fiscal decentralisation the knowledge economy and school teachers wages in urban china abstractwe examine how fiscal decentralisation and progress towards the development of a knowledge intensive economy has affected teachers wages in china utilising panel data from 2001 to 2013 we find that fiscal decentralisation has a negative impact on teachers wages and that this effect is magnified through a deepening of the knowledge economy while the knowledge economy itself has no effect on teachers wages the findings suggest that incentives being offered to local administrators need to be revisited if china is convinced of the need to increase teacher quality in ways suited to the knowledge economy which it wishes to construct

short run price and income elasticity of gasoline demand evidence from lebanon abstract we empirically estimate the demand for gasoline in the presence of multiple shifts caused by structural breaks using monthly data from lebanon covering the period 2000 m1 2010 m12 consistent with most studies in the literature our study reports that gasoline is price and income inelastic in the short run however when a single and multiple breaks are introduced the consumers responsiveness to gasoline price and income increase since both price and income elasticity are sensitive to structural changes a policy that pleads for a flat excise tax may not be optimal with respect to either the cyclical pattern of government revenues or the internalization of international environment standards

what makes cheap talk effective experimental evidence in some environments a player only learns the choice of another player if he or she undertakes a risky choice while costless preplay communication cheap talk has been found to be effective in experimental coordination games participants have typically learned both own payoffs and the other player s action are both of these components necessary for cheap talk to be effective in our 22 stag hunt game the safe choice always yields the same payoff so that information about payoffs does not always identify the other player s action we vary whether information is provided about the other person s play and whether costless one way messages can be sent before action choices are made we find that information provision about the other person s play increases coordination when there are messages but otherwise has no effect d 2004 published by elsevier b v

the relationship between regional natural gas markets and crude oil markets from a multi scale nonlinear granger causality perspective this study first decomposes the daily returns of regional gas and crude oil at different time scales using the ensemble empirical mode decomposition eemd method it then investigates the causality relationship between each pair of components at the different time scales by employing the linear and nonlinear granger causality tests for the original returns series this study finds that unidirectional linear granger causality exists from crude oil markets to north american and european gas markets however for nonlinear characteristics the crude oil and regional gas markets exhibit bidirectional nonlinear granger causality on the medium term time scale a bidirectional nonlinear spillover effect is found between the markets the long term trends for the markets suggest a significant linear relationship however no nonlinear spillover effect is found between the crude oil and regional gas markets

gas and lng trading hubs hub indexation and destination flexibility in east asia abstract in the east asian gas markets issues like gas trading hubs hub indexed pricing and destination flexibility are being debated this paper examines the impact of a change in east asia s pricing benchmark and contract flexibility on the regional and global gas markets the paper uses the nexant world gas model a linear program with global cost minimization as the objective to our knowledge this study on hub competition price benchmark change and contract flexibility improvement in east asia will be the first in the literature and have real policy relevance the results show that both price benchmark change and contract flexibility improvements will create an overall benefit for the world and east asia importers but the impacts are different among exporters and importers however there is no evidence of competition among different benchmark hubs and no evidence that destination restrictions cause the asia premium it implies that removal of destination clauses has higher priority than the change to hub indexation for japan korea and chinese taipei but both should be treated equally in china the study also suggests that east asian importers should cooperate among themselves and with exporters to facilitate the hub creation and contract changes in east asia

urban biased policies and rising income inequality in china since the start of economic reforms in 1978 china has experienced the largest increase in income inequality of all countries for which comparable data are available according to the world bank 1997 china s gini coefficient increased from 28 2 in 1981 to 38 8 in 1995 based on official survey data another study that used internationally standard definitions for incomes estimated china s gini ratio at 38 2 in 1988 and 45 2 in 1995 a level that already surpassed many developing economies in asia azizur khan and carl riskin 1998 are these income inequality changes the consequence of institutional reforms that replaced egalitarian rewards with work incentives employment contracts and labor mobility this paper uses household survey data collected by china s state statistical bureau ssb to investigate the sources and causes of this rising inequality by analyzing gini ratios and generalized entropy measures i decompose the overall inequality into three sectoral components i inequality within rural areas ii inequality within urban areas and iii sectoral disparity the data indicate that increases in rural urban income differentials have been the driving factor behind the rising overall inequality in china i argue that urbanbiased policies and institutions including labor mobility restrictions welfare systems and financial policies of inflation subsidies and investment credits to the urban sector are responsible for the long term rural urban divide and the recent increases in disparity

