A Study of Price Response Function for Asymmetric and Non-Proportional Demand Response to Price Change

2015 ◽  
Author(s):  
Youngsik Kwak ◽  
Yoonjung Nam ◽  
Yoonsik Kwak ◽  
Pil Hwa Yoo
2009 ◽  
Vol 14 (2) ◽  
pp. 263-280 ◽  
Author(s):  
DICKSON M. NYARIKI

ABSTRACTThe influence of price, in view of macro-economic policy change and a set of other factors, on herd off-take rates from ranches in Kenya over a period of 17 years was assessed. An AR(1) equation, based on Nerlove's classical dynamic supply model, was derived and fitted to panel data using the Cochrane–Orcutt procedure. Pooling of data was done to circumvent data insufficiency, thereby improving the statistical power of the analysis. Results indicate that price change has had a significant effect on ranch herd off-take, and climatic factors also account for long-run off-take levels.


2018 ◽  
Vol 15 (4) ◽  
pp. 29-45 ◽  
Author(s):  
Ahmed M. Al-Baidhani

This study aims to evaluate the usefulness and relevance of accounting earnings disclosures, as the key determinant of stock price changes. The main objective is to examine whether earnings response coefficient (ERC) behaviour could explain more fully the stock price changes, as to the reason why the stock price change is not equal to the number of announced earnings. The study is done with data sets from five countries of the Organization for Economic Co-operation and Development (OECD) group and Malaysia. The analysis is then grouped into developed markets: Japan, UK, Sweden, and Switzerland; and emerging markets: Malaysia and Mexico, for the period 2001-2014. Two measures of abnormal returns are regressed against the size of the announced earnings. The first regression uses measures from individual events. The second regression uses a new measure; that is, from portfolios made out of all observations sorted by size of earnings into ten portfolios for each country and combination of countries. The portfolio method used was aimed at controlling possible idiosyncratic-errors-in-variables problem using individual event measures. The results using individual-event measures resulted in reasonable ERC sizes with high R2 explanatory power, a little higher than those reported in prior studies on other countries. Importantly, portfolio-based ERC is very close to the magnitude of the earnings in some tests, which supports the famous value relevance theory in accounting. This finding is new to this literature.


2017 ◽  
Vol 186 ◽  
pp. 327-332 ◽  
Author(s):  
Shinsuke Takahashi ◽  
Hiroshi Koibuchi ◽  
Shingo Adachi

Author(s):  
Motsipiri Calvin Mojapelo ◽  
Johannes Jan Hlongwane ◽  
Abenet Belete

This study aims to estimate sorghum supply elasticity in South Africa. The study used time series data spanning from 1998 to 2016, obtained from the abstracts of agricultural statistics. The Variance Error Correction Model was employed; the study used two dependent variables, these being area and yield response functions. The results have shown that the area response function was found to be a robust model as most of the variables were significant, responsive and elastic. Maize price, as a competing crop for sorghum, negatively influenced the area allocation; however, the remaining variableshad a positive impact on area allocation in the long-run. The yield response function was found not to be robust and hence not adopted. It was therefore concluded that the area response function is more robust than the yield response function, hence sorghum production has shown more response to areaallocation than yield. The findings further indicated that the error correction term for area and for the yield response function was –1.55 and –1.30, respectively. This indicated that the two models were able to revert to equilibrium. Based on the findings, the study recommends that amongst other methods to enhance sorghum output, producers could use improved varieties or hybrids, as this action would result in allocation of more land to sorghum production, following price change.


2021 ◽  
pp. 1-30
Author(s):  
Toshiaki Iizuka ◽  
Hitoshi Shigeoka

Abstract This study tests whether demand responds symmetrically to price increases and decreases—a seemingly obvious proposition under conventional demand theory that has not been rigorously tested. Exploiting the rapid expansion in Japanese municipal subsidies for child healthcare in a difference-in-differences framework, we find evidence against conventional demand theory: when coinsurance, our price measure, increases from 0% to 30%, the demand response is more than twice that to a price decrease from 30% to 0%. This result indicates that while economists and policymakers pay little attention, price change direction matters and should be incorporated into welfare analysis.


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