Carriers’ pricing behaviors in the United States airline industry

This paper examines the pricing behaviors of United States air carriers in domestic markets. With quarterly observations in 2000 and 2005, we use a heteroskedasticity-adjusted Instrumental Variable technique to investigate the carriers’ pricing strategies. The results show differential pricing strategies practiced by United States air carriers. American, United, Continental, and Northwest Airlines have higher airfares than Delta and Southwest Airlines in 2005. In 2000, all the carriers, except Delta have the same relationships with airfares. Furthermore, the findings suggest that the carriers’ pricing strategies can vary under the same market condition, indicating that carriers’ managerial decisions may influence their airfares.     

Trade and access to finance of SMEs: is there a nexus?

Limited resources and barriers to entry are critically higher for small and medium enterprises (SMEs) than for large companies. One of the reasons explaining why the resources of SMEs are scarce is their limited access to financial services. This in turn reduces the likelihood of exporting. For this reason, using the census of SMEs done by the Central Bank of Egypt and the Egyptian Banking Institute, we try to examine the impact of access to finance on their export performance. We measure the latter by the extensive margin that means the probability of becoming an exporter and the probability of serving several markets. We found a significant and positive impact of dealing with banks and having banking facilities on the probability of exporting and that of exporting to more than one destination. Thus, wider and more efficient financial services are likely to increase the number of exporters and boost exports’ diversification.     

Compositional data analysis and zeros in micro data

The application of compositional data analysis methods in economics has some attraction. The methodology relies upon the use of 'log-ratios' in the statistical analysis. Such an approach is not possible when the data to be analysed include observations where the observed budget share is zero. We, therefore, consider and extend the methods of compositional data analysis in the situation where the data to be analysed include observations where the observed budget share is zero. The modified compositional data methods are discussed both in statistical terms and through potential economic interpretations of the method. Further, the modified methodology is applied to the 1988-89 Australian Household Expenditure Survey yielding estimates for a system of Engel curves.     

The out-of-sample forecasting performance of nonlinear models of regional housing prices in the US

This article provides out-of-sample forecasts of linear and nonlinear models of US and four Census subregions’ housing prices. The forecasts include the traditional point forecasts, but also include interval and density forecasts, of the housing price distributions. The nonlinear smooth-transition autoregressive model outperforms the linear autoregressive model in point forecasts at longer horizons, but the linear autoregressive and nonlinear smooth-transition autoregressive models perform equally at short horizons. In addition, we generally do not find major differences in performance for the interval and density forecasts between the linear and nonlinear models. Finally, in a dynamic 25-step ex-ante and interval forecasting design, we, once again, do not find major differences between the linear and nonlinear models. In sum, we conclude that when forecasting regional housing prices in the United States, generally the additional costs associated with nonlinear forecasts outweigh the benefits for forecasts only a few months into the future.