the impact of the north american shale gas revolution on regional natural gas markets evidence from the regime switching model this paper investigates the impact of the north american shale gas revolution on price movement regimes in the north american and european gas markets using the markov regime switching model it then measures price spreads between oil and gas from 1998 to 2015 to identify the impact of the revolution on the relationship between oil and regional gas prices the results show that the typical movement regime of henry hub prices changes from slightly upward to sharply downward in addition the clear seasonal effect of henry hub prices has disappeared after the shale gas revolution the typical movement of national balancing point nbp prices has changed gradually from a sharply upward regime to the alternative regimes between sharply downward and slightly upward tending to follow oil prices this indicates that the shale gas revolution has had little impact on nbp price movement meanwhile henry hub prices have decoupled from wti prices while nbp and brent prices have continued to exhibit a long term equilibrium level around which they have swung in the short time frame since the shale gas revolution pertinent energy policy makers and energy market participants should pay attention to these changes and adjust their trade production and investment strategies accordingly

what drives volatility in natural gas prices abstract we examine the primary drivers of u s natural gas price volatility to do so we apply a structural heterogeneous autoregressive var shvar model accommodating structural breaks in both the coefficient and volatility to monthly time series data on natural gas supply demand and price between january 1978 and july 2018 we detect several structural changes in coefficients and shock volatility in the natural gas market our findings indicate that the response of natural gas prices differs significantly depending on the regime and type of shock in the natural gas market while demand shocks specific to the natural gas market are the primary drivers of natural gas price volatility structural supply shocks also play a significant role in explaining movements in natural gas prices our results suggest that failure to consider structural breaks in the coefficient and volatility may result in biased estimates and distorted impulse responses of the impact of shocks on natural gas price volatility

oil indexation market fundamentals and natural gas prices an investigation of the asian premium in natural gas trade abstract a heated debate has arisen over whether the asian premium i e higher prices in asia than elsewhere in natural gas trade is due to price discrimination or different market fundamentals determining the origin of this premium can help to guide the gas industries and policy makers in asia especially when the traditional oil indexed price mechanism fades away using a new systemic time series approach this paper explores the extent to which oil prices and market fundamentals contribute to variations in gas prices in japan the united states and germany we find clear cross country differences and time varying patterns gas prices are much less affected by supply and demand factors than oil prices in japan and germany whereas these factors are more important than oil prices in the us market which has a pricing hub through rolling windows and subsample analysis we discover that oil prices were important in japan and germany but the level of importance has declined significantly in recent years though the contribution of fundamentals does not change much the results show that asian gas prices are determined more by oil prices than by the market fundamentals thus the asian premium is more likely due to this oil indexed pricing mechanism rather than market fundamentals this suggests that developing asia s benchmark prices through trading hubs with a better reflection of regional specific fundamentals can lead to a more efficient allocation of gas resources

shale gas policy in the united kingdom an argumentative discourse analysis shale gas has become an energy policy priority in the united kingdom in light of profitable extraction activities in the united states since 2012 the coalition government has created key economic drivers to encourage shale exploration whilst growing activism in affected site communities has stirred significant media and academic commentary this study examines the growing national debate as a matter of discourse adopting an argumentative discourse analytic approach to assess data collected from stakeholder interviews n 21 and key policy actor statements quoted in broadsheet newspapers we explore three dominant storylines emerging in relation to shale gas policy 1 cleanliness and dirt concerns the relative framing of the environmental benefits and harms of shale gas 2 energy transitions pathways and diversions concerns geographic metaphors of transitions to carbon intensive and low carbon energy systems and 3 geographies of environmental justice concerns divisions of economic benefit distribution environmental impact and procedural fairness we find that central government policy rhetoric emphasises economic development regulatory oversight and distribution of benefits to site communities whilst minimising discussion of the implications of shale gas for anthropogenic climate change the role of these discourses in influencing shale gas policy is discussed

shale gas analysis of its role in the global energy market shale gas revolution that took place in the united states at the beginning of the 21st century has still been shaping our global fossil fuel market in 2012 the u s has surpassed russia in natural gas production for the first time since 1982 at the same year annual average u s henry hub natural gas spot price decreased to 2 75 per million btu which was 8 69 per million btu in 2005 in 2013 proved shale gas reserves of the world is estimated at nearly 2 7 trillion cubic metres tcm and unproved resources at staggering 203 9 tcm as a result there is a global rush to develop most of this resource as possible however shale gas is no miracle fuel it has been suggested that its effects on the environment could be worse than conventional natural gas fugitive methane emissions groundwater pollution and increased seismicity are amongst the most important potential environmental side effects there is also concern about the accuracy of resource potential estimations due to lack of data and specifically designed shale gas reservoir models nonetheless the analysis in this study clearly showed that without developing global shale gas resources we have to consume 66 of our proved natural gas reserves to supply the demand till 2040 this would make most of the world natural gas importers and rules of economy dictate that limited supply and increasing demand would skyrocket natural gas prices therefore shale gas resource development is not an option but a must for the continuance of our global energy market and economy

