The impact of changes in household vacation expenditures on the travel and hospitality industries

Two large tourism industries, travel and hospitality, are strongly affected by changes in household demand for vacations. In recent years, rising income and declining prices per unit of quality have led to changes in patterns of household vacation consumption. To understand the impact of these changes on the travel and hospitality industries, we develop a theoretical model distinguishing between travel and on-site expenditures and apply it to Israeli data. We find that under certain circumstances, the changes in income and prices are responsible for a shift toward multiple, short vacations. This trend can be a boon to the travel industry but a disadvantage for the hospitality industry. Both industries are expected to face a rise in the demand for high-quality products.     

Comment on Johnson’s creating dimensional stock-flow inconsistency in Binswanger’s model

Binswanger (2009 Binswanger, M. 2009. “Is There a Growth Imperative in Capitalist Economies? A Circular Flow Perspective.” Journal of Post Keynesian Economics 31:707–727. doi:10.2753/pke0160-3477310410.[Taylor &; Francis Online], [Web of Science ®] , [Google Scholar]) constructed a model of a pure credit money economy with production to demonstrate the existence of growth imperative in such economies. This model entails a misspecification because money may disappear from the economy at the alleged minimal steady state growth rate (Gilányi 2015 Gilányi, Z. 2015. “A Brief Note on Mathias Binswanger’s Model.” Journal of Post Keynesian Economics 37:590–596. doi:10.1080/01603477.2015.1049927.[Taylor &; Francis Online], [Web of Science ®] , [Google Scholar]). Johnson (2015 Johnson, R. 2015. “Capitalism’s Growth Imperative: An Examination of Binswanger and Gilányi.” Journal of Post Keynesian Economics 37:597–622. doi:10.1080/01603477.2015.1049928.[Taylor &; Francis Online], [Web of Science ®] , [Google Scholar]) attributes this inconsistency to the confusion between the stock of outstanding loans at the end of period and the flow of loans taken during the period; that he calls dimensional stock-flow inconsistency. On the grounds of this criticism he modifies some flows to eliminate the problem raised by Gilányi. Binswanger (2015 Binswanger, M. 2015. “The Growth Imperative Revisited, a Rejoinder to Gilányi and Johnson.” Journal of Post Keynesian Economics 37:648–660. doi:10.1080/01603477.2015.1050333.[Taylor &; Francis Online], [Web of Science ®] , [Google Scholar]) omits this criticism because it is a simple misinterpretation of his model; rather he explains the inadequacy of Johnson’s specification of flows. Doing so, he makes believe that there is still an unsettled debate on whether to treat loans as stocks or as flows in his model. This note demonstrates that both model specifications are dimensionally stock-flow consistent. Hence, Johnson’s criticism is just a narrative behind the rationale of altering flows in the model; the controversy is not on dimensional stock-flow inconsistency but on the logically coherent specification of the magnitude of flows in the model.     

Key market values for bottled wine in an emerging market: product attributes or business strategy?

ABSTRACT

This article focuses on the emerging bottled Chilean red wine market and studies the main determinants of the consumer price of wine sold on the domestic market. A hedonic price function was estimated for a sample of 810 wines using a quantile regression (QR) model. The database contains three variable groups to explain price: objective variables (national, international and vine quality designations), subjective variables (wine score) and business strategies used by wine producers. Results show that some objective variables have a greater impact on price than the wine score (a subjective variable) and business strategies, which vary for each quartile of prices analysed. Finally, this information will allow companies to design and implement marketing strategies to inform the consumer about the importance of some variables in the price of their product.     

Does expert trust and factual knowledge shape individual's perception of science?

Explaining how individuals form their risks and benefit perceptions with regard to new technologies is a key issue in order to understand how new information disseminates. This paper examines the effect of knowledge, social values and trust in experts as shaping perceptions of risks and benefits of new technologies. Given that individual's perceptions of a technology is affected by unobserved heterogeneity, we use a methodology to disentangle the effect of a joint estimation of risks and benefit perceptions, namely seemingly unrelated probit, and we draw upon evidence from a representative survey carried out in Spain. Our findings suggest that factual knowledge and trust in experts increase perceptions of benefit of new technology developments and jointly reduce the perceptions of risk. Furthermore, reliance on traditional social values only appears to affect perceptions of benefits but does not influence risk perceptions.     

