market approval of phytosanitary active substances in europe an empirical duration analysis abstract the aim of this paper is to analyze empirically the main determinants of delays to market approval of active substances in europe an interesting feature of this regulation is that it is based on both a decentralized examination by the rapporteur country and a centralized examination by the european food safety authority efsa our econometric analysis is based on standard survival and competing risks models the data cover 393 active substances reviewed between 1993 and 2013 we show that the review process is affected by regulatory factors the characteristics of the active substances and the characteristics of agri chemical firms log logistic and log normal survival models are the preferred parametric specifications and the results suggest that the hazard function is non monotonic over time

north south standards harmonization and international trade recent years have seen a surge in economic integration agreements eias and the development of non tariff measures ntms as a consequence a growing number of eias include provisions on ntms however little attention has been given in the literature to the effects of ntm liberalization in the context of eias in this paper we focus on provisions for technical regulations and analyze whether the north south harmonization of technical barriers affects international trade using a gravity equation it tests whether as a result of the deep integration associated with standards provisions included in the eia the southern partners trade expands with the north but at the expense of their trade with non bloc southern partners empirical results provide strong support for this conjecture moreover harmonization on the basis of regional standards negatively impacts the exports of developing countries to the north

the behavior of prices in the nikkei spot and futures market abstract we examine the relation between the prices of japanese stocks traded on the tokyo stock exchange tse as reflected in the nikkei stock average nsa stock index and the prices of the nsa futures contract traded on the singapore international monetary exchange simex since the inception of trading in september 1986 the nsa futures contract has generally sold at a discount relative to its theoretical value trading restrictions and transaction costs may explain some of this mispricing which has been declining over time as in the u s markets

the impact of regulatory heterogeneity on agri food trade we estimate the impact of regulatory heterogeneity on agri food trade using a gravity analysis that relies on detailed data on non tariff measures ntms collected by the ntm impact project the data cover a broad range of import requirements for agricultural and food products for the eu and nine of its major trade partners we find that trade is significantly reduced when importing countries have stricter maximum residue limits mrls for plant products than exporting countries for most other measures due to their qualitative nature we were unable to infer whether the importer has stricter standards relative to the exporter and we do not find a robust relationship between these measures and trade our findings suggest that at least for some import standards harmonising regulations will increase trade we also conclude that tariff reductions remain an effective means to increase trade even when ntms abound

the strategic bequest motive although recent research suggests that intergenerational transfers play an important role in aggregate capital accumulation our understanding of bequest motives remains incomplete we develop a simple model of strategic bequests in which a testator influences the decisions of his beneficiaries by holding wealth in bequeathable forms and by conditioning the division of bequests on the beneficiaries actions the model generates falsifiable empirical predictions that are inconsistent with other theories of intergenerational transfers we present econometric and other evidence that strongly suggests that bequests are often used as compensation for services rendered by beneficiaries

inter vivos transfers and intergenerational exchange the surge of interest in intergenerational transfers in the past decade has sparked a debate over the motivation for them are transfers given out of altruism or part of an exchange while each motive is probably at work to some extent we know little about whether one motive predominates the question is relevant for issues concerning public income redistribution and inequality in the family but despite its importance empirical evidence about motives is scarce because of limited data we investigate a new data set the national survey of families and households which remedies many of the shortcomings of other data sets containing private transfer information we find that empirical patterns for inter vivos transfers i e transfers between living persons are more consistent with exchange than altruism

reexamining intraday simultaneity in stock index futures markets abstract this note examines three empirical examples involving intraday dynamic relationships associated with stock index futures markets researchers often employ a vector autoregressive var model to analyze such high frequency transactions data while such a model can provide useful information regarding the nature of causal priority inherent in the data it is not the proper model to investigate the structural relationships of interest because it omits the contemporaneous interaction on the other hand a var model specification which is altered to incorporate simultaneity may enable the data to reveal the structural relationships of interest

shaping intergenerational relationships the demonstration effect abstract according to the demonstration effect theory parents make intergenerational transfers to their elders in order to elicit a symmetric future behavior from their children in this paper we show that upstream transfers are expected to increase with low returns from alternative financial assets and with the donor s life expectancy the latter effect creates a greater incentive for daughters to care for parents

