Tomato Farmers and Modernising Value Chains in Indonesia

The tomato value chain in Indonesia has transformed in the last two decades. We assess this transformation here, focusing on small tomato farmers in West Java and the determinants of their market-channel choices (as well as the technology correlates of those choices). These farmers sell to traditional village traders, urban and modern wholesalers, and supermarkets, and they have all invested heavily in irrigation and rely on external inputs. We find differences among farmers selling to different market channels. To wit, non-land assets—especially irrigation—are important to farmers participating in the supermarket, or modern, channel, but farm size affects modern-channel participation only in high-level commercial zones (zones dense in infrastructure and near highways). We also find that modern-channel farmers earn more profit than farmers in other channels but do not necessarily use chemicals more intensively. Yet hardly any farmers sell graded tomatoes; the main ‘capture of rents’ goes to specialised and modernising wholesalers.     

HEDGING WITH INTERNATIONAL STOCK INDEX FUTURES: AN INTERTEMPORAL ERROR CORRECTION MODEL

In this paper we extend the traditional price change hedge ratio estimation method by applying the theory of cointegration to hedging with stock index futures contracts for France (CAC 40), the United Kingdom (FTSE 100), Germany (DAX), and Japan (NIKKEI). Previous studies ignore the last period's equilibrium error and short-run deviations. The findings of this study indicate that the hedge ratios obtained from the error correction method are superior to those obtained from the traditional method as evidenced by the likelihood ratio test and out-of-sample forecasts. Using the procedures developed in this paper, hedgers can control the risk of their portfolios more effectively at a lower cost.     

A sequential approach to testing for structural change in econometric models

The paper shows that the sequential approach to testing econometric models, particularly testing for structural change, is both feasible and potentially very useful. In fact, this paper makes clear the possibility of using the sequential approach as suggested by Dhrymes et al. (1972) and shows that the statistical dependence between successive tests can be overcome in some cases.Helpful comments by David Hendry, Grayham Mizon and Jan Kiviet, on an earlier version of a related Paper, are gratefully acknowledged.     

An Efficient Pursuit? Independent Shopkeeping in 1930s Britain

During the 1930s, the small-scale retailer was regarded by manycommentators as being responsible for the apparent inefficienciesof the retail trade in Britain. Using a range of documentaryevidence from the period, this article draws attention to debateon the merits of large- and small-scale retailers, highlightinga concern for the latter’s contribution to wider communitywell-being and to developments in retail trade practices. Therelative inefficiency of the small trader was frequently explainedin relation to a lack of awareness of sound shop management.Consequently, emphasis was placed by commentators on the needfor small traders to enhance their knowledge of retail managementpractices in order to improve their own competitive positionand efficiency in the retail trade more widely. Both the popularand trade press offered small traders a range of advice thatwas intended to improve their fortunes. This article considersthe form and content of such advice.     

Are Momentum Profits Robust to Trading Costs?

We test whether momentum strategies remain profitable after considering market frictions induced by trading. Intraday data are used to estimate alternative measures of proportional and non-proportional (price impact) trading costs. The price impact models imply that abnormal returns to portfolio strategies decline with portfolio size. We calculate break-even fund sizes that lead to zero abnormal returns. In addition to equal- and value-weighted momentum strategies, we derive a liquidity-weighted strategy designed to reduce the cost of trades. Equal-weighted strategies perform the best before trading costs and the worst after trading costs. Liquidity-weighted and hybrid liquidity/value-weighted strategies have the largest break-even fund sizes: $5 billion or more (relative to December 1999 market capitalization) may be invested in these momentum strategies before the apparent profit opportunities vanish.     

Testing for serial correlation in simultaneous equation models: Some further results

In this paper approximate counterparts of the exact tests earlier proposed by the authors are examined. Type 1 error probabilities and test powers are estimated and compared using Monte Carlo experiments. The effect on the Type 1 error probabilities of the misspecification which results when serial correlation is present elsewhere in the system is also investigated.     

The response of fertility to the expectations of death: implications for the demographic transition

The authors present an economic explanation for the first stage of events often experienced by a society entering the demographic transition, namely, declining death rates coupled with high or rising birth rates. The explanation is based on the response of fertility to the expectation of child death and on a distinction between actual and desired family size