Sentiment-Augmented Supply and Demand Equations for the Dry Bulk Shipping Market

We present, for the first time in the literature, empirical estimates of the supply and demand curves for the ocean-going dry bulk sector, using a three-stage least squares methodology. Furthermore, we augment these functions with sentiment, which appears to have a positive and significant impact on supply. This supports the view that the outlook that shipowners have about the market will undoubtedly influence their decisions regarding purchasing vessels or bringing them out of lay up. Thus, our results highlight the fact that future expectations have an impact on current pricing, albeit indirectly, through their impact on the supply side. Our results further enhance the behavioral economics literature and provide important insights for both academics and professionals.

The determinants of the demand for tobacco in Togo

This paper analyzes the relationship between the demand for tobacco, its price and the economic factors that may influence it. The objective is to understand the response of consumers to an increase in tobacco prices. The price increase is assumed to be caused by the effect of increasing tobacco taxes, which is a major tobacco control policy. This paper also analyzes the reaction of smokers to an increase in the prices of other goods in the economy. To achieve this objective, we estimate the elasticities of these factors through the tobacco demand models proposed in the literature. The price of tobacco, consumer income per capita, the price of goods such as food and health care, and the strengthening of anti-smoking laws are among the variables used to estimate the demand equations for tobacco. The results of the estimations indicate first that the demand for tobacco is highly elastic with respect to its price; the price elasticity is estimated at -1.368. Tobacco demand is also sensitive to consumer income and the strengthening of anti-smoking laws. In contrast, changes in the prices of other non-addictive goods in the economy, such as food, have no influence on the demand for tobacco products. This means that when the price of other products increases, smokers are likely to reduce the quantity of these products consumed in order to maintain their level of tobacco consumption.

Output response at the farm level: Maize supply and input demand in Kaduna State, Nigeria

The degree of responsiveness of agricultural supply to input either in the short or long-term production decision is crucial in understanding the role of price and non-price factors in increasing supply. This study analysed output supply and input demand of maize production using a farm survey data of 600 randomly selected maize farmers from all agricultural zones in Kaduna State of Nigeria. Data were analysed using a modified Nerlovian model and set of input demand equations. The results showed that in all estimates (yield and hectarage) long run estimates are greater than the short run values and both were inelastic. The elasticity for lagged own price of maize was 0.23% in the short run and 0.17% in the long run were positive, marginal and inelastic. The hectarage elasticity of supply response for maize is 1.04 in the short run and 0.78 in the long run. The result of the input demand equations showed that the coefficients cost of agrochemical and farm size statistically affect seed, fertilizer and labour demand. The study portrayed that the most critical issues in maize supply are the lack of improved production technology, poor capital investment, land unavailability or poor land tenure system and poor policy incentives. The study recommends that, there is a need for State policy on agricultural research and extension, and adequate input price policies. The government is advised to dissolve the agricultural extension service system to local governments. This will allow agricultural extension system to be more location specific.

Determinants of Digital Divide using Demand-Supply Framework

In last two decades, India has seen high economic growth. Concomitantly, there has been increase in availability and use of information and communication technologies (ICTs). However, ICT penetration in India is much less when compared to global averages. There exists a substantive level of inequality in ICT access and use. Empirical studies on extent and nature of digital divide in India are few, especially those with explicit theoretical demand-supply framework, using consistent and reliable pan India data. This paper is an attempt to address these research gaps. It examines the digital divide in India across socio-economic classes and different political-geographic regions. The reduced form demand equations for two ICT instruments – Internet and mobile phone - are estimated separately for households aggregated at subnational level. A multi-variate econometric model identifies both demand and supply side factors shaping differential access by households. Findings indicate digital divide is a reflection of existing socio-economic divide. On the demand side, socio-economic inequality as manifest in the economic conditions of households, social category, occupational profile, age and education status are key determinants of district level digital divide. Further, supply side factors like availability of electricity, mobile network and extent of urbanization also play an important role.

Demand for housing loans and interest rates in Russian regions

This work examines the current world experience in assessing the sensitivity of household mortgage borrowing to interest rates. The data of the “bank— region—year” format are used to estimate supply and demand equations for housing loans issued by banks in the regions of the country in 2015—2018. Our estimations have revealed that the demand on the mortgage market in the regions is sensitive to the price of loans: when weighted average rate at which a bank issues mortgages in a region is lower by 1 percentage point it is associated with an increase in demand up to 20—25%, all other things being equal, that is, when taking into account the number of offices of a bank in that region, the economic situation and region’s characteristics in that year. Demand for mortgages is elastic at interest rates, which means that by lowering rates on mortgage programs, banks can expect an increase in demand, due both to an increase in overall demand for loans and to an overflow of borrowers from other banks. Consequently, it was confirmed that high interest rates on mortgages hinder the development of housing lending.

