integration of spatial markets studies of spatial market integration draw their implications from a theory which assumes that there are no intraregional transport costs an alternative theory is offered based on the assumptions that buyers and sellers are spatially dispersed and intraregional transport costs are significant this implies that the market is a linked oligopoly or oligopsony and that market integration tests are tests of alternative oligopoly price formation processes for example collusive basing point pricing produces results typically assumed to imply efficiently integrated markets while competitive fob pricing does not the theoretical implications are illustrated with an analysis of hog prices in canada

a confirmatory analysis of the unit root hypothesis for oecd consumption income ratios this article investigates the existence of a unit root in the consumption income ratio for a sample of 23 oecd countries over the period 1960 to 2005 for that purpose we first use recently developed unit root tests with good size and power second we employ the more powerful panel unit root tests of pesaran 2003 and smith et al 2004 that take the null of nonstationarity and a bootstrap version of the test of hadri 2000 that takes stationarity as the null hypothesis overall our confirmatory analysis renders clear cut evidence that oecd consumption income ratios contain a unit root

examining dynamically changing timber market linkages market integration has been widely studied in the past to gain a better understanding of how different markets for the same good interact with one another traditional cointegration tests have been used to perform these analyses however these tests can only reveal the presence of stable or average long term relationships to evaluate market dynamics over time we modify a time varying smooth transition autoregressive tv star model to examine pine stumpage markets in the us south the proposed model incorporates an economic indicator and allows us to evaluate market integration as it changes throughout a specified time period the potential significance of this work is twofold first market integration can be observed as a function of an economic indicator and secondly the proposed model will allow us to draw inference about market integration at specific time points

ratifiable mechanisms learning from disagreement in a mechanism design problem participation constraints require that all types prefer the proposed mechanism to some status quo if equilibrium play in the status quo mechanism depends on the players beliefs then the inference drawn if someone objects to the proposed mechanism may alter the participation constraints we investigate this issue by modeling the mechanism design problem as a two stage process consisting of a ratification state followed by the actual play of the chosen game we develop and illustrate a new concept ratifiability that takes account of inferences from a veto in a consistent way

estimating the degree of market integration existing tests of spatial market integration are commonly based on statistical criteria without an explicit link to an economic model of price determination this article proposes new measures of market integration defined directly in terms of a well known spatial price determination model and develops an econometric methodology for estimating these measures due to the intractability of the conditional density function of prices we use indirect inference to estimate the model parameters and market integration measures the methodology is illustrated with simulated data and is applied to soybean price data for the united states brazil and the eu copyright 2008 oxford university press

capital gains in japan their magnitude and impact on consumption this paper estimates the magnitude of net capital gains on household wealth in japan and then conducts an econometric analysis of their impact on consumption using national accounts data for the 1955 93 period it finds that net capital gains on household wealth have been sizeable albeit volatile in japan during this period and that their impact on consumption has been substantial especially during the late 1980s and early 1990s the econometric analysis is one of the first cointegration analyses of japanese consumption behavior and finds strong support for the life cycle permanent income hypothesis copyright 1996 by royal economic society

population policies demographic structural changes and the chinese household saving puzzle abstract using combined data from population censuses and urban household surveys we study the effects of demographic structural changes on the rise of household savings in china variations in fines across provinces for unauthorized births under the one child policy and in cohort specific fertility influenced by the implementation of population control policies are exploited to facilitate identification we find evidence that older households with fewer adult children saved more middle aged households with fewer dependent children experienced increase in savings and younger households with fewer siblings also saved more these findings lend support to a simple economic model in which the effects of population control policies are investigated in the context of household saving decisions in china

cointegration and market integration an application to the indonesian rice market this article suggests improvements in the use of regression analysis to measure spatial market integration the procedure pioneered by ravallion is still widespread but is valid only under certain conditions of exogeneity the alternative offered here is an error correction mechanism which makes it possible to test for exogeneity as well as indicating the direction and strength of causality in price formation between markets the method is illustrated with data on rice prices in different parts of the indonesian market the results confirm among other things that supply sources are more important than demand sources in driving prices

policies and institutions in transition economies a political economy perspective on the agri food sector abstract this paper argues that since democratic governments are vulnerable to political pressure they should intervene with policies and institutions only when the net economic benefits exceed the costs incurred through increased political access if governments in transition economies are to exercise control it is important that public institutions within and supporting the agri food sector are designed in such a way as to restrain political incentives in practice this means that they should be built so as to take advantage of inherent scale economies

is the consumption income ratio stationary evidence from panel unit root tests this paper provides evidence on the stationarity of the consumption income ratio from a panel of 20 oecd countries using recently developed panel unit root tests which avoid the problem of low power associated with conventional unit root tests our findings suggest that the consumption income ratios in the oecd countries are generated by a nonstationary stochastic process