implementation of ururguay round commitments the development challenge at the uruguay round developing countries took on unprecedented obligations not only to reduce trade barriers but to implement significant reforms both of trade procedures e g import licensing procedures customs valuation and of many areas of regulation that establish the basic business environment in the domestic economy e g technical sanitary and phytosanitary standards sps intellectual property law implementing such reforms are investment decisions in that implementation will require purchase of equipment training of people establishment of systems of checks and balances etc this will cost money and the amounts of money involved are substantial based on world bank project experience in the areas covered by the agreements an entire year s development budget is at stake in many of the least developed countries least developed country institutions in these areas are weak and would benefit from strengthening and reform however the authors analysis indicates that the world trade organization wto obligations reflect little awareness of development problems and little appreciation of the capacities of the least developed countries to carry out the functions that sps customs valuation intellectual property etc regulations address the content of these obligations can be characterized as the advanced countries saying to the others do it my way the authors touch at the beginning on another important point because of their limited capacity to participate in the uruguay round negotiations the wto process has generated no sense of ownership of the reforms to which wto membership obligates them from their perspective the implementation exercise has been imposed in an imperial way with little concern for what it will cost how it will be done or if it will support their development efforts this abstract was borrowed from another version of this item

differential impacts of country of origin labeling cool econometric evidence from cattle markets abstract country of origin labeling cool occurs routinely for many products in many places but the us implementation of mandatory cool for meat whose purpose is to identify the origin of the livestock used to produce the meat generated much controversy and a major wto dispute that has yet to be settled this paper estimates econometrically differential market impacts of mandatory cool on cattle raised in canada and imported into the united states we find significant evidence of differential impacts of cool through widening of the price bases and a decline in ratios of imports to total domestic use for both fed and feeder cattle

the impact of regulations on agricultural trade evidence from the sps and tbt agreements according to world trade organization rules countries may adopt regulations under the agreements on sanitary and phyto sanitary sps and technical barriers to trade tbt we analyze the structure of these measures in agricultural trade the inventory approach suggests that european countries have among the lowest coverage ratios of all oecd countries using a gravity equation we also estimate their stringency our results suggest that they significantly reduce developing countries exports to oecd countries but do not affect trade between oecd members furthermore european imports are more negatively influenced by sps and tbts than imports of other oecd countries

a reexamination of the strategic bequest motive this paper investigates the strength of the empirical evidence of the strategic bequest hypothesis proposed by bernheim shleifer and summers 1985 at issue is whether bequests are primarily motivated by a desire to influnce the behavior of potential beneficiaries alternatively bequests may be motivated by altruism or risk aversion in the presence of incomplete annuity and health insurnace markets e g tomes 1981 hurd 1989

disguised protectionism and linkages to the gatt wto member states of the gatt wto have linked some issue areas outside trade to the institution and did so with varying depths at the same time they have chosen not to link other issue areas what accounts for this variation the author argues that states establish a legalized linkage between the gatt wto and an issue area outside it when they are uncertain about the possibilities of disguised protectionism such uncertainty exists under two conditions when diversity in regulations in an issue area across states generates a large adverse impact on trade negative externalities but that diversity can be justified at the international level for 1 having an independent objective apart from hampering trade and 2 when there are few alternative policies to achieve that objective legitimacy states establish a highly legalized linkage in these situations to reduce the uncertainty and minimize disguised protectionism by contrast when regulatory diversity exhibits low legitimacy states establish only a weakly legalized linkage in the absence of meaningful externalities they do not establish any linkages the author evaluates this argument in two ways he provides an overview of eleven issue areas about which there have been some debates or conflicts about linkages to the gatt wto in addition he carries out in depth case studies of three issue areas labor standards environmental standards and health safety standards the findings of this article contribute to a better understanding of international institutions and cooperation as well as of the evolution of the multilateral trade institution

an assessment of environmentally related non tariff measures international trade can affect the environment in different ways this may justify the introduction of border measures by the importing countries in addition to various dispositions in the gatt gats trips agreements as well as in the agreement on agriculture this issue is regulated by the agreements on technical barriers to trade tbt and on the application of sanitary and phyto sanitary standards sps despite these rules abuse of environmental arguments for protectionist reasons remains an open issue in order to disentangle protectionism from dispositions justified on the grounds of true environmental concerns we systematically review notifications of sps and tbts by importing countries at the tariff line level trade is considered as being potentially affected when an environmental sps tbt is notified on grounds of environmental concerns affected trade is defined as imports by countries notifying such barriers protectionist use of environmental barriers is likely when only a limited number of countries impose an environmental obstacle on the imports of a given product considering data for 2001 we find that 88 per cent of the value of world trade is in products potentially affected by such measures while 39 per cent of the value of world imports is potentially subject to a protectionist use of such measures agriculture the automobile industry the pharmaceutical industry and many other sectors are concerned

