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.

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.

scholarly journals Financial Development and Money Demand Function: Cointegration, Causality and Variance Decomposition Analysis for Pakistan

2017 ◽  
Vol 18 (4) ◽  
pp. 811-824 ◽  
Author(s):  
Muhammad Ahad
Keyword(s):  
Exchange Rate ◽  
Financial Development ◽  
Money Demand ◽  
Industrial Production ◽  
Unit Root ◽  
Demand Function ◽  
Decomposition Analysis ◽  
Money Demand Function ◽  
Long Run ◽  
Short Run

This study has investigated money demand function incorporating financial development, industrial production, income and exchange rate for Pakistan for time span from 1972 to 2012. Bayer–Hanck combined cointegration and Johansen cointegration approaches have been used to test cointegration among variables and vector error correction model (VECM) approach has been applied to explain the direction of causality in the long run and short run. Unit root problem has been tested by augmented Dickey–Fuller (ADF) and Phillips–Perron (PP) unit root tests. The results indicate that feedback effect is found between financial development and money demand. There is a long-run relationship existing among money demand, financial development, income, industrial production and exchange rate. Financial development is the main factor to determine money demand function in both long run and short run.

Innovations in Law

2020 ◽  
pp. 317-347
Author(s):  
B. Zorina Khan
Keyword(s):  
Common Law ◽  
Adjustment Costs ◽  
The United States ◽  
Legal Rules ◽  
Disruptive Technologies ◽  
Socioeconomic Changes ◽  
Long Run ◽  
Short Run ◽  
The Common

Administered systems involve regulation, while efficient markets in ideas require secure property rights and appropriate adjacent institutions. Disruptive technologies typically lead to institutional bottlenecks, which then require accommodations in legal rules and their enforcement. U.S. policy toward innovation and enterprise has always been distinguished by the central role of law and the judiciary. The evolution of legal rules and standards in the United States reveals a remarkable degree of flexibility and responsiveness to innovations. In the short run, the common law economized on legal adjustment costs through “adjudication by analogy,” whereas, in the long run, socioeconomic changes wrought by major inventions ultimately produced more fundamental adjustments in adjacent institutions. This institutional elasticity can be contrasted with the lack of transparency and rigidity that characterized most administered innovation institutions.

Substitution in global wood imports in the 1990s

2001 ◽  
Vol 31 (7) ◽  
pp. 1148-1155 ◽  
Author(s):  
Jussi Uusivuori ◽  
Jari Kuuluvainen
Keyword(s):  
International Trade ◽  
Likelihood Estimation ◽  
Raw Material ◽  
Cost Share ◽  
Data Set ◽  
Price Elasticities ◽  
Long Run ◽  
Forest Industries ◽  
Optimal Mix ◽  
Short Run

In this paper substitution between the main categories of imported wood and between imported and domestic wood raw material is studied empirically using a cost-function approach and a panel data set of the world's 36 most important wood-importing countries in 1990–1997. A subcost function for the optimal mix of different timber inputs and estimable cost share functions are derived. The results suggest that as industrial consumption of wood continues to grow, international trade becomes an increasingly important source of wood for the world's forest industries. Cross-price elasticities of derived demand based on maximum-likelihood estimation show that substitution between different categories of imported wood in world imports is fairly low. By contrast, substitution between imported wood and domestically produced wood is higher. Long-run own-price and cross-price elasticities are larger in absolute terms than short-run elasticities. Because of fairly strong substitutability between domestic and imported wood in the long run, the effects of national forest conservation may be transferred globally via international trade.

scholarly journals The Pricing And Competitive Strategies Of U.S. Airlines

2011 ◽  
Vol 5 (2) ◽  
pp. 23 ◽  
Author(s):  
Evan J. Douglas
Keyword(s):  
Competitive Strategy ◽  
Price Competition ◽  
Pricing Strategies ◽  
Competitive Strategies ◽  
Cost Leadership ◽  
Differentiation Strategy ◽  
Long Run ◽  
Airline Markets ◽  
Short Run ◽  
Good For

This paper argues that price competition is inevitable in the airline markets because passenger air service is a search good. For the same reason, the optimal long run competitive strategy for the airlines is cost leadership, although qualitative advantages should be exploited by a differentiation strategy in the short run. The airlines have devised a variety of creative pricing strategies which are analyzed for their economic content.

scholarly journals On the Health Care Luxury Good Hypothesis

2021 ◽  
Author(s):  
Esmaeil Ebadi
Keyword(s):  
Health Care ◽  
Fixed Effects ◽  
Health Care Expenditure ◽  
Empirical Literature ◽  
Health Care Consumption ◽  
Price Elasticities ◽  
Long Run ◽  
Wide Range ◽  
Short Run ◽  
Income And Price Elasticities

A wide range of research has been developed in the empirical literature regarding income and price elasticities of health care expenditure (HCE). The results are mixed, as researchers employ different methodologies and data sources. The benefits of the panel data method, such as greater data variation, less collinearity, and more degrees of freedom, made it attractive among economists. However, the pooled mean group (PMG) method provides robust estimates compared to conventional methods, such as the mean group estimator and dynamic fixed-effects estimator. As such, this paper applies the PMG method to scrutinize the effect of income and price on U.S. health care consumption using a panel of 46 states. The income and price elasticities were found to be 0.85 and -0.48, respectively, which partially describes the recessionary decline in health care consumption following the Great Recession. In addition, the model reveals that the short-run income elasticity is smaller than the long-run. This confirms that U.S. health care consumption follows the permanent income hypothesis. Consequently, the short-run efficacy of public policies targeting HCE remains limited. The results of this paper suggest reconsidering and adjusting health care policies during a recession so as to avoid probable long-run adverse effects on HCE.