do antitrust laws facilitate collusion experimental evidence on costly communication in duopolies bertrand supergames with non binding communication are used to study price formation and stability of collusive agreements on experimental duopoly markets the experimental design consists of three treatments with different costs of communication zero cost low cost and high cost prices are found to be significantly higher when communication is costly moreover costly communication decreases the number of messages but more importantly it enhances the stability of collusive agreements mccutcheon 1997 presents an interesting application to antitrust policy by letting the cost of communication symbolize the presence of an antitrust law that prohibits firms from discussing prices although our experimental results do not support the mechanism of mccutcheon s 1997 argument the findings point in the direction of her prediction that antitrust laws might work in the interest of firms

payoff levels loss avoidance and equilibrium selection in games with multiple equilibria an experimental study i introduction game theoretic solution concepts carry the implication that a change in payoff levels a modification to a game by adding the same positive or negative constant to all payoffs should have no effect on behavior such changes do not affect expected payoff differences between strategies under any given beliefs about opponents actions so that best response correspondences and therefore nash equilibria pure or mixed are unaffected when the game has multiple nash equilibria game theory does not rule out the possibility that payoff level changes will lead to a change in which equilibrium is played but it does not predict when such sensitivity will be present or how it will be manifested when the game has a unique equilibrium game theory specifically predicts that changing payoff levels can have no effect so game theory is at least silent as to whether changes in payoff levels can affect players choices and at most explicitly rules out such an effect this implication relies however on the game s payoffs reflecting the true preferences of the players that is the equivalence between payoffs and expected utilities when payoffs are monetary gains or losses as in economics experiments with human subjects this equivalence cannot be taken for granted and the robustness of behavior to changes in payoff levels becomes an empirical question indeed there is evidence dating back at least to kahneman and tversky 1979 suggesting that payoff level changes can affect behavior 1 while their prospect theory was not developed specifically with payoff level effects in mind it can in some cases yield specific predictions for how they ought to affect behavior more recently cachon and camerer 1996 found that decisions in a coordination game experiment could be sensitive to changes in payoff levels when these changes affected the signs of payoffs positive payoffs became negative or vice versa they noted that their results could be explained by loss avoidance which they defined to be a tendency to avoid choices that with certainty yield negative payoffs in favor of alternatives that could yield positive payoffs 2 on the basis of this finding they conjectured that loss avoidance could be used as a criterion for equilibrium selection cachon and camerer s notion of loss avoidance is one of several ways that individuals could treat losses and gains differently in this paper we distinguish between their notion which we call certain loss avoidance and another type which we call possible loss avoidance and define as a tendency to avoid strategies that give a possible negative payoff in favor of one that gives a certain positive payoff we will sometimes use the term loss avoidance to encompass both certain and possible loss avoidance 3 the goal of this paper is to test for loss avoidance in strategic behavior in cases where payoffs are expected money payments to do so we design and conduct an experiment using a stage game well suited for such a test stag hunt a symmetric two player game with one risky action and one safe action and with multiple nash equilibria figure 1 shows three versions of stag hunt with the risky and safe actions labeled r and s these games differ only in payoff level so they are equivalent from a game theoretic standpoint as long as the payoffs represent the players preferences for example they have the same three nash equilibria the pure strategy equilibria r r and s s and a mixed strategy equilibrium in which both players choose r with probability 2 3 when these payoffs represent monetary gains and losses then despite this seeming equivalence our notions of loss avoidance make qualitative predictions regarding how individuals choices might change across the games in the high payoff game shh all payoffs are gains so neither type of loss avoidance will have an effect on behavior