is the extended family altruistically linked direct tests using micro data this paper uses panel study of income dynamics data on parents and their adult children to test the standard altruism model this model predicts that within the extended family the distribution of consumption is independent of the distribution of resources the authors findings strongly reject this prediction copyright 1992 by american economic association

inheritance and labor supply using data from the michigan panel study of income dynamics and from federal estate tax returns this paper investigates the labor disincentive caused by inheritance the results are of interest for several reasons whether or not inheritances are a strong labor disincentive figures prominently in the controversy surrounding the relative importance of inheritances and life cycle savings as sources of u s wealth also the size of the disincentive is important in determining the relationship between inheritance and inequality our results indicate that inheritances do not lead to large reductions in the labor supply of men and married women family consumption increases after an inheritance but again the effect is small

a comparison of futures and forward prices abstract this paper uses the pricing models of cox ingersoll and ross 1981 richard and sundaresan 1981 and french 1982 to examine the relation between futures and forward prices for copper and silver there are significant differences between these prices the average differences are generally consistent with the predictions of the futures and forward price models however these models are not helpful in describing intra sample variations in the futures forward price differences this failure is apparently caused by measurement errors in both the price differences and in the explanatory variables

the combination of gravity and welfare approaches for evaluating nontariff measures this article explores the link between gravity and welfare frameworks for measuring the impact of nontariff measures first an analytical approach suggests how to combine a gravity equation with a partial equilibrium model to determine the welfare impact of nontariff measures second an empirical application focuses on the effects of a standard that caps antibiotic residues in crustaceans in the united states the european union canada and japan while the econometric estimation of the gravity equation reports a negative impact on imports welfare evaluations show that in most cases a stricter standard leads to an increase in both domestic and international welfare

can public private partnerships leverage private investment in agricultural value chains in africa a preliminary review summary public private partnerships ppps may be one way of increasing the level of private sector investment into poorly performing agricultural value chains this paper considers a range of ppp mechanisms that respond to different market failures affecting such chains and draws on principal agent theory to illustrate the challenges it reviews emerging experience with a number of these mechanisms along with experience from other sectors that may shed light on generic problems of implementing ppps in africa while finding some positive impacts on investment it notes that state failures can also undermine ppp effectiveness as the evidence base is still limited it calls on organizations promoting innovative ppps to disclose available information for critical examination

explaining the early discounts on stock index futures the case for disequilibrium 1984 explaining the early discounts on stock index futures the case for disequilibrium financial analysts journal vol 40 no 4 pp 43 47 67

the economic implications of using haccp as a food safety regulatory standard abstract this article discusses the nature and role of hazard analysis critical control point haccp as a food safety control system and in particular its role as an element of public food safety regulation the notion of efficiency in food safety regulation is discussed and related to the nature of food safety controls it is suggested that if appropriately applied haccp is a more economically efficient approach to food safety regulation than command and control cac interventions the economic implications of haccp are discussed with reference to estimates of the costs and benefits in particular for the food industry finally the use of haccp as an international trade standard and the facilitation of trade in processed food products is considered

arbitrage opportunities in the japanese stock and futures markets 1990 arbitrage opportunities in the japanese stock and futures markets financial analysts journal vol 46 no 2 pp 14 24

alternative approaches to evaluation in empirical microeconomics four alternative but related approaches to empirical evaluation of policy interventions are studied social experiments natural experiments matching methods and instrumental variables in each case the necessary assumptions and the data requirements are considered for estimation of a number of key parameters of interest these key parameters include the average treatment effect the treatment on the treated and the local average treatment effect some issues of implementation and interpretation are discussed drawing on the labour market programme evaluation literature

stock index futures arbitrage in finland theory and evidence in a new market abstract this paper examines the pricing of stock index futures contracts on the new finnish market the striking feature of the finnish market is that there is no institutional framework for short selling of stocks this has been suggested to be the most important reason for the underpricing futures contracts persistent mispricing would however imply that also early and delayed unwindings have value which increases the arbitrage profits several rollover profits are reported in this study this suggest that current stock owners have not yet begun trading on the finnish futures market on a large scale

