Tourism and economic development in a cash-in-advance economy

This paper examines the impact of tourism on welfare in a cash-in-advance economy. As a result of the expansion in tourism, the price of the non-traded good increases. This gives rise to a terms-of-trade improvement. However, the cash-in-advance constraint causes a distortion in consumption. For tourism demand, where the gain from the terms-of-trade improvement dominates (does not dominate) the loss from the consumption distortion, tourism is welfare-improving (welfare-reducing). A similar condition for welfare improvement (deterioration) holds for a model of capital inflow and endogenised tourism.     

Comparison of four common data collection techniques to elicit preferences

We compare four common data collection techniques to elicit preferences: the rating of items, the ranking of items, the partitioning of a given amount of points among items, and a reduced form of the technique for comparing items in pairs. University students were randomly assigned a questionnaire employing one of the four techniques. All questionnaires incorporated the same collection of items. The data collected with the four techniques were converted into analogous preference matrices, and analyzed with the Bradley–Terry model. The techniques were evaluated with respect to the fit to the model, the precision and reliability of the item estimates, and the consistency among the produced item sequences. The rating, ranking and budget partitioning techniques performed similarly, whereas the reduced pair comparisons technique performed a little worse. The item sequence produced by the rating technique was very close to the sequence obtained averaging over the three other techniques.     

Discretionary enforcement and strategic interactions between enforcement agencies and firms: a theoretical and laboratory investigation

This paper presents a game theoretic morphological analysis of the strategic interactions between environmental enforcement authorities and polluting firms. The models explore the role of discretion that such authorities enjoy, either in deciding how to pursue environmental violations (investigative and prosecutorial discretion) or in judging them (judicial discretion). The purpose is to identify both the optimal firms’ behaviour in terms of compliance, and the enforcement authorities’ optimal strategies in terms of enforcement actions to undertake. Consistent with the setting of the game theoretic models, the role of the enforcement agencies in deterring firms from polluting is, then, empirically tested by means of laboratory experiments. Laboratory evidence on compliance behaviour of firms when faced with enforcement conditions predicted by the theoretical models set up is discussed for the different experimental treatments performed. Overall, we suggest that making environmental enforcement less predictable for the firms, and thus creating a degree of uncertainty for the violators, can actually encourage deterrence and, thus, improve compliance. Thus, a partly unpredictable enforcement strategy may generate more compliance than an environmental policy that is known with certainty in advance.     

Resale and Collusion in A Dynamic Market for Semidurable Goods

The paper studies the incentives to form collusive agreements when goods can be traded in second‐hand markets. It will be shown that such incentives crucially depend on the rate of depreciation of the durable good and on consumer heterogeneity. The main contribution of the paper shows that an active second‐hand market may strengthen the incentives to collude, as do policies that affect the functioning of the second‐hand market (e.g., leasing policy and buy‐back). It will also be argued that the oligopoly incentives to adopt strategies that strengthen collusion often differ from the monopoly incentives to increase profits.     

Equilibrium Unemployment Rate and Customs Union

This paper utilizes the macroeconomics concept of the equilibrium rate of unemployment for theorems on free trade and the formation of customs union. The notion of an equilibrium rate of unemployment appears in the literature on labour, macroeconomics, business cycles and trade theory. Such an equilibrium rate can be derived in a number of ways, for example, by introducing labor–leisure choice in the utility functions of the workers; a labor turnover model and/or by introducing shirking. We extend the two sector-two factor Heckscher–Ohlin–Samuelson model for a small open economy by relaxing the assumption of inelastic labor supply. Specifically, we consider the classical labor supply function obtained from the representative consumer's utility maximisation problem. This consideration allows for the existence of unemployment and we analyse the effects trade policies have on the equilibrium unemployment rate. Given the movement towards free trade (either via the implementation of GATT and/or formation of customs union) it is important to examine its implications for the equilibrium rate of unemployment.     

The stability of money demand in the long-run: Italy 1861–2011

Money demand stability is a crucial issue for monetary policy efficacy, and it is particularly endangered when substantial changes occur in the monetary system. By implementing the ARDL technique, this study intends to estimate the impact of money demand determinants in Italy over a long period (1861–2011) and to investigate the stability of the estimated relations. We show that instability cannot be excluded when a standard money demand function is estimated, irrespectively of the use of M1 or M2. Then, we argue that the reason for possible instability resides in the omission of relevant variables, as we show that a fully stable demand for narrow money (M1) can be obtained from an augmented money demand function involving real exchange rate and its volatility as additional explanatory variables. These results also allow us to argue that narrower monetary aggregates should be employed in order to obtain a stable estimated relation.     

Determinants of non-life insurance expenditure in developed and developing countries: an empirical investigation

The determinants of non-life insurance expenditure in a panel data set covering 36 developed countries and 31 developing countries for the period 2000–2011 are analysed. Results of our instrumental variable analysis indicate that economic freedom, income, bank development, urbanization, culture and law systems are the key drivers of the non-life insurance expenditure across countries. However, their impacts differ significantly between the groups of developed and developing countries, suggesting that the heterogeneity among countries in terms of the level of development plays an important role. The global financial crisis is also found to influence the direction of those effects, especially in developed countries. The article yields useful policy and economic implications for governments and multinational non-life insurance companies with regard to the development of the non-life insurance sector, an important engine for economic growth and prosperity.     

Tourism satisfaction and perspectives: an exploratory study in Italy

Quality & Quantity - The aim of the paper is to analyze the specific features of tourism in Italy through tourists’ behaviour and satisfaction level and to individuate future...     

How does public service motivation affect teacher self-reported performance in an education system? Evidence from an empirical analysis in Italy

Quality & Quantity - This paper deals with self-reported teacher performance, and the starting point is the relationship between teacher performance and the main determining factor, public...     

TOURISM, TRADE AND DOMESTIC WELFARE

Abstract.  Tourism has been regarded as a major source of economic growth and a source of foreign exchange. It has also been viewed as an activity that imposes costs on the host country. Such costs include increased pollution, congestion and despoliation of fragile environments, and intra-generational inequity aggravation. One aspect that has been ignored is the general equilibrium effects of tourism on other sectors in the economy. This paper presents a model that captures the interdependence between tourism and the rest of the economy, in particular agriculture and manufacturing. An important result obtained is that the tourist boom may 'immiserize' the residents.