Applications of robust estimation techniques in demand analysis

Estimates are presented of the demand for tobacco in Italy in the context of a demand system approach. The grouping of goods is based on Varian's non-parametric test for weak separability. The parametric demand model is Banks, Blundell and Lewbel's QUAIDS model, which combines the empirical flexibility of quadratic logarithmic Engel curves with integrability. Estimation is by iterative GMM procedure. The estimates are used in an analysis of welfare-improving tax reforms which incorporates distributional data. The results are discussed with respect to the special features of the Italian tobacco market.     

Export taxes and sectoral economic growth: evidence from cotton and yarn markets in Pakistan

Pakistan used an export tax on raw cotton from 1988-1995 in order to suppress the internal price of cotton to benefit the domestic yarn industry. An analysis was conducted to estimate the impact of this policy on both the cotton and yarn sectors. These effects were simulated using the results ol a structural econometric model of these sectors of Pakistan's economy Results indicated that the export tax had a negative impact on the growth rale in the cotton sector, while having little or no impact on the yarn sector. Thus, the export lax did not achieve its objective of increasing the growth rate of value-added (yarn) production above what would have occurred naturally.     

Valuation effects of earnings management on hotel firm value

This study investigates the valuation effects of earnings quality on a hotel’s firm value between 1991 and 2017. A unique perspective from the financial crisis period is utilized to explore the changes further when hotel firms face financial distress. We adopt the ordinary least squares (OLS) regression method in this study. Generalized Least Squares (GLS) regression and Petersen’s Clustered Standard Error Model to confirm the validity of results. Seemingly unrelated regressions (SUR) analysis is adopted to compare the impact of the financial crisis on subsamples of low and high Altman Z-scores and subsamples of non-Big-4 and Big-4 firms. Substantial evidence supports our assertion that increased discretionary accruals and earnings management bring down earnings quality and, in turn, decrease a hotel’s firm value. Results reinforce that the 2008 financial crisis had an impact on the relationship between earnings management and hotel firm value. The negative effect that discretionary accruals and earnings management have on hotel firm value is mitigated for hotel firms with low credit strength or not audited by one of the Big-4 firms. Stockholders of hotel firms should be aware of the impact and enforce additional measures to control earnings management activities during a financial crisis.     

Investigating the importance and cognitive satisfaction attributes of service quality in restaurant business - a case study of TASTy steakhouse in Taiwan

ABSTRACT

In this research, we proposed an effective approach to investigate the importance and satisfaction attributes of service quality of a restaurant business. For understanding the gaps of service quality cognition between consumers and servers, our work can be used as a reference for helping restaurants improve their service quality and reuse their resources effectively. We applied DINESERV scales and five-point Likert scales as quantitative research tools. The Kano model, customer satisfaction index, regression analysis, improvement effort index, and importance-performance analysis (IPA) were applied as measurement tools to examine the importance of various service attributes. Our approach was implemented in a famous restaurant in Taiwan: TASTy Steakhouse. The relative priority of service quality attributes for improving this chain restaurant and its competitiveness are ranked and discussed.     

Exports and antitrust: Complements or substitutes?

Conflicting arguments have recently been voiced concerning the impact of antitrust statutes on the export performance of U.S. industries. On the one hand, opponents of vigorous enforcement have argued that antitrust constraints prevent firms from achieving efficiencies, thereby hampering competitiveness on world markets. On the other hand, proponents of antitrust have argued that vigorous enforcement tempers monopolistic pricing, thereby improving export performance. This paper presents an empirical test of these competing arguments. Our results indicate that Sherman Act Section 1 (price-fixing) enforcement has a positive effect on export shares, while Clayton Act Section 7 (merger) enforcement appears to have a negative effect.     

Rationality,specification tests,and macroeconomic models

Rational expectation models embody cross-equation restrictions that are implied by the theory of rational expectations. In this paper we illustrate how tests of these restrictions may be implemented in terms of general macroeconomic models by employing the models of Taylor and Sargent as examples. In addition, the more important issue of the proper interpretation of the results of these tests is addressed. We contend that tests for rationality should become part of the model-building process as they are akin to specification tests for models in which rational expectations is treated as the maintained hypothesis. A procedure is suggested when the restriction are inconsistent with data. Special emphasis is placed upon examining how changes in specifications of the model's exogenous variables can influence test results.     

FOREX Risk: Measurement and Evaluation Using Value‐at‐Risk

Abstract:   We measure and evaluate the performance of a number of Value‐at‐Risk (VaR) methods using a portfolio based on the foreign exchange exposure of a small open economy (Ireland) among its trading partners. The sample period highlights the changing nature of Ireland's exposure to risk over the past decade in the run‐up to EMU. Our results offer an indication of the level of accuracy of the various approaches and discuss the issues of models ensuring statistical accuracy or more conservative leanings. Our findings suggest that the Orthogonal GARCH model is the most accurate methodology while the EWMA specification is the more conservative approach.