how do oil price shocks affect the output volatility of the u s energy mining industry the roles of structural oil price shocks abstract this paper focuses on how explicit structural shocks that characterize the endogenous character of international oil price change affect the output volatility of the u s crude oil and natural gas mining industries to this end we employ a modified structural vector autoregressive model svar to decompose real oil price changes into four components u s supply shocks non u s supply shocks aggregate demand shocks and oil specific demand shocks mainly driven by precautionary demand the results indicate that output volatility of the u s crude oil and natural gas mining industry has significantly negative responses to u s supply shocks aggregate demand shocks and oil specific demand shocks while lacks significant response to non u s supply shocks variance decomposition and historical decomposition confirm that u s supply shocks occupy most explaining variations in output volatility among the four structural oil shocks moreover the oil specific demand shocks explain more variation than that of aggregate demand shocks for the crude oil mining industry but the opposite is true for the natural gas mining industry

financialization fundamentals and the time varying determinants of us natural gas prices abstract increasing empirical evidence shows that natural gas prices have decoupled from oil prices yet there remains an open question as to what are the determining factors of natural gas prices following the demise of oil indexation this paper aims to address this question using a dynamic model averaging dma approach dma can help identify key important price determinants and importantly does so within a time varying framework allowing us to document how the set of determinants has evolved in response to key market changes using time series data between 2001 and 2018 we demonstrate a clear declining role of oil prices in the natural gas pricing mechanism verifying the demise of indexation market or fundamental factors such as weather demand and supply conditions have at the same time become more important in addition our results illustrate an increasing role from financial markets captured by speculation related variables providing empirical evidence to support the recent literature on commodity market financialization the rising impact of speculation to natural gas prices introduces questions over how to balance market efficiency and risk management in the post indexation regime

the impact of the shale gas revolution on the u s and japanese natural gas markets we investigated whether the increase in the us shale gas production changed the structures of the us and japanese natural gas markets using market data for the period 2002 5 2012 5 our analysis consists of a structural break test and market integration analysis the bai and perron structural break test detected a break point of natural gas prices and consumption in 2005 as well as other external shocks hurricane katrina and the lehman shock that are irrelevant to shale gas development we eliminated the impact of these shocks by separating the data set using the breaks identified in our analysis we found the breaks skewed the estimation a market linkage existed between the us and japanese markets in the original data set while it did not in the separated data the vector autoregressive var model also indicated a significant change before and after the break point the us market had a one side influence on the japanese market before 2005 but the influence disappeared after 2005 our results implied that the shale gas revolution triggered by the increase in shale gas production in 2005 caused the change in the relationship between the us and japanese natural gas markets

structural breaks in international tourism demand are they caused by crises or disasters it is recognised that the tourism industry is vulnerable to some form of crises or disaster however despite the attention given to the nature and consequences of tourism crises and disasters there is a gap in the literature regarding the ex post detection of these events in this article we estimate both the number and date of structural breaks in international tourism arrival series for 25 countries and madeira island using the bai and perron 1998 structural break test we compare the date of tourism crises and disasters to the dating of these structural breaks we observe that tourism crises and disasters are largely consistent with the dates of breaks therefore this method allows us to solve a gap in the tourism industry related to the correct allocation of negative shocks in international tourism arrival demand to crisis or disaster phenomena

the higher educational transformation of china and its global implications higher educational transformation of china this paper discusses the major transformation of higher education that has been under way in china since 1999 and evaluates its potential global implications reflecting china s commitment to continued high growth this transformation focuses on major new resource commitments to tertiary education and significant changes in organisational form all of these changes have already had large impacts on china s higher educational system and are beginning to be felt by the global educational structure this focus on tertiary education differentiates the chinese case from other countries who earlier at similar stages of development instead stressed primary and secondary education

further evidence on the debate of oil gas price decoupling a long memory approach abstract the long run oil gas price relationship has been challenged more often in recent years as these two prices have shown evidence of decoupling from each other this paper proposes the use of a long memory approach and a rolling windows method to model the time varying oil gas price relationship in three markets namely the united states europe and japan the results extend existing research conclusions on the oil gas price relationship and answer the question of whether it is a temporary phenomenon or a permanent market change our findings indicate that the us oil gas relationship remains nonstationary at almost all windows and illustrate strong evidence of decoupling conversely the european and asian oil gas prices exhibit temporary decoupling over time although the overall relationship still favours the oil indexation hypothesis the us experience suggests that oil and gas do not share the same fundamentals and a pricing hub can better reflect the true value of natural gas policy makers in europe and asia should reinforce their efforts towards a market based pricing mechanism for gas

