subjects design: subjects may have failed to fully distinguish the two types of subsidy. In the current article, we report results from a between-subjects design, where participants are required to make only one type of decision—involving rebates or involving matching subsidies. Our results confirm previous findings.     

Market Performance Implications of the Transfer Price Rule

The “transfer price rule” (TPR) defines a vertical price squeeze as an input price, output price combination set by a vertically‐integrated firm monopoly producer of an essential input that would not allow the firm's downstream unit to earn at least a normal rate of return on investment in the “as‐if” case that it had to purchase the input at the price charged independent firms. In its 2009 linkLine decision, the U.S. Supreme Court rejected the TPR for the purpose of enforcing the anti‐monopolization prohibition of Section 2 of the Sherman Act. In contrast, a vertical price squeeze, defined by a TPR‐like standard, is an abuse of a dominant position under Article 102 of the Treaty on the Functioning of the European Union. In this article, we model the impact of the TPR on market performance. We find that the TPR increases consumer surplus and net social welfare if all firms remain active in the downstream market. It sometimes induces the upstream firm to refuse to supply the downstream firm, and in such cases, consumer surplus and net social welfare are reduced. The impact of the TPR on market performance thus depends on whether or not an upstream firm can refuse to supply downstream firms on terms that would offer it at least a normal rate of return on investment.     

出口退税政策对高耗能产品出口的控制效应研究——基于中国钢材出口经验证据

钢铁行业实施的是差别退税制度。文章通过建立PVAR(面板向量自回归)模型,使用脉冲响应函数分析方法,测度出口退税率的调整对高、中、低能耗钢材产品出口量及出口价格动态影响的异同,以此分析出口退税政策对高能耗产品出口的控制效应。实证结果表明:出口退税率的提高能刺激出口,高能耗产品的出口对出口退税率的变化最敏感。与出口退税率的影响相比,出口商品价格对出口量的影响要小得多,但同样地,高能耗产品的出口对出口商品价格变化最敏感。最后,出口退税政策的调整从总体上对出口商品价格的影响不大,但出口退税率上升将导致高能耗产品更有价格优势。     

Urban bias and the political economy of agricultural reform

This paper is an exercise in the incorporation of “political economy” constraints into the analysis of policy reform. It is an illustrative exercise, focusing on the potential distributional consequences of agricultural price reform. In the stylized model discussed in the paper, “urban bias” is reflected in the ability of the urban sector to maintain its standard of living in the face of price reform, through the channel of increased government expenditure on the output of the sector. It is shown that in such a setting price reform may have completely unintended effects.The paper appears in a somewhat unusual format. The first half of the paper presents the arguments in an entirely non-technical, verbal, manner. The second half of the paper presents a formal, mathematical development which makes precise the heuristic and intuitive discussions of the first half.     

FAIR VALUE PRICING OF AGRICULTURAL FUTURES IN SOUTH AFRICA

In the South African agricultural (specifically grain) markets an interesting phenomenon exists: where futures and options on grain products exist (i.e. white maize, yellow maize, soy beans, wheat, and sunflower seeds) price discovery in the spot (also known as “cash”) markets is poor, whereas price discovery in the futures markets is considered respectable. Consequently, whenever a spot deal is undertaken, this price is “derived” from the relevant futures market. This severely anomalous phenomenon will be evident: futures are generally labeled “derivatives” because their prices are “derived” from their spot markets, whereas here we have a situation where spot prices are derived from their futures price (specifically the price of the near – as opposed to far – future). Because of this unusual phenomenon the mathematics involved is not readily available in the literature; this article is an attempt to briefly outline the phenomenon and to present the relevant mathematics.     

Option Trading,Price Discovery,and Earnings News Dissemination*

Abstract. Option market activity increases by more than 10 percent in the four days before quarterly earnings announcements. We show that the direction of this preannouncement trading foreshadows subsequent earnings news. Specifically, we find option traders initiate a greater proportion of long (short) positions immediately before “good” (“bad”) earnings news. Midquote returns to active-side option trades are positive during nonannouncement periods and are significantly higher immediately prior to earnings announcements. Bid-ask spreads for options widen during the announcement period, but traders do not gravitate toward high delta contracts. Collectively, the evidence shows option traders participate generally in price discovery (the incorporation of private information in price), and more specifically in the dissemination of earnings news.     

