scholarly journals EXTENDING THE ROTTERDAM DEMAND MODEL TO ANALYZE MARKET PARTICIPATION

2018 ◽  
Vol 50 (2) ◽  
pp. 212-232
Author(s):  
JINGHUA XIE ◽  
ØYSTEIN MYRLAND
Keyword(s):  
Extended Model ◽  
Demand Model ◽  
Market Participation ◽  
Generic Advertising ◽  
Household Data ◽  
Proportionate Change ◽  
Short Run ◽  
Rotterdam Model ◽  
Consumption Intensity ◽  
Product Weight

AbstractThe dependent variable in the Rotterdam model is shown to consist of two additive components: the proportionate change in the average product weight consumed by existing buyers and the proportionate change in the share of total consumers who actually purchase the product. Applying the extended model to household data on salmon consumption in France, results suggest prices have a larger effect on attracting new buyers to the product in question than on getting existing buyers to consume more. However, generic advertising was found to affect consumption intensity but have no effect on market participation in the short run.

Housing Prices and Money Demand: Empirical Evidence in Selected MENA Countries

2019 ◽  
Vol 15 (1) ◽  
Author(s):  
Nadia Mbazia ◽  
Mouldi Djelassi
Keyword(s):  
Money Demand ◽  
House Prices ◽  
Housing Prices ◽  
House Price ◽  
Structural Features ◽  
Demand Model ◽  
Mena Countries ◽  
Long Run ◽  
Short Run ◽  
Dynamic Relationships

Abstract This paper examines the links between housing and money empirically in a money demand framework for a panel of five Middle East and North Africa (MENA) countries using quarterly data from 2007Q3 to 2014Q4 with the inclusion of house prices as a variable representing the developments in housing markets. We applied the Pool Mean Group Estimation technique to estimate the long-run and short-run dynamic relationships in money demand model. Empirical results provide the evidence that higher house prices lead to a rise in M2 demand in long-run and short-run estimations. This finding may explain the importance influence of the house price developments on monetary policy in MENA countries. The results confirm that the cross-country heterogeneity of money holdings is also connected with structural features of the housing market.

Exchange rate effect on money demand in Pakistan

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Iffat Zehra ◽  
Muhammad Kashif ◽  
Imran Umer Chhapra
Keyword(s):  
Exchange Rate ◽  
Money Demand ◽  
Demand Model ◽  
Content Type ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Non Linear ◽  
Short Run ◽  
Nardl Model

PurposeThis paper aims to examine association of money demand with key macroeconomic variables in Pakistan. The paper also investigates the asymmetric effect of real effective exchange rate (REER) on money demand.Design/methodology/approachThe study employs both linear autoregressive distributed lag (ARDL) and non-linear autoregressive distributed lag (NARDL) model. Annual data from 1970 to 2018 is used which is subjected to non-linearity through partial sum concept. Empirical analysis is conducted to prove if money demand is influenced by currency appreciation or depreciation, for long and short run.FindingsCointegration test indicates existence of a long-run relationship between money demand and its determinants. Results from NARDL model suggest negative relation between money demand and inflation in long and short run. Real income shows positive but a very minimal and insignificant effect on money demand in long and short run. Impact of call money rates is statistically significant and negative on M1 and M2. Wald tests and differing coefficient sign confirm presence of asymmetric relation of REER in long run with M2, whereas in short run we observe a linear, symmetrical relation of REER with M1 and M2. Stability diagnostic tests (CUSUM and CUSUMSQ) verify stability of M2 demand model in Pakistan.Practical implicationsResults signify that role of money demand is imperative as a monetary policy tool and it can be utilized to achieve objective of price stability. Additionally, exchange rate movements should be critically examined by monetary authorities to avoid inflationary pressures resulting from an increase in demand for broad monetary aggregate.Originality/valueThe paper contributes to scarce monetary literature on asymmetrical effects of exchange rate in Pakistan. Impact of variables has been studied through linear approach, but this paper is unique since it attempts to explore non-linear relationships.