Multi‐objective crop planning using pareto‐based evolutionary algorithms

The scarcity of water is a growing problem worldwide. The increasing use of water in industrial, urban, and agricultural applications together with the continuous increase in population require the proposal of efficient solutions. In the case of agricultural use, it is necessary to not only maximize the economic benefits, but also to establish optimal water‐saving crop planning, especially for water‐deficient regions. Due to the multi‐objective nature of these problems, the decision‐making process is complex. Fortunately, the increase in computational resources available in recent years has allowed researchers to develop efficient computational algorithms to deal with real and complex optimization problems, including agricultural ones. In particular, multi‐objective evolutionary algorithms (MOEAs) are known for their ability to optimize several objective functions simultaneously to provide a representative set of the Pareto front, which is a set of problem solutions representing a trade‐off between the best values of each of the objectives. This article proposes solving a multi‐objective crop planning problem using two Pareto‐based MOEAs. Results obtained when solving this problem using real data collected from a large number of greenhouses in Spain to show the advantages of using these multi‐objective approaches.     

Sectorial differences in corporate financial behavior: an international survey

This survey-based research deals with sectorial differences in terms of three main corporate finance policies: investment, financing and dividend. We used a multinational survey that was distributed to the chief financial officers in five countries: the US, the UK, Germany, Canada and Japan. We found statistically significant differences between the nine sectors examined in terms of all the three major financial policies. These differences may be due to the following: (1) the unique financial needs and operating conditions of each sector and (2) the imitation effect according to which firms imitate the financial behavior of other firms in their sector. We found that the use of established investment appraisal techniques is most common in the construction sector and least common in the technology sector. The IRR is the most frequently used investment appraisal technique for the entire survey sample, especially in the communication sector; however, it is rarely used in the technology sector. The technology sector has the lowest level of financial leveraging, while the finance sector has the highest level. A constant sum per share is the most common dividend policy in the following sectors: retail and wholesale, services, manufacturing and transport. On the other hand, construction, energy, communication and technology sectors are characterized by a high percentage of firms that do not pay dividends at all.     

Testing the Marshall–Lerner Condition in Kenya

In this paper we examine the Marshall–Lerner (ML) condition for the Kenyan economy. In particular, we use quarterly data on the log of real exchange rates, export/import ratio and relative (US) income for the time period 1996q1‐2011q4, and employ techniques based on the concept of long memory or long‐range dependence. Specifically, we use fractional integration and cointegration methods, which are more general than standard approaches based exclusively on integer degrees of differentiation. The results indicate that there exists a well‐defined, cointegrating relationship linking the balance of payments to the real exchange rate and relative income, and that the ML condition is satisfied in the long run, although the convergence process is relatively slow. They also imply that a moderate depreciation of the Kenyan shilling may have a stabilising influence on the balance of trade through the current account without the need for high interest rates.     

Audit Hours and Unit Audit Price of Industry Specialist Auditors: Evidence from Korea

Higher audit fees associated with auditor industry specialization could represent higher unit price charged by industry specialist auditors (ISAs) or the provision of a greater quantity of audit services. This study exploits a field setting in Korea, where the disclosure of audit hours is required in company annual reports, and finds that ISAs charge significantly higher total audit fees but also expend significantly greater audit hours than non‐ISAs. When audit fees and hours are considered together, the unit audit price of ISAs is significantly lower than that of non‐ISAs. This indicates that higher total audit fees associated with ISAs are likely to be attributable to greater audit hours associated with ISAs. However, greater audit hours for ISAs may suggest higher audit quality or may simply indicate that the additional audit work performed by ISAs is conducted by relatively cheaper junior auditors. Our work provides an alternative explanation for the higher total audit fees documented in the previous studies.     

Spending more time with the customer: service-providers’ behavioral discretion and call-center operations

Service Business - The purpose of the present study was to examine service providers’ behavioral discretion regarding length of service time, and the variables that affect their discretion....