the role of private standards for manufactured food exports from developing countries summary the relevance of non tariff barriers for global trade flows has increased in recent decades however the effect of food standards as a particular important non tariff measure on agricultural trade flows remains unclear we contribute to the debate with a unique dataset that contains the number of food processing firms of 87 countries from 2008 to 2013 that are certified with the international featured standard ifs we estimate a gravity model using the one year lag of ifs as well as ifs certification in neighboring countries as an instrument to address potential endogeneity we find that ifs increases c p bilateral exports on average of seven agricultural product categories in both specifications however the effect remains robust only for high and middle income countries and disappears for low income countries hence while ifs increases exports on average low income countries do not benefit in terms of higher export volumes moreover once we separate the dataset by sector the trade enhancing effect remains for bakery dairy and beverage sectors only overall we argue that food standards are not a suitable development tool to integrate low income countries into high value chains per se

intraday relationships among index arbitrage spot and futures price volatility and spot market volume a transactions data test abstract this paper examines intraday temporal relationships among arbitrage spreads cash and futures price volatility and cash trading volume using transactions data for the major market index futures contracts and the component stocks of the index results indicate that changes in the spread have a significant impact on cash and futures price volatility as well as on cash trading volume the impact of the spread however is attenuated by the short sale restriction in the cash market contrary to popular beliefs a more volatile market leads to subsequent decreases in the spread probably because of increases in the supply of arbitrage services or faster price adjustments

can agricultural traders be trusted evidence from coffee in ethiopia summary traditional food marketing systems in developing countries are often not trusted in consequence policy makers frequently try to regulate them and modern marketing arrangements are increasingly emerging to address some of their presumed deficiencies however it is unclear how trustworthy these markets actually are the purpose of this study is to look at these issues in the case of coffee marketing in ethiopia coffee markets in ethiopia present an interesting case study due to the high price and quality differentiation linked to a number of both easily and not so easily observable characteristics moreover modern marketing practices such as modern retail branding and packaging are becoming increasingly common in ethiopia s urban coffee markets when we define and examine trustworthiness in the addis ababa coffee market as a function of weights and quality we find that traditional traders are relatively trustworthy on observable quality characteristics and weights however there is a consistent pattern of over representation of not so easily verifiable quality characteristics we further find that modern marketing outlets or formats including modern domestic retail and branded packaged products deliver higher quality at a higher price but are not more trustworthy than traditional marketing arrangements in terms of these dimensions of trade transactions

assessing the benefits of trade facilitation a global perspective this paper estimates the relationship between trade facilitation and trade flows using a panel of disaggregated manufactured goods for the 2000 2001 period for 75 countries four categories of trade facilitation are defined measured and assessed for their impact on bilateral trade flows using a gravity model the four measures of trade facilitation are port infrastructure air and maritime customs environment regulatory environments and e business infrastructure the results suggest that raising global capacity halfway to the world average in the four areas would increase trade by 377 billion most regions of the world increase exports more than imports in large part this result stems from increased exports to oecd markets that is obtained through a country s own effort to improve ports customs regulations and services infrastructures in addition the results suggest that reform and capacity building in trade facilitation in areas related to gatt articles v viii and x that are under discussion at the world trade organisation could expand trade and exports significantly many of the reform measures necessary to achieve this goal need not necessarily require large scale investment projects but rather action in legal and administrative reform to facilitate trade

intra family transfers in japan intergenerational co residence distance and contact classified broadly two motives for intra family transfers exist altruism and selfishness this paper examines two selfish hypotheses the exchange motive strategic bequest motive and the demonstration effect using a new japanese microdata set analysis of the determinants of intergenerational co residence distance between residences and frequency of contact yields considerable support for the exchange motive but no support for the demonstration effect the findings are consistent with the exchange motive after distinguishing it from mutual altruism

private intergenerational contact in france and the demonstration effect this study analyses motives for intergenerational contact from adult children to their middle aged parents if these transfers may be explained either by altruism or by exchange we mainly focus on the demonstration effect where households take care of their own parents in order to elicit a future support from their children we test the model using a cross sectional survey from 1992 about private transfers in france according to the data the presence of children increases the amount of visits that respondents provide to their parents and the econometric results still hold after controlling for unobserved familial heterogeneity using fixed effects although this empirical evidence is consistent with the demonstration effect we suggest an alternative interpretation for the positive correlation based on the care of grandchildren