labor migration and returns to rural education in china this paper provides an answer to the following question why do empirical studies find low returns to schooling in rural china and yet the schooling rates are high i find that schooling played a significant role in raising the accessibility of urban formal employment to rural people in the late 1970s and early 1980s in the face of the government s restrictive policy on labor migration from rural to urban areas the large urban rural income difference provided a strong incentive for senior high school education the theory also explains the drop in the senior high school attendance in the mid 1980s

gas versus oil prices the impact of shale gas abstract what significance will developments in shale gas production have for european gas prices some commentators paint a gloomy picture of the future gas markets but most forecasts for the oil market are positive consequently a view appears to prevail that price trends will differ sharply between oil and gas markets this article looks at developments in us shale gas production and discusses their impact on the movement of european gas prices the relationship between oil and gas prices over time is also analysed

natural resources and the tradeoff between authoritarianism and development abstract why do african and middle eastern countries seem cursed by an abundance of natural resources yet usa australia and norway seem blessed a growing literature has argued that the benevolence or malignance of natural resources depends upon the quality of institutions this paper offers a new explanation based on associational freedom and its interaction with the political system the model predicts that natural resources have an adverse impact on economic performance and transition to democracy in authoritarian regimes but not in democracies it also predicts that repression of associational freedom will be increasing in natural resources in authoritarian regimes i test the model s predictions using fixed effects regressions on an international panel from 1975 to 2000 and find support

risk attitudes and the stag hunt game a stag hunt game with the risky and safe actions has two pure nash equilibria that are pareto rankable the risky action leads either to the pareto superior equilibrium high payoff or to out of equilibrium low payoff depending on the opponent s action both players may want to obtain high payoff but uncertainty about the opponent s action may prevent them to take such strategic risk this paper investigates how information about the risk attitude of an opponent affects a player s action choice in the stag hunt game i find that although a subject s propensity to choose the risky action depends on her opponent s risk attitude it does not depend on her own risk attitude

communication and efficiency in competitive coordination games costless pre play communication has been found to effectively facilitate coordination and enhance efficiency in games with pareto ranked equilibria we report an experiment in which two groups compete in a weakest link contest by expending costly efforts allowing intra group communication leads to more aggressive competition and greater coordination than control treatments without any communication on the other hand allowing inter group communication leads to less destructive competition as a result intra group communication decreases while inter group communication increases payoffs our experiment thus provides an example of an environment where communication can either enhance or damage efficiency this contrasts sharply with experimental findings from public goods and other coordination games where communication always enhances efficiency and often leads to socially optimal outcomes

world crude oil and natural gas a demand and supply model abstract this paper examines world markets for crude oil and natural gas over the period 1918 1999 it analyzes the time series properties of output and prices and estimates demand and supply elasticities during 1918 1973 and 1973 1999 oil and gas prices were stable during the first period they became volatile afterwards reflecting deep changes in the market structure following the oil shock in 1973 demand price elasticities were too low however demand income elasticities were high supply price elasticities were also too low the elasticity estimates help to explain the market power of the oil producers and price volatility in response to shocks and corroborate elasticity estimates in energy studies

the role of underground storage in the dynamics of the us natural gas market a threshold model analysis abstract natural gas is an important source of energy in the global economy hence understanding the drivers of its prices is of significant interest for the many economic agents this paper investigates the role of inventories for the dynamics of the u s natural gas market our contribution is twofold first within the threshold structural var framework we demonstrate that in a low inventory regime spot prices are more responsive to economic fundamentals in comparison to situation in which the inventories are high second we present evidence that the level of natural gas inventories have a significant effect on the relationship between spot and futures prices

a numerical simulation analysis of hukou labour mobility restrictions in china abstract we use numerical simulation methods to analyze the hukou system of permanent registration in china which many believe has supported growing relative inequality over the last 20 years by restraining labour migration both between the countryside and urban areas and between regions and cities our aim is to inject economic modelling into the debate on sources of inequality in china which thus far has been largely statistical we first use a model with homogeneous labour in which wage inequality across various geographical divides in china is supported solely by quantity based migration restrictions urban rural areas rich poor regions eastern central and western non coastal zones eastern and central western development zones eastern central western zones more disaggregated 6 regional classifications and an all 31 provincial classification we calibrate this model to base case data and when we remove migration restrictions all wage and most income inequality disappears results from this model structure points to a significant role for hukou restrictions in supporting inequality in china we then present a further model extension in which urban house price rises retard rural urban migration the impacts of removing hukou restrictions on migration are smaller but are still significant finally we modify the model to capture labour productivity differences across regions calibrating the modified model to estimates of both national and regional gini coefficients removal of migration barriers is again inequality improving but less so