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.

scholarly journals DAMPAK KRISIS PANGAN DAN KRISIS FINANCIAL GLOBAL TERHADAP PERMINTAAN EKSPOR EDAMAME DI KABUPATEN JEMBER

2012 ◽  
Vol 12 (1) ◽  
Author(s):  
Luluk Cahyo Wiyono
Keyword(s):  
Demand Function ◽  
Long Run ◽  
Short Run

Penelitian ini bertujuan ingin mengetahui dampak krisis pangan dan krisis finansial global terhadap permintaan ekspor edamame di Kabupaten Jember. Metode penelitian yang digunakan adalah deskriptif analitis. Model persamaan regresi untuk mengestimasi fungsi permintaan ekspor edamame digunakan model analisis dinamis dengan analisis regresi berganda dalam logaritma. Model analisis dinamis digunakan untuk mengestimasi fungsi permintaan jangka panjang (long run demand function) diestimasi dari fungsi permintaan jangka pendek (short run demand function) dengan menggunakan model penyesuaian parsial Nerlove. Data yang digunakan dalam penelitian ini adalah data sekunder runtut waktu dalam bentuk bulanan yang dimulai dari Januari 2005 sampai Desember 2009.  Hasil dari penelitian ini adalah Permintaan ekspor kedelai edamame dipengaruhi secara signifikan oleh variabel harga okra, Variabel dummy musim panas yang terjadi di jepang, variabel harga edamame ekspor. Sedangkan dengan fungsi dinamis, Permintaan ekspor kedelai edamame di Jepang dipengaruhi secara signifikan oleh variabel dummy musim panas, variabel harga kedelai edamame ekspor. Jadi krisis pangan dan krisis finansial global tidak berdampak yang signifikan terhadap permintaan ekspor edamame di Kabupaten Jember. Respon permintaan kedelai edamame ekspor terhadap perubahan harga bersifat elastis. Sedangkan untuk jangka pendek dan jangka panjang juga bersifat elastis.

Income and Price Elasticities of Crude Oil Demand in Pakistan

2017 ◽  
Vol 18 (6) ◽  
pp. 1373-1383 ◽  
Author(s):  
Khalil Jebran ◽  
Abdullah ◽  
Mahmoud Moustafa Elhabbaq ◽  
Arshad Ali
Keyword(s):  
Crude Oil ◽  
Annual Data ◽  
Bounds Testing ◽  
Price Elasticities ◽  
Distributed Lag ◽  
Long Run ◽  
Negative Effect ◽  
Short Run ◽  
Oil Demand ◽  
Income And Price Elasticities

This study is an attempt to examine the income and price elasticities of crude oil demand in Pakistan using annual data from 1981 to 2013. The short-and long-run relationship was analysed by autoregressive distributed lag (ARDL) bounds testing approach. The results reveal that income and exchange rate show significant positive relationship with crude oil demand in short run as well as in long run. The analyses also show that crude oil price and domestic production have negative effect in both short and long run on crude oil demand. The income is found to be a strong determinant of crude oil demand in both short and long run. This study suggests that strategies would be formulated and adopted which may control the demand of crude oil without affecting the economic growth of Pakistan.

scholarly journals Broad Money Demand in Mauritius with Implications for Monetary Policy

2012 ◽  
Vol 4 (8) ◽  
pp. 436-448
Author(s):  
Indranarain Ramlall
Keyword(s):  
Money Demand ◽  
Demand Function ◽  
Adjustment Coefficient ◽  
Elasticity Coefficient ◽  
Demand For Money ◽  
Money Demand Function ◽  
Long Run ◽  
Monetary Targeting ◽  
Short Run ◽  
Local Stock

This paper employs ECM approach to investigate the long run and short-run components of the broad money demand function in Mauritius for the period spanning from 2000 to 2009. To the author’s best knowledge, no study has been undertaken over broad money in Mauritius since 1992, with an update being long overdue. Results show that M2 is positively elastic with respect to GDP, with the elasticity coefficient revolving around 2.80%, clearly showing that Mauritius is not endowed with a fully developed financial system with monetization moving faster than output. The low adjustment coefficient for VECM furthers substantiates the fact that there is indeed a lack of alternative assets to M2 and above all fully justifies the transition from monetary targeting to interest rate targeting. Evidence is found in favor of foreign asset substitution but only through the exchange rate channel. Findings further show that the local stock market does not act as a substitute to local money holdings. Overall, the study points out a rather stable demand for money function in Mauritius so that the monetary authority can contemplate using it as a complementary tool but chiefly for long-run policy assessments.

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