does futures trading increase stock market volatility the case of the nikkei stock index futures markets abstract we propose new tests to examine whether stock index futures affect stock market volatility these tests decompose spot portfolio volatility into the cross sectional dispersion and the average volatility of returns on the portfolio s constituent securities our tests show that for nikkei stocks spot portfolio volatility increased and cross sectional dispersion decreased compared with average volatility when nikkei futures began trading on the osaka securities exchange but not on the singapore international monetary exchange for non nikkei stocks no shift occurred when futures trading began on either exchange these findings are consistent with the hypotheses that futures trading increases spot portfolio volatility but that there is no volatility spillover to stocks against which futures are not traded however the increase in volatility attributable to futures trading is small compared with volatility shifts induced by changes in broad economic factors

short sale restrictions implications for stock index arbitrage abstract this paper offers a study of relevant transaction costs when examining the efficiency of stock index futures markets we suggest that a different transaction cost estimate should be used when testing the upper side of the cost of carry model than when testing the lower side of the model empirical evidence indicates that this explains most of the underpricing observed in the finnish stock index futures market

the relationship between daily u s and japanese equity prices evidence from spot versus futures markets abstract the daily and overnight transmission of equity prices between the u s and japan is examined in this paper this study documents that the use of the opening value of an equity index to represent equity prices at the open is unlikely to be reliable and the calculated opening values of the nikkei 225 and especially the s p500 indexes mostly reflect prior days closing prices unlike prior studies this paper accounts for this problem of non synchronous trading at the open and finds that u s equity prices do not lead japanese equity prices as both u s and japanese opening equity prices reflect overnight price changes in the other market

the impact of sanitary and phytosanitary measures on market entry and trade flows in an attempt to disentangle the impact of sanitary and phytosanitary sps measures on trade patterns we estimate a heckman selection model on the hs4 disaggregated level of trade we find that aggregated sps measures constitute barriers to agricultural and food trade consistently to all exporters but conditional on market entry trade flows are positively affected by sps measures additionally we find that sps measures related to conformity assessment hamper market entry and trade flows while sps measures related to product characteristics pose an entry barrier but increase bilateral trade flows conditional on meeting the standard

index futures arbitrage and the behavior of stock index futures prices this article examines intraday transaction datafor s p 500 stock indexfutures prices and the intraday quotes for the underlying index the data indicate that thefutures price changes are uncorrelated and that the variability of these price changes exceeds the variability ofprice changes in the s p 500 index this excess variability of the futures over the index remains even after controlling for the nonsynchronous prices in the index quotes which induces autocorrelation in the index changes we advance and examine empirically two hypotheses regarding the difference between the futures price and its theoretical value that this mispricing increases on average with maturity and that it is path dependent evidence supporting these hypotheses is presented

the development of private fresh produce safety standards implications for developing mediterranean exporting countries integration into global markets offers the potential for more rapid growth and poverty reduction for poorer countries however market barriers within advanced economies to agricultural imports have made it harder for developing countries to take full advantage of this opportunity this article examines the impact of increasing demands for food safety and quality by european food retailers and how the fundamental structure and culture of supplier organisations required by european retail chains are a major entry barrier for developing mediterranean fresh produce exporting countries and for developing countries in general the long term solution for such countries to sustain an international demand for their products lies in structural strategic and procedural initiatives that build up the trust and confidence of importers retailers in the quality and safety assurance mechanisms for their produce

quantification of sanitary phytosanitary and technical barriers to trade for trade policy analysis this paper presents promising methodologies for modeling and quantifying non tariff barriers ntb to trade in the agricultural and food sectors we limit the analysis to sanitary phytosanitary and technical regulations that can have an impact on trade and to methods that provide some quantitative estimates of the impact of such barriers on market equilibrium trade flows economic efficiency and welfare given the heterogeneous nature of these regulations a unifying methodology does not exist quantification of the effects of such measures has focused on a particular product and has relied on methods that belong to different fields of the economic literature we provide a concise description and evaluation of the various methods available for a more comprehensive assessment of the impact of ntbs on trade and welfare we conclude by identifying promising areas for future applied research