the impact of agricultural liberalisation on food security in malawi abstract the donor supported structural adjustment programmes have not impacted favourably on livelihoods food security and the general welfare of the poor in malawi this resulted from the prescription of wrong policy packages and limited attention to poverty alleviation policies policies have tended to concentrate on promoting market and price mechanisms less on addressing production constraints and non economic barriers to broad based economic growth there are losers and winners as a result of policy reforms in agricultural produce marketing the losers are mainly the smallholder farmers in the category of net food buyers low income or wage earners in urban and semi urban areas and smallholder farmers in remote areas the winners are smallholder farmers in the category of net food sellers private traders institutional traders and the state marketing agency the paper analyses the impact of pricing policy and market deregulation on the state marketing organisation and on the private marketing system highlighting the lessons to be learned and making recommendations on how to improve the food security situation at the household level

how is the liberalization of food markets progressing market integration and transaction costs in subsistence economies we propose a modification of baulch s parity bounds model to measure the market integration of food markets in developing countries instead of extrapolating a single observation of transaction costs we estimate transaction costs predicted transaction costs compare well with survey data of traders probabilities of market regimes computed on the basis of predicted transaction costs fluctuate significantly and do not support fixed regime probabilities over time the probability of market integration with trade decreases consistently during food shortages increasing either the probability of no trade or loss making trade or the probability of profitable but unexploited trade opportunities the data further support a negative trend in market integration with trade

scandinavian evidence on growth and age structure the age distribution is seldom taken into consideration in macroeconometric papers in spite of the fact that established economic theories predict that demographic factors will affect the aggregate economy this paper investigates empirically the influence of age variables on growth unlike recent papers on the subject the focus here is on investigating the relationship on annual data for individual scandinavian countries estimations of a typical growth specification augmented with age variables are run and the results indicate that economic growth is indeed affected by the age distribution where the demographic structure catches the mediumrun trend in the growth rate the robustness of this finding is first checked by instrumental variable regressions to control for the potential endogeneity of the economic variables and then by running ridge regressions to mitigate the collinearity between the age variables rarement les etudes macro economiques considerent la distribution de la population par ge

on stability of efficient cartel mechanisms in first price auctions with uninformed bidders abstract this paper investigates the stability of the efficient cartel mechanism in a sealed bid first price auction we find that even if bidders are not informed about who else participates in the auction when they submit bids the cartel is not stable hence the instability of cartels does not hinge on the information structure imposed on the bidders a seller does not have to reveal who participates in the auction to prevent them from forming a cartel

uniqueness of equilibrium in sealed high bid auctions abstract for the case of two buyers we show that equilibrium in the sealed high bid auction is unique when i buyers reservations prices are drawn independently from distributions with finite support and positive mass at the lower endpoint ii buyers have private values and iii buyers preferences are log supermodular for more than two buyers we obtain the same result under the additional assumptions that iv buyers with the same reservation price have the same preferences v buyers are risk neutral or risk averse with non increasing absolute risk aversion and vi the supports of the different buyers distributions of reservation prices have the same upper endpoint

equilibria in first price auctions with participation costs this paper characterizes the equilibria of first price auctions with participation costs in the independent private values environment bidders use cutoff strategies to decide whether they will participate in the auction it is shown that when bidders are homogeneous there always exists a unique symmetric equilibrium and further there is no other equilibrium when valuation distribution functions are inelastic when distribution functions are elastic at the symmetric equilibrium there exists an asymmetric equilibrium inelasticity elasticity includes concavity convexity of distribution functions as a special case we find similar results when bidders are heterogeneous

a cointegration analysis of the impact of the age structure of the population on the household saving rate in japan this paper analyzes the impact of the age structure of the population on japan s household saving rate by applying cointegration techniques to time series data for the 1955 1993 period it finds th

on the extent of the market wholesale gasoline in the northeastern united states this paper develops the classical view of the extent of markets by introducing explicitly in the analysis the concept of arbitrage costs arbitrage or transaction costs imply that market boundaries are essentially stochastic while a set of products or regions may have binding arbitrage conditions i e may be in the same market at a given point in time they may not at another thus in defining a market the probability that a set of agents or regions would h3ve binding arbitrage conditions has to be assessed this paper develops an econometric methodology to estimate the transaction costs required to arbitrage among a given set of products as well as the probability that that set of products would be bound by binding arbitrage condi tions finally the methodology is applied to wholesale gasoline in the northeastern part of the united states address for communications pablo t spiller herbert hoover memorl l bldg 9348 stanford ca 94305

modelling trends in food market integration method and an application to tanzanian maize markets abstract pushed by increasing availability of price data and extensive market liberalisation efforts in many developing countries research on food market integration has evolved rapidly over the last two decades empirical methods to measure market integration diverged in two directions on the one hand there is the parity bounds model pbm using a switching regressions technique while on the other hand the use of threshold autoregressive tar models has been proposed this article provides a discussion on the two methods and argues that tar models are better able to capture the dynamics of the arbitrage process underlying interconnected markets furthermore we extend the standard tar model to include a time trend in both the threshold and the adjustment parameter using weekly maize price data on seven selected markets in tanzania we illustrate how both transaction cost and the speed of adjustment have changed during the nineties

