Evidence of cushioning of tobacco tax increases in large retailers in Australia

BackgroundTobacco companies may attempt to minimise the impact of tobacco tax increases on consumers by gradually passing on the price rise over several months. This study examined whether there was evidence of large Australian tobacco retailers engaging in this practice (known as cushioning) over a period including both routine indexation and large annual tobacco excise increases.MethodsAdvertised prices of nine factory-made cigarette (FMC) and nine roll-your-own tobacco (RYO) products were recorded from two stores monthly from December 2016 to December 2019. Per cent change in price from the previous month was analysed for FMC and RYO products, controlling for year, month, tobacco company and supermarket chain.ResultsSignificant main effects of month were observed for FMC and RYO products (both p<0.001). Large, significant average increases in per cent change in price were observed in September for FMC (6.51%) and RYO (11.45%) products, the month of the annual excise increase and prices also significantly increased in October (FMC: 3.01%; RYO: 1.91%). Significant increases were also observed in the months after the March annual routine indexation: by 1.10% in May for FMC products and by 1.09% in April for RYO products.ConclusionThis study has demonstrated evidence of cushioning of tax increases of FMC and RYO products in large Australian supermarkets. The monthly per cent change in price significantly increased several months after routine excise indexation and in the 2 months following a large annual excise increase. Further research with a larger sample of products and stores is needed to confirm these findings.

An Endogenous Emissions Cap Produces a Green Paradox

The European Union’s Emissions Trading System (EU ETS) is complemented by a Market Stability Reserve (MSR). After a major revision of the EU ETS in 2018, the MSR effectively makes the supply of allowances responsive to demand. In this paper, we show that a cap-and-trade scheme with an endogenous cap such as the EU ETS produces a Green Paradox. Abatement policies announced early but realized in the future are counter-effective because of the MSR: they increase cumulative emissions. We present the mechanisms in a two-period model, and then provide quantitative evidence of our result for an annual model disciplined on the price rise in the EU ETS that followed the introduction of the MSR. Our results point to the need for better coordination between different policies, such as the ‘European Green Deal’. We conclude with suggestions to improve the workings of an endogenous cap, ahead of the MSR review scheduled for 2021.

The Effect of KRX Halts on Overheated Short-selling Stocks

Korea Exchange (KRX) has adopted several measures to ease temporary overheating of short-selling stocks in the market since March 27, 2017. These measures aim to curb excessive volatility and unfair trade, promoting efficient price discovery. This study examines the effect of overheated short-selling halts using the sample data from these KRX measures during the period of September 2017 to October 2019. The major empirical results are: first, the drop in prices of overheated short-selling stocks on a downward trend slows significantly after KRX announcement. Moreover, the stock price rise on the triggering day shows no additional increase in the period after the trigger. Second, for the stocks so triggered, the volatility in the period after the halt announcement shows no significant difference from the pre-halt period. This can be attributed to the resolution of the information asymmetry by calling investors’ attention to overheated short-selling. Third, the ratio of short-selling to trading after halt suggests no statistically significant difference from the period before the trigger. These results imply that the measures to ease overheated short sale of stocks in KRX are effective in controlling excessive temporary volatility and unfair trading.

A New Equilibrium Strategy of Supply and Demand for the Supply Chain of Pig Cycle

The pig market had experienced a cycle of price rise and fall, also known as the “pig cycle.” This paper analyzes the fluctuation relationship between pig price, pig supply, and pork demand, constructs a system dynamics model of the pig industry by decomposing the structure of the pig supply chain, and then discusses the causes of “pig cycle,” as well as the supply chain management strategy and industrial policy, to stabilize the pig industry market. Research shows that reducing the cost of pig breeding, countercyclical adjustment, and government macrocontrol can effectively reduce the fluctuation of pig prices. Among them, reducing the pig breeding cost is the most effective long-term strategy to stabilize the pig price.

Predicting Futures Price And Contract Portfolios Using The ARIMA Model: A Case of Nigeria’s Bonny Light and Forcados

Market prediction has been the goal of many study as investors sought traded assets since the inception of the capital market. With each asset exchanged for money, investors seek to stay ahead the market trend in the hope of amassing profits. Businesses’ growth (rise/fall) is evident upon their response to market behaviour. Thus, accurate prediction of the market often offers as its reward, enlarged financial portfolio. Market participants thus, seek to manage the risks associated with asset prices and its volatility, which can be rippled with chaos and complex tasks arising from a demand-supply curve. We seek to model the Oil market and forecast its price direction supported with empirical evidence using ARIMA model to analyze inputs in search of an optimal solution. We adopt the OPEC model to: (a) predict spot/futures-prices, (b) investigate why previous prediction was poor and price plummeted, and (c) compares value(s) from Ojugo and Yoro (2020) and Ojugo and Allenotor (2017). Results shows demand-supply curve rise (and a price rise) even though the policies and trend in real life scenario is currently experiencing a price plummet.

Egypt will be comfortable with slight price increases

Headline EGYPT: Cairo will be comfortable with small price rise