do sanitary phytosanitary and quality related standards affect international trade evidence from chilean fruit exports summary increasing awareness of food safety issues has led to intensive use of sanitary phytosanitary and quality related regulations and standards imposing a burden on exporting countries worldwide this study assesses the impact of such regulations and standards estimating a gravity model for chilean fresh fruit exports that incorporates a stringency perception index that comprises different dimensions of trade requirements our results suggest that an increase in stringency has a negative and substantial effect on exported volumes and the reduction is higher if stringency increases in developed countries results also showed that different dimensions have different effects on trade

evaluating the trade restrictiveness of phytosanitary measures on u s fresh fruit and vegetable imports empirically assessing sanitary and phytosanitary regulations has proven difficult because most data sources indicate whether a regulation exists but provide no information on the type or importance of the respective measure in this article we construct a novel database of u s phytosanitary measures and match these to 47 fresh fruit and vegetable product imports from 89 exporting countries over the period 1996 2008 a product line gravity equation that accounts for zero trade flows is developed to investigate the trade impact of different pest mitigation measures while the results suggest that phytosanitary treatments generally reduce trade the actual restrictiveness of these measures diminishes dramatically as exporters accumulate experience and it vanishes when exporters reach a certain threshold the results have important policy implications considering the number of empirical studies that find a negative impact of non tariff measures on trade copyright 2013 oxford university press

haccp as an international trade standard the widening international use of hazard analysis critical control point haccp approaches by regulators and industry should facilitate trade of food products as countries and companies adopt roughly similar food safety assurance systems first and foremost however adoption of haccp principles is motivated by a desire to improve food safety particularly by the control of food borne pathogens in a manner that passes benefit cost or market tests for regulators trade facilitation is an important but often clearly secondary goal of haccp adoption that it is part of the goal set is due in part to recent trade agreements that seek to limit nontariff barriers to trade arising from food safety sanitary and phytosanitary regulations the pressure to reduce these barriers has led to a focus on haccp adoption as a vehicle for reconciling regulations across countries through various means of regulatory rapprochement this goal hierarchy with improved safety first and trade facilitation second is useful in explaining the likely operation of haccp as an international trade standard in the next decade 2

motives for private income transfers private income transfers are becoming increasingly recognized as a key aspect of the u s economy the majority of private income transfers occur inter vivos i e between living persons but very little is known about this type of transfer behavior this paper tests alternative hypotheses concerning motivation for inter vivos transfers two motives are considered altruism and exchange evidence presented here casts doubt on the altruistic model of transfer behavior observed patterns for inter vivos transfers are more consistent with exchange related motives this finding has important implications for the effects of public transfer programs on the distribution of economic well being

import restrictions in the presence of a health risk an illustration using fmd we present a simple model linking infection risk from imports to a tariff the risk causes the exporter of the infected product to face a higher tariff than would otherwise be the case a numerical example is developed for u s beef imports from nations with foot and mouth disease fmd the additional tariffs are sensitive to the specification of risk and the expected magnitude of loss due to an fmd outbreak for a low risk of importing fmd the tariffs levied against the exporter of fmd infected beef are not prohibitive but become so as the risk or expected output loss rises

to spray or not to spray pesticides banana exports and food safety how governments regulate food safety and environmental protection including pesticide residue levels has important implications for trade the world trade organization wto ministerial held in doha qatar in november 2001 included statements on standards and their impact on market access for developing countries these issues will continue to be important in trade policy dialogues it is assumed and evidence from recent analysis confirms that food safety standards can affect the ability of agricultural producers to meet regulatory standards set by importing countries the authors explore a fundamental question in food safety and environmental standards do regulations on pesticide have an effect on trade they examine regulatory data from 11 oecd importing countries and trade data from 19 exporting countries the results suggest that a 10 percent increase in regulatory stringency tighter restrictions on the pesticide chlorpyrifos leads to a decrease in banana imports by 14 8 percent this represents a significant impact on trade and affect prospects of developing countries who continue to rely on exports of agricultural commodities such as bananas the findings also suggest that the lack of consensus on international standards and divergent national regulations on pesticides is costly for example the authors estimate that if the world were to adopt a standard at a level of regulatory stringency suggested by codex the body charged with setting global standards in this area in contrast with one set at the level in place in the european union there would be a u s 5 3 billion loss in world exports