the impact of market liberalisation on food security in zambia abstract the main elements in agricultural market liberalisation have been the dismantling of the state institutions for marketing and distribution of agricultural produce the abolition of subsidies the liberalisation of import and export trade and the market determination of input and output prices economic policy reforms on the monetary fiscal and other fronts also impinged on the variables influencing production trade and consumption this paper highlights some of the undesirable offshoots of the previous policy regime and enumerates the specific policies that have been introduced since 1992 it describes the positive and negative outcomes witnessed so far finally it suggests what needs to be done to eliminate the prevailing major constraints to growth in food production and consumption

market emergence and transition arbitrage transaction costs and autarky in china s grain markets using trimonthly chinese provincial grain prices from 1988 to 1995 we estimate a parity bounds model of interregional trade for four subperiods to characterize how multiple aspects of market performance change during the process of economic transition for each period we estimate the extent to which arbitrage opportunities are realized by traders the transaction costs between location pairs and the likelihood that regions do not trade trade restrictions cannot explain the pattern of uneven market development over time infrastructure bottlenecks managerial incentive reforms and production specialization policies all were likely important factors affecting market performance

aging transitional dynamics and gains from trade abstract we formulate a two country two good two factor two period lived overlapping generations model to examine how population aging determines the pattern of and gains from trade two main results are obtained first the aging country endogenously becomes a small country exporting the capital intensive good whereas the younger country endogenously dominates the world economy determining the world prices in the free trade steady state second although uncompensated free trade cannot be pareto superior to autarky there exists a compensation scheme applied within each country such that free trade is pareto superior to autarky

youth dependency and total factor productivity abstract recent literature shows empirical support for an effect of demographic age structure on economic growth this literature does not give attention to the possibility that age structure might also have an effect on total factor productivity much of the recent literature on economic growth has stressed that an understanding of cross country differences in output per worker is needed that literature argues that the most important determinant of international differences in output per worker is differences in total factor productivity this paper finds empirical evidence in cross country data for the thesis that the youth dependency ratio the population below working age divided by the population of working age reduces residual growth which measures total factor productivity growth for this reason the paper demonstrates that age structure has an effect on the most important determinant of international differences in output per worker

the stationarity of consumption income ratios evidence from minimum lm unit root testing abstract previous research concerning the stationarity of the consumption income ratio is extended via the application of the minimum lm unit root tests of lee and strazicich 2003 lee j and strazicich m 2003 minimum lm unit root test with two structural breaks review of economics and statistics 85 1083 1089 it is found that incorporation of structural change under the null reverses earlier findings of non stationarity with the unit root hypothesis rejected for all 20 oecd economies examined

rent capture analysis of ontario s stumpage system using an enhanced parity bounds model we develop and use an enhanced parity bounds model epbm to examine the discrepancy between the stumpage price administratively determined under ontario s current stumpage pricing system and the market value of stumpage covering from june 1995 to january 2007 the results show that in the short run the stumpage prices were below or above the market values however in the long run the underpayment and overpayment will even out each other the results imply that ontario s stumpage pricing system has the ability to capture the full economic rents in the long run and the results also have other policy implications

transfer costs spatial arbitrage and testing for food market integration conventional tests for food market integration ask often misleadingly whether prices in different locations move together in this paper an alternative methodology the parity bounds model pbm is developed which uses information on transfer costs in addition to food prices to assess the efficiency of spatial arbitrage monte carlo experiments using data generated by a point space spatial price equilibrium model show the pbm to be statistically reliable an application to philippine rice markets demonstrates that the pbm detects efficient arbitrage when other tests do not

market integration efficiency of arbitrage and imperfect competition methodology and application to u s celery this paper develops and applies a methodology to test for efficiency of interregional commodity arbitrage application of the methodology requires only time series data on prices for alternative cities regions countries or product forms yet the approach is capable of generating evidence on a number of market parameters including market integration arbitrage efficiency the magnitude of marketing margins product substitutability and competitiveness of markets estimation is based on a switching regression model with three regimes efficient arbitrage relative shortage and relative glut results from application of the model to u s celery marketing indicated significant departures from efficient arbitrage for both california and florida celery

testing market integration a model of spatial price differentials for a tradable good is proposed which avoids the inferential dangers of received methods using static price correlations the proposed method also extracts more information on the causes of price differentials from the same data the method is illustrated using monthly rice price data for postindependence bangladesh including the very substantial regional price shocks during the 1974 famine impediments to market integration are indicated

food market reform the changing role of the state abstract the liberalization and privatization of food markets has been an important feature of economic reform programmes in many developing countries and donor conditionality has been applied to this end however the agenda needs to move beyond this to the establishment of efficient and equitable marketing systems a major constraint on this has been the weak base of theoretical and empirical knowledge about the characteristics of food markets on which reform programmes have been built three principal areas are identified where further research policy experimentation and sharing of experience are required the role of the state in relation to collective action by market participants the problem of food price instability and the delivery of support to the small scale private sector that has taken over many marketing functions