Directional analysis of consumers’ forecasts of inflation in a small open economy: evidence from South Korea

We evaluate the directional accuracy of consumers’ forecasts of inflation in predicting the movement of the actual CPI in a small open economy. In order to do so, we use a method developed by Pesaran and Timmermann (2009), based on South Korean data. By illustrating an application of the new market-timing test, we show that consumers’ expectations of inflation are not a useful predictor of the CPI in South Korea. Our findings suggest that the directional accuracy of consumers’ 1-year-ahead forecasts of inflation is not affected by the inflation targeting of the Bank of Korea. Our findings also suggest that consumers’ 1-year-ahead forecasts of inflation are scattered away from the Bank of Korea’s inflation target.     

Structural Relationships among Strategic Experiential Modules,Emotion and Satisfaction at the Expo 2012 Yeosu Korea

A structural equation model was constructed to analyze the relationship among strategic experiential modules, emotion and visitor satisfaction. For its research site, this study focused on ‘the Expo 2012 Yeosu Korea’ held in South Korea. The results of the study supported the hypothesis that the event experience is an important factor and influences visitors' level of satisfaction through emotions during the Expo. This study found that Schmitt's five types of experience indirectly affect satisfaction through positive emotional experience. The results of this study demonstrated that satisfaction not only is an issue that may be attributed to the event but also involves psychological and emotional concerns. Copyright © 2013 John Wiley & Sons, Ltd.     

Orthogonality Tests in Linear Models

This paper considers several tests of orthogonality conditions in linear models where stochastic errors may be heteroskedastic or autocorrelated. It is shown that these tests can be performed with Wald statistics obtained from simple auxiliary regressions.     

Spatially Optimal Allocation of Investments: An Application of the Dynamic Multiregional Social Accounting Matrix

This paper analyzes the effect of regional income disparity on the allocation of investments using a dynamic multiregional Social Accounting Matrix (SAM) model. The optimal shares of total investments required to achieve the most balanced regional growth under the constraint of a 5% fixed annual economic growth rate were 37.74% for the Capital region, 18.83% for the Southeast region, 15.92% for the Central region, 13.90% for the East region and 13.61% for the West region. This policy requires an additional investment of 1.37% of the GDP, bringing about a 52.2% reduction in regional income disparity in terms of the Atkinson index. This implies that the decentralization of investment expenditures to less developed regions would lead to a substantial gain in regional income equity, on the one hand, and to the loss of cost effectiveness in investments, on the other.     

Dimensions of Luxury Brand Personality: Scale Development and Validation

Both the marketing industry and academia have been paying more attention to the growth and potential of the luxury market. This research developed a theoretical framework for understanding the dimensions of luxury brand personality and a reliable and valid scale that measures these dimensions. When 30 luxury brands, ranging from fashion to automobile and retail, were assessed on a set of diverse personality attributes, six dimensions representing luxury brand personality were identified: Excitement, Sincerity, Sophistication, Professionalism, Attractiveness, and Materialism. Findings indicate that while three dimensions, Sincerity, Excitement, and Sophistication, share similar qualities with those identified in Aaker's (1997) scale for general brand personality, the other three dimensions, Professionalism, Attractiveness, and Materialism, reflect meanings unique and specific to luxury brands. Altogether, the results of this research hold the notion that luxury brands serving as consumption symbols provide both utilitarian benefits and symbolic meanings to contemporary consumers.     

Racial differences in self-employment exits

Using detailed work history data in the 1979 National Longitudinal Survey of Youth, I investigate the reasons behind the racial gap in self-employment. My analysis of an “age uniform” sample of men, all of whom are observed from age 22 to 40 years, reveals that racial differences in cross-sectional self-employment rates are largely due to the fact that minority workers’ self-employment spells are relatively short-lived. Moreover, I find that minority workers’ relatively high exit rates are driven primarily by transitions to nonemployment. Estimates from a multinomial logit model of self-employment exits suggest that minority workers’ weak attachment to the labor market prior to entering self-employment is an important determinant of their transition from self-employment to nonemployment, while lack of prior industry and self-employment experience contributes to minorities’ transitions to wage employment. When I assign blacks and Hispanics the same (mean) work histories as whites, the predicted black–white gap in the first-year self-employment survival rate decreases by 31% and the Hispanic–white gap decreases by 14%.     

A parametric nonlinear model of term structure dynamics

Recent nonparametric estimation studies pioneered by Ait-Sahaliadocument that the diffusion of the short rate is similar tothe parametric function, r^1.5, estimated by Chan et al., whereasthe drift is substantially nonlinear in the short rate. Theseempirical properties call into question the efficacy of theexisting affine term structure models and beg for alternativemodels which admit the observed behavior. This article presentssuch a model. Our model delivers closed-form solutions for bondprices and a concave relationship between the interest rateand the yields. We show that in empirical analyses, our modeloutperforms the one-factor affine models in both time-seriesas well as cross-sectional tests.     

DURATION OF UNEMPLOYMENT IN SPAIN: RELATIVE EFFECTS OF UNEMPLOYMENT BENEFIT AND FAMILY CHARACTERISTICS

ABSTRACT We estimate the effects of unemployment benefit and family situation on the unemployment duration in Spain. Empirical results indicate that the distinctions between the exits into employment and the exits from the labour force and between men and women are important. Although unemployment benefit reduces significantly the job-finding probabilities, its effects are much larger on exits from the labour force. Many people who decide to go out of the labour force delay their exits until they exhaust their unemployment benefits. Family situation also has strong effects on the duration of unemployment in Spain. Household heads have about twice larger job-finding probability than non-heads, and having a working household head or other working household members improves employment probability. This suggests that family connections in the labour market are important determinants of unemployment duration in Spain.     

Option Pricing When Jump Risk Is Systematic1

This paper generalizes the Merton jump-diffusion option pricing model to the case in which jump risk cannot be eliminated in the market portfolio. the option pricing formula is obtained using a general equilibrium asset pricing model. Since jump risk is systematic, the correlation of the underlying stock's jump with the market portfolio's jump affects the option price.