parental altruism and inter vivos transfers theory and evidence this paper uses psid data on the extended family to test whether inter vivos transfers from parents to children are motivated by altruism specifically the paper tests whether an increase by one dollar in the income of parents actively making transfers to a child coupled with a one dollar reduction in that child s income results in the parents increasing their transfer to the child by one dollar this restriction on parental and child transfer income derivatives is derived for the standard altruism model augmented to include uncertainty and liquidity constraints these additional elements pin down the timing of inter vivos transfers the method used to estimate income transfer derivatives takes into account unobserved heterogeneity across families in the degree of altruism the findings strongly reject the altruism hypothesis redistributing one dollar from a recipient child to donor parents leads to less than a 13 cent increase in the parents transfer to the child far less than the one dollar increas

taxes and the pricing of stock index futures stock index futures prices are generally below the level predicted by simple arbitrage models this paper suggests that the discrepancy between the actual and predicted prices is caused by taxes capital gains and losses are not taxed until they are realized as constantinides demonstrates in a recent paper this gives stockholders a valuable timing option if the stock price drops the investor can pass part of the loss on to the government by selling the stock on the other hand if the stock price rises the investor can postpone the tax by not realizing the gain since this option is not available to stock index futures traders the futures prices will be lower than standard no tax models predict on 24 february 1982 the kansas city board of trade began trading futures contracts on the value line average stock index during the next two months both the chicago mercantile exchange and the new york futures exchange also initiated trading in stock index futures although these contracts are actively traded their prices have puzzled both practitioners and academics the observed

agricultural trade and the gatt wto does membership make a difference recent empirical studies have estimated the trade flow effect of membership in the world trade organization wto and its predecessor the general agreement on tariffs and trade gatt one important although largely untested conclusion from this literature is that the gatt wto works well if we ignore trade in agriculture one of the institutions seemingly apparent failures this article investigates this conclusion using a large panel of agricultural and non agricultural trade flows the results are impressive the multilateral institution has delivered significant positive effects on members agricultural trade despite its sensitive nature and the reluctance of members to undertake serious reform these findings are robust to various slices of the data and recent advances in the specification and estimation of the gravity equation to account for sample selection issues and the extensive margin of trade copyright 2012 oxford university press

the causal impact of haccp on seafood imports in the u s an application of difference in differences within the gravity model abstract we offer a difference in differences did approach to assess the causal effect of hazard analysis by critical control points haccp a food safety regulation on u s seafood imports with a gravity model and event specific changes with a panel database of u s seafood imports from 217 partner countries from 1991 to 2006 we employ a causal framework of analysis with a treatment group of u s seafood imports and two alternative control groups u s food imports outside of haccp rules and the european union s 15 seafood imports further we assess the effects of haccp on the intensive and extensive margins of u s seafood imports contrary to previous work we find that haacp implementation has no effect on the flow of u s seafood imports while the estimates of the other key variables are consistent across the models seen in previous work thus we find evidence that non tariff measures like haccp had net null effect on imports though the distribution of imports shifted

saving two in a billion quantifying the trade effect of european food safety standards on african exports abstract a growing concern over health risks associated with food products has prompted close examination of sanitary and phytosanitary standards in industrialized countries this paper quantifies the impact of a new harmonized aflatoxin standard set by the eu on food exports from africa we employ a gravity model to estimate the impact of changes in differing levels of protection based on the eu standard in contrast to those suggested by international standards the analysis is based on trade and regulatory survey data for 15 european countries and nine african countries between 1989 and 1998 our results suggest that the implementation of the new aflatoxin standard in the eu will have a negative impact on african exports of cereals dried fruits and nuts to europe the new eu standard which would reduce health risk by approximately 1 4 deaths per billion a year will decrease these african exports by 64 or us 670 million in contrast to regulation set through an international standard

direct tests of index arbitrage models previous tests of stock index arbitrage models have rejected the no arbitrage constraint imposed by these models this paper provides a detailed analysis of actual s p 500 arbitrage trades and directly relates these trades to the predictions of index arbitrage models an analysis of arbitrage trades suggests that i short sale rules are unlikely to affect the cashfutures mispricing ii the opportunity cost of arbitrage funds exceeds the treasury bill rate and iii the average price discrepancy captured by arbitrage trades is small tests of the models provide some support for a version ofthe arbitrage model that incorporates an early liquidation option the ability of these models to explain arbitrage trades however is surprisingly low