Analyzing the Influence of Transportations on Chinese Inbound Tourism: Markov Switching Penalized Regression Approaches

This study investigates the nonlinear impact of various modes of transportation (air, road, railway, and maritime) on the number of foreign visitors to China originating from major source countries. Our nonlinear tourism demand equations are determined through the Markov-switching regression (MSR) model, thereby, capturing the possible structural changes in Chinese tourism demand. Due to many variables and the limitations from the small number of observations confronted in this empirical study, we may face multicollinearity and endogeneity bias. Therefore, we introduce the two penalized maximum likelihoods, namely Ridge and Lasso, to estimate the high dimensional parameters in the MSR model. This investigation found the structural changes in all tourist arrival series with significant coefficient shifts in transportation variables. We observe that the coefficients are relatively more significant in regime 1 (low tourist arrival regime). The coefficients in regime 1 are all positive (except railway length in operation), while the estimated coefficients in regime 2 are positive in fewer numbers and weak. This study shows that, in the process of transportation, development and changing inbound tourism demand from ten countries, some variables with the originally strong positive effect will have a weak positive effect when tourist arrivals are classified in the high tourist arrival regime.

EU Demand for Defense, 1990–2019: A Strategic Spatial Approach

For 1990–2019, this study presents two-step GMM estimates of EU members’ demands for defense spending based on alternative spatial-weight matrices. In particular, EU spatial connectivity is tied to EU membership status, members’ contiguity, contiguity and power projection, inverse distance, and arms trade. At a Nash equilibrium, our EU demand equations are derived explicitly from a spatially based game-theoretical model of alliances. Myriad spatial linkages among EU members provide a robust free-riding finding, which differs from the spatial and non-spatial literature on EU defense spending. Even though the EU applies common trade policies and allows for unrestricted labor movement among members, members’ defense responses adhered to those of a defense alliance. Moreover, EU defense spending exhibits positive responses to GDP and transnational terrorist attacks, and a negative response to population. During the sample period, EU members did not view Russia as a military threat.

Measures of Residential Energy Access in Mexico, 2008–2014

The concept of energy access in developing countries, such as Mexico, encompasses the accessibility to reliable fuels for heating, cooking, and lighting purposes while reducing coal and firewood consumption. This paper suggests residential energy access indicators by applying accessibility theory and estimating demand equations for electricity, natural gas, propane, firewood, and coal using Mexican households’ survey data from 2008 to 2014. Sprawl measures, gravity model, and central place theory are the accessibility theories supporting the accessibility indicators. The suggested energy access indicators are statistically significant and show the expected signs when applied to propane in Mexican households in 2014. The greater the household income, population size, education level of the household head, energy access, and the lower the energy price and the household size, the greater the demand for energy from 2008 to 2014. By contrast, the greater the education, the lower the demand for firewood and coal. Policy-makers in Mexico can use the suggested results to complement the energy access indicators suggested by international agencies to evaluate energy access performance and better understand the drivers of the different energy goods consumed by Mexican households.

Agricultural commercialization and food security: an ex-ante approach

PurposeThe lack of theoretical and pragmatic way of measuring agricultural commercialization has been responsible for the inconsistent results for the impact of agricultural commercialization on household welfare. This study makes use of an input-based market participation approach that utilizes household preplanting production decision to stratify farming households according to production orientation.Design/methodology/approachThe study estimates a system of input and consumer demand equations. It augments traditional input and consumer demand equations with an additional variable based on an endogenous switch, which measures the probability of being a commercial farming household. Empirical evidence suggests that market orientation is an important determinant of the level of traded input and hence, market participation. Predicted probabilities obtained from the endogenous switch are used to stratify households into subsistence and commercial agricultural households.FindingsResults of the relative effect of commercial agriculture on the level of household food security support the claim that production orientation does affect the relationship between the relative share of food expenditure to the household total expenditures and the logarithm of household expenditure for this part of sub-Saharan Africa.Research limitations/implicationsAs in the case of all generalized method of moments studies, the results depend on the robustness of the instruments. However, search for better instruments may run afoul of Leamer's ad hoc specification search with nonexperimental data.Originality/valueThis paper is original in its formulation of an endogenous switch between subsistence and commercial agriculture. This switch is estimated as a latent variable following a logit form.