BANKING, LIQUIDITY EFFECTS, AND MONETARY POLICY

2017 ◽  
Vol 22 (5) ◽  
pp. 1267-1297
Author(s):  
Te-Tsun Chang ◽  
Yiting Li
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Financial Intermediation ◽  
Extended Model ◽  
Stabilization Policy ◽  
Money Stock ◽  
Nominal Interest Rates ◽  
Short Run

We study liquidity effects and monetary policy in a model with fully flexible prices and explicit roles for money and financial intermediation. Banks hold some fractions of deposits and money injections as liquidity buffers. The higher the fraction kept as reserves, the less liquid the money is. Unexpected money injections raise output and lower nominal interest rates if and only if the newly injected money is more liquid than the initial money stocks. If banks hold no liquidity buffers, liquidity effects are eliminated. In an extended model with temporary shocks, we show that failure to withdraw state-contingent money injections does not make the stabilization policy neutral, though the economy may undergo higher short-run fluctuations than otherwise. Under this circumstance, the success of stabilization policy relies on unexpected money injections being more liquid than the initial money stock.

Online hotel demand model and own-price elasticities: An empirical application in a mature resort destination

2018 ◽  
Vol 25 (5) ◽  
pp. 670-694 ◽  
Author(s):  
Aldric Vives ◽  
Marta Jacob ◽  
Eugeni Aguiló
Keyword(s):  
Demand Function ◽  
Pricing Strategies ◽  
Demand Model ◽  
Price Elasticities ◽  
Mass Tourism ◽  
Long Run ◽  
Short Run ◽  
High Season ◽  
The Common ◽  
Resort Hotels

Pricing is a basic strategic tool in hotel revenue management (RM). This study proposes a particular demand function model for resort hotels for measuring their own-price elasticities, along with the different seasonal demands, and across the booking horizons. The model is applied to the online transient demand for two hotels in Majorca – a well-known, mature mass tourism destination – in order to estimate and compare different elasticities, which could be used by RM departments to correctly manage prices in the short run and establish optimum pricing strategies (over the medium and long run). The results show that the two hotels display completely different own-price elasticities during high season, while during low season, demand is quite inelastic at both hotels; secondly, common price variations among seasons or hotels may sometimes be an erroneous pricing strategy, such as the common early booking strategy. The model is easily adaptable to different hotels.

scholarly journals The Potential for High-Value Agricultural Products Under the North American Free Trade Agreement: The Case of Beef in Mexico and Canada: Comment

1996 ◽  
Vol 28 (2) ◽  
pp. 453-454 ◽  
Author(s):  
Jong-Ying Lee ◽  
Mark G. Brown
Keyword(s):  
Free Trade Agreement ◽  
Trade Agreement ◽  
Ratio Test ◽  
Demand Model ◽  
The North ◽  
Demand Models ◽  
Beef Products ◽  
Rotterdam Model ◽  
Demand Equations ◽  
Lagrange Multiplier Tests

In his recent article, Onianwa used the absolute price version of the Rotterdam demand model to estimate Mexican and Canadian import demands for U.S. beef products. The specification of the Rotterdam model allows straightforward testing of the basic theoretical properties of demand. Based on theory, a system of demand equations should obey adding up, homogeneity, symmetry, and negativity (Theil 1971, 1975; Deaton and Muellbauer). Adding up is guaranteed or automatically satisfied in the Rotterdam model and other similar demand models like the almost ideal demand system (AIDS). Hence, adding up cannot be tested. Negativity can be checked by calculating the eigenvalues of the Rotterdam Slutsky matrix (all eigenvalues should be nonpositive). The remaining two properties, homogeneity and symmetry, can be straightforwardly tested by using the likelihood ratio test, as in the present paper, or the Wald or Lagrange multiplier tests; homogeneity can also be tested separately for each demand equation using the F-test.

scholarly journals Accelerating progress on effective tobacco tax policies in Montenegro

2020 ◽  
Vol 29 (Suppl 5) ◽  
pp. s293-s299
Author(s):  
Ana Mugosa ◽  
Mirjana Cizmovic ◽  
Tanja Lakovic ◽  
Milenko Popovic
Keyword(s):  
Time Series ◽  
Price Elasticity ◽  
Low Income ◽  
Direct Impact ◽  
Demand Model ◽  
Middle Income ◽  
Aggregated Data ◽  
Distributed Lag ◽  
Tobacco Tax ◽  
Short Run