technical regulations and specialization in international trade abstract it is widely acknowledged that while technical regulations can improve welfare and facilitate markets they can also impede trade the trade impeding effects of technical regulations are especially worrisome for developing countries they frequently lack the human and capital resources necessary to satisfy technical measures and thus are more likely to be excluded from markets by technical measures this paper uses highly disaggregated us data on agricultural mining and manufacturing imports to examine the impact of technical regulations on trade patterns using instrumental variables estimation to correct for the potential endogeneity of technical regulations the analysis suggests that technical regulations substantially impinge on poor countries exports their weaker capacities to satisfy technical regulations lead them to specialize away from industries with heavier regulatory burdens

the relation between forward prices and futures prices abstract this paper consolidates the results of some recent work on the relation between forward prices and futures prices it develops a number of propositions characterizing the two prices these propositions contain several testable implications about the difference between forward and futures prices many of the propositions show that equilibrium forward and futures prices are equal to the values of particular assets even though they are not in themselves asset prices the paper then illustrates these results in the context of two valuation models and discusses the effects of taxes and other institutional factors

the saga of the first stock index futures contract benchmarks models and learning in the presence of imperfect or perturbed benchmarks pricing based on relative valuation or arbitrage can be affected adversely this study highlights persistent pricing irregularities in the kansas city value line kcvl stock index futures market this contract is especially interesting because the underlying benchmark underwent a midstream change in definition from a complex equally weighted geometric index to an equally weighted arithmetic index empirical analysis reveals that during a four year period the market displayed herd like behavior and priced the kcvl geometric contract using the simple but wrong cost of carry benchmark model a dramatic change occurs around the publication of the eytan harpaz 1986 model when the market turns efficient from the perspective of this new model the market appears to have succumbed initially to a bad information cascade primarily because arbitrage was difficult to understand and carry out under complex benchmarking the evidence provides empirical extension to the observational social learning paradigms of simon 1955 banerjee 1992 and bikhchandani hirshleifer and welch 1992 that lead to behavioral herding and information cascades

informal barriers and agricultural trade does monetary integration matter eu enlargement and the recent sovereign debt crisis of euro zone countries have revived the debate around the european monetary union emu in this article we ask how informal barriers to agricultural and food trade have changed since the introduction of the common european currency and whether this evolution can be attributed to monetary integration we focus on the foreign trade of the 11 emu founder countries over a nine year period covering the creation of the emu and find a diminishing marginal trade impact of both information and institutional barriers we find a lower level of trade barriers but cannot attribute this outcome to the introduction to the euro

forward and futures prices evidence from the foreign exchange markets empirical studies of the treasury bill markets have revealed substantial differences between the futures price and the implied forward price these differences have been attributed to taxes transaction costs and the settling up procedure employed in the futures market this paper examines the forward and futures prices in foreign exchange in an attempt to distinguish between the competing explanations empirical studies of the treasury bill market have revealed differences between the futures price or rate and the implicit forward price derived from the term structure of interest rates 1 these differences have generally been attributed to market imperfections such as taxes and transaction costs see for example arak 1 capozza and cornell 2 and rendelman and carabini 6 recently however cox ingersoll and ross 3 henceforth cir derived a model in which forward and futures prices need not be equal even in perfect markets without taxes as long as interest rates are stochastic the significance of the cir effect may be hard to investigate using only data from the bill market because of the potentially complicating effects of taxes and transaction costs unique to this market by using data from the foreign exchange market we are able to eliminate the tax effect and reduce the impact of transaction costs the question we address is whether the discrepancies observed in the treasury bill market are also observed in the foreign exchange market if they are then we have evidence that the differences are due to a combination of the cir effect and the transaction costs common to both markets if they are not then either the magnitude of the cir effect is much less in the foreign exchange market or the treasury bill results are due to the unique tax treatment and transaction costs of that market this paper is organized as follows in section i the trading mechanics of the forward and futures markets in foreign exchange are discussed section ii reviews the explanations for the discrepancies between the forward and futures prices for treasury bills the institutional differences between the foreign exchange and bill markets are also summarized to show which of these explanations cannot apply to the foreign exchange market in section iii the data are decribed and the empirical results are presented the conclusions are summarized in the final section

the pricing of japanese equity warrants discrepancies between the black scholes value of japanese equity warrants and their observed prices are explained in part by the stochastic volatility of changes in prices of the