Economic Value of Country Image: Evidence from International Trade and Implications for China

This paper examines the economic value of country image from the perspective of export prices through matching the CEPII export price data with the British Broadcasting Company country image data from 2006 to 2013. The estimation results show that positive country image has an “elevating” effect and negative country image has a “depressing” effect on export prices. The results also indicate that the lower the level of economic development of an export or import country, the stronger the export price effect of country image. As distances between export countries and trading partners increase, the elevating effect of positive country image on export prices becomes weaker. However, the depressing effect of negative country image does not become weaker over greater distances. We find that export prices are depressed by negative country image to a greater degree for China than for other countries. Therefore, it is necessary for China to prevent the occurrence of incidents detrimental to country image.     

Forced commerce and agrarian growth

The paper explains why contractually interlocked agrarian markets differ from price—and quantity—adjustments under pressures of excess demand/supply in neoclassical general equilibrium analysis. Such contractual interlocking, arising (say) from the indebtedness of the peasants, gives rise to a contrived system of “forced commerce”. This commercial mode of exploitation not only exhibits unequal relations of economic power, but more important, it is also a mechanism for maintaining such unequal power structure, often at the cost of retarding agrarian growth. The paper thus emphasizes the need to understand the very notion of “market exchange” and “commerce” in backward agriculture from an unconventional viewpoint.     

Industry-specific Real Effective Exchange Rate for China： 2000-2009

This paper measures the industry-specific real effective exchange rate （REER） for China by matching domestic and foreign industry-level price and trade data series. We find that after 2005 the REER appreciates more in the ＂chemical, plastics, rubber and fuels industry＂ and the ＂＇machinery and equipment industry,＂ but remains roughly constant or even depreciates in other industries. The nominal exchange rate generally accounts for over 50 percent of the aggregate real effective exchange rate JTuetuations, but this conclusion does not apply to three of nine industries. We apply the industry-specific REER to re-examine the relationship between the exchange rate and trade, and find that the industry-specific REER index performs better than the traditional aggregate REER index. We recommend that the Chinese Government officially adopt industry-specific exchange rates instead of using the aggregate effective exchange rates to evaluate the competitiveness of Chinese industries in the international market.     

Residential Consumer Switching and Electricity Restructuring Policy: The Pennsylvania Power Market

Without significant price reduction, high consumer switching rates to competitive power suppliers have been criticized as a result of either the artificially high price to compare (PC) acting as the benchmark price that competitive generators must meet, or the critical mass effect from switching consumers. This paper builds a simple model to explore how the restructuring policy determines residential switching behavior. When the PC increases over time, whether it reflects the rising wholesale price adequately or not, a consistent price reduction policy will naturally induce an early-stage high switching rate. In contrast, a required switching rate policy that is associated with both an artificial price cut at the early stage and a longer period of stranded cost recovery can accelerate switching effectively. Two high-cost Pennsylvania utilities, which demonstrate opposite movements of residential switching rate under different restructuring policies, are examined to confirm that the high switching rate just results from the policy design, not from the subsidy in PC discussed in (Joskow, Paul L. “Why Do We Need Electricity Retailers? Or, Can You Get It Cheaper Wholesale?” Center for Energy and Environmental Policy Research, MIT, Revised discussion draft, 2000b), or the critical mass effect concluded in (Reitzes, James D., Lisa V. Wood, J. A. Quinn, and Kelli L. Sheran. “Designing Standard-Offer Service to Facilitate Electric Retail Restructuring.” The Electricity Journal 15, 9, 2003, pp. 34–51). Switching rates play no role in evaluating the success or failure of a restructuring.     

