Modelling public expenditure: empirical evidence from five countries

This artice considers the trends in the public expenditure/GDP ratio over the last 28 years or so, in five countries: Cyprus, France, Greece, the UK and the USA. An empirical investigation incorporating both economic and political variables is conducted into the observed pattern of the ratio for the five countries. Our results suggest that whilst some of the host of factors advanced as explanations for the size and growth of the public sector exert a significant influence, the ‘relative price effect’ tends to dominate. The results also suggest strongly that the notable short-run fluctuations in the ratio are explained in terms of political displacement effects and economic crises considerations. Moreover, the contrasting political and economic climates of the countries in question serve to help highlight the role which political cultures play in the determination of public expenditure.     

Hedonic analysis of a housing market in disequilibrium

This paper tests the hypothesis that information about housing market activity and about specific dwellings becomes capitalized into single family dwelling prices through a disequilibrium adjustment process. A dynamic price adjustment model, which is an extension of the standard hedonic model widely used in the literature, is derived, specified, and tested with both micro and aggregated data from the city of Chicago and for the period 1972–1976. The results show that from 32 to 75% of the variance in dwelling prices, unexplained by the standard hedonic attributes under assumptions of equilibrium, is explained by market activity signals such as mortgage interest rates and neighborhood transaction rates of the preceding period. Dwellings about which there is less information, making comparison pricing difficult, are shown to command a price premium. The standard equilibrium hypothesis appears readily rejectable and better predictions are obtained from the disequilibrium specifications. Several directions for extending this line of research are discussed.     

Heterogeneous inflationary expectations,Fisher's theory of interest and the allocative efficiency of the bond market

This letter considers the consequences of heterogeneous inflationary expectations for Fisher's theory of interest. It is further shown that divergent and erroneous expectations cause welfare losses which increase when either the variance of expectations or of actualinflation increase.     

Citizen attitude and expectation towards greenspace provision in compact urban milieu

Residents’ views are pertinent in urban-park design and management, yet they are often ignored. Social-empirical studies could enhance socially relevant park design. As a compact city, Hong Kong's limited greenspaces are often too small, surrounded by incompatible activities, and fail to meet user demands and expectations. This study explores the response of citizens living in the crowded urban milieu to inadequate greenspace provision. A questionnaire survey gleaned opinion from residents in representative residential neighbourhoods in old city and new towns. Green sites are appreciated more for pragmatic microclimatic and amenity benefits than social and high-order environmental functions. The principal limitations are deficiency in sports facilities and greenery. Respondents favour more trees, dispersed seating design and large parks. The preferences are mainly related to age, income, education and retirement status. The high-density living milieu may have weakened attitude and perception towards urban nature. The findings could inform public policies and programmes on urban parks. They call for an institutional restructuring to facilitate active public engagement in greenspace planning and management.