BackgroundThe objective of this study is to estimate the sensitivity of cigarette quantity demanded to price and income changes in Montenegro.Data and methodsThe sensitivity of cigarette quantity demanded to price and income changes was estimated using micro and macro analysis. Micro analysis implied the use of Deaton’s model on Household Budget Survey data (2006–2017). In macro analysis, conventional static demand model is applied using error correction and autoregressive distributed lag time series methodology on annual time series aggregated data (2001–2017).ResultsThe same results were obtained using micro and macro analysis which contributes to the objectivity of the conducted research. Results derived from the Deaton’s model indicate a negative price elasticity of cigarettes in the range between −0.62 and −0.80 (conditional and unconditional), while in macro model estimated price elasticity is in that range and equals −0.68. Simulation results confirm the efficiency of excise tax policy changes, having an evident decrease in consumption and increase of public revenues.ConclusionAnalysis of the tobacco market and regulatory environment suggests that the increase of excise and other taxes on tobacco have an important direct impact on the reduction of cigarettes and other tobacco products consumption. Our estimates of long and short-run price elasticity show that direct impact is strong and very much in accordance with the results obtained so far for other low-income and middle-income countries. This paper gives a contribution to the analysis of price elasticity of demand for cigarettes, which was for the first time conducted in Montenegro.

scholarly journals Demographic Versus Media Advertising Effects on Milk Demand: The Case of the New York City Market

1986 ◽  
Vol 15 (1) ◽  
pp. 66-74 ◽  
Author(s):  
Henry Kinnucan
Keyword(s):  
New York ◽  
New York City ◽  
York City ◽  
Demographic Factors ◽  
Demand Model ◽  
Generic Advertising ◽  
Advertising Effect ◽  
Net Returns ◽  
Nonwhite Population ◽  
Fluid Milk

An advertising-sales response model is extended to include the effects of demographic factors (age and race) as additional determinants of milk demand. Previous research indicates that the age structure of a population and its racial composition are primary factors influencing fluid milk sales. Failure to incorporate these factors in the milk demand model results in a 30 percent downward biased estimate of the advertising effect. Consequently, the economic effectiveness of milk advertising is understated when the effects of demographic variables are ignored. Changes in demographic factors (growing nonwhite population and shrinking teenage market) appear to explain the relatively flat trend in per capita milk sales in the New York City market over the period 1971–80—a period in which dairy producers spent $12 million on generic advertising of milk. Net returns to Federal Order 2 dairy farmers from generic advertising of fluid milk is estimated to average $6.07 per media dollar invested over the 1972–79 period.

Different Forms of Work Satisfaction

1998 ◽  
Vol 3 (3) ◽  
pp. 209-218 ◽  
Author(s):  
André Büssing ◽  
Thomas Bissels
Keyword(s):  
Work Satisfaction ◽  
Preliminary Evidence ◽  
Qualitative Approach ◽  
Extended Model ◽  
Work Situation ◽  
Structured Interviews ◽  
Global Satisfaction ◽  
Evaluative Processes ◽  
The Right ◽  
Level Of Aspiration

The extended model of different forms of work satisfaction ( Büssing, 1991 ), originally proposed by Bruggemann (1974) , is suggested as a distinctive qualitative approach to work satisfaction. Six forms of work satisfaction—progressive, stabilized, resigned satisfaction, constructive, fixated, resigned dissatisfaction—are derived from the constellation of four constituent variables: comparison of the actual work situation and personal aspirations, global satisfaction, changes in level of aspiration, controllability at work. Preliminary evidence from semi-structured interviews with 46 nurses shows that the dynamic model is headed in the right direction (qualitative differentiation of consistently high propertions of satisfied employees, uncovering processes of person-work situation interaction). Qualitative methods demonstrated their usefulness in accessing underlying cognitive and evaluative processes of the forms, which are often neglected by traditional attitude-based satisfaction research.

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