GOVERNANCE INSTITUTIONS AND PRIVATE INVESTMENT: AN APPLICATION TO THE MIDDLE EAST AND NORTH AFRICA

This paper addresses the issue of the low level of private investment in the Middle East and North Africa (MENA) region, with special emphasis on the role of governance. Based on the existing published reports, we categorize what types of governance institutions are more detrimental to entrepreneurial investments. We then estimate a simultaneous model of private investment and governance quality where economic policies concurrently explain both variables. Our empirical results show that governance plays a significant role in private investment decisions. This result is particularly true in the case of “administrative quality” in the form of control of corruption, bureaucratic quality, investment‐friendly profile of administration, law and order, as well as for “political stability.” Evidence in favor of “public accountability” is also found. Our estimations also stress that structural reforms like financial development, trade openness, and human development affect private‐investment decisions directly, and/or through their positive effect on governance.     

Is More Information Always Better? An Experimental Study of Charitable Giving and Hurricane Katrina

We report results of an experiment designed to assess the impact of Hurricane Katrina on the pattern and level of charitable contributions of donors. The study includes an experimental measure of charitable giving and targets three charities: the American Red Cross, the Salvation Army, and Oxfam International. In the experiment subjects make allocation decisions from three endowments ($10, $20, and $50) and with four different matching subsidies (0%, 25%, 50%, and 100%), with the matching amount provided by the experimenter. Two locations (Texas and Minnesota) and two information conditions are used. Survey measures of sympathy, risk perceptions, and perceptions of Katrina victims are also collected. The probability and amount of giving are responsive to the experimental design parameters—the endowment and match. We find evidence of “Katrina overload” as those closest to the disaster respond negatively to Katrina-related priming information. Perceptions of the psychological attitudes of the victims of the disaster have a significant effect on the amount given.     

Market Interaction and Pro-Social Behavior: An Experimental Study

When actions generate negative externalities for third parties, incentives exist to pass these “morally costly” decisions to others. In laboratory experiments, we investigate how market interaction affects allocations when the right to divide a sum of money between oneself and a passive recipient is commoditized. Allocation to recipients is reduced by more than half when determined by subjects who purchase or keep the right to make the division as compared to a control where subjects are directly assigned the right. Sellers report accurate beliefs about recipient allocations and do not report feeling less responsible the more often they sell the allocation right. The market allocates the right to make divisions more frequently to buyers who allocate more to recipients, but sellers who allocate less to recipients tend to sell less often. Selection cannot solely explain the results, suggesting market interaction itself may directly impact behavior.     

Accounting Quality,Stock Price Delay,and Future Stock Returns*

In frictionless capital markets with complete information and rational investors, stock prices adjust to new information instantaneously and completely. However, a substantial body of research studies information imperfections such as asymmetric information and incomplete information. Information imperfections potentially hinder timely price discovery and are likely associated with delayed stock price adjustment to information. Our first research question therefore is whether the quality of accounting information (or “accounting quality”) is one such information imperfection that is associated with cross‐sectional variation in stock price delay. We define accounting quality as the precision with which financial reports convey information to equity investors about the firm’s expected cash flows. Poor accounting quality is likely associated with higher expected returns through uncertainty about stock valuation parameters and incomplete information. Our second research question therefore is whether the accounting quality component of price delay is associated with higher future stock returns. Consistent with our hypotheses, the results show that poor accounting quality is associated with delayed price adjustment and higher future stock returns. Thus, accounting quality plays a role in timely stock price discovery.     

电网代理购电业务方法及对电网经营影响探究

1439号文放开所有燃煤机组进入市场,取消所有工商业用户的目录电价,并要求由电网暂时代理未进入市场的工商业用户购电,由此催生了市场新形势下的电网代理购电业务。根据809号政策要求,梳理电网代理购电业务开展流程及电网各部门的相关业务协同,并对电网代理购电关键环节的几个重点问题进行分析;提出一套电网代理购电价格计算方法,分析其对电网公司经营的影响,并构建算例进一步展示所提电网代理购电价格计算方法,为后续电网代理购电业务的实际开展提供参考和技术支撑     

我国住房抵押贷款证券定价研究

在我国房地产业的迅猛发展下,住房抵押贷款规模不断扩大,住房抵押贷款证券化也随着“建元2005-1”的上市而破局,住房抵押贷款证券的定价问题研究也成为我国资本市场证券化领域的热点。本文在总结了国外定价方法和国内相关研究的基础上,从分析影响我国住房抵押贷款证券价格的主要因素入手,阐述了借款人可支配收入和房款这两个主要因素决定的借款人提前还款的模型,并根据我国住房抵押贷款证券的特点建立了住房抵押贷款转付证券的静态利差定价框架。采用此定价框架,本文对“建元2005-1”资产池进行了定价分析,结果显示,相对于建元发行说明书里假设的CPR,在基于收入和房款的提前还款模型下,资产池的提前还款风险更大,对利率变动更加敏感,要求的收益率也更高。     

What Determines China's Grain Imports and Self‐sufficiency? The Role of Rising Domestic Costs and Varying World Market Prices

China's grain sectors have faced unprecedented challenges in recent years as the ever‐increasing and historically high level of grain output has failed to reduce grain imports. On the contrary, high grain imports and high domestic stock have accompanied historically high domestic output, a situation dubbed the “triple high” phenomenon in current policy discussion. This paper explores the role of widening domestic–world market price gaps in determining the triple high phenomenon. Unlike earlier studies that relied on production capacities, this paper argues that domestic production and demand (hence imports) are functions of domestic and world market prices and proposes an analytical framework to explicitly capture such price gaps under restricted trade linkages in general equilibrium. Following this approach, a set of price scenarios for the 2011–2020 period are constructed and simulated in a computable general equilibrium model. Results from the core scenarios, in which recent domestic and world market price trends are assumed to continue, suggest that further widening price gaps would substantially increase grain imports and reduce domestic output (by 60 million tons) and self‐sufficiency ratios from base levels. In the alternative scenarios with larger (smaller) price gaps, we find higher (lower) imports and larger (smaller) decreases in domestic output and self‐sufficiency ratios. Such results provide important policy implications as China's agricultural policy undergoes significant adjustment.     

Are local governments maximizing land revenue? Evidence from China

This paper examines how political considerations affect local officials' revenue maximization behaviors in the context of urban land conveyance in China. Particularly, we analyze government intervention based on local officials' choice of two land auction types, namely, “English auction” and “two-stage auction”. The latter presumably serves as a tool of government intervention. We aim to address the research question: “Are local governments maximizing land revenue?” The major findings are threefold. First, for cities with higher housing prices, two-stage auctions are adopted more frequently than English auctions. In addition, land parcels in these “hot” cities adopt two-stage auctions more frequently during sensitive political events, suggesting that local officials respond positively to the real estate regulation policy from central government. Second, when city leaders are more incentivized to promote economic performance, they respond less positively to rises in housing prices. Third, such interventionist behavior results in a significantly depressed land price and housing price. Despite its intention of improving public welfare, this interventionism can susceptibly cause problems of misallocation and corruption.     

“Exports‐at‐Risk”: The Effect of Multimarket Contact in International Trade

Despite a well‐established literature examining possible impacts on competition in oligopolistic markets from multimarket contact (MMC) among diversified firms, only recently have trade theorists considered the possible effects of MMC among exporters in limiting the anticipated procompetitive role of imports. This article presents a first effort to test the empirical importance of a measure of this MMC, called “exports‐at‐risk,” on import prices (unit‐values). Suggestive evidence of anticompetitive impacts of MMC among exporters is obtained for highly traded four‐digit harmonized system (HS) products within the broad category of “fats and oils.” Exporters in fats and oils seem to price higher in markets where they meet rivals with the ability to retaliate against their “exports at risk.”     

Perceived need and actual demand for health insurance among rural Chinese residents

One would expect that an individual perceives a need for health insurance before making a purchase. However, simply perceiving a need for insurance is not sufficient for making a purchase. When insurance is “lumpy” individuals perceiving a need may not make a purchase if financial resources are lacking. In this paper we develop a theoretical model which differentiates need from demand for health insurance. We then empirically investigate rural health insurance demand in China. We find that factors like children, education and wealth affect perceived need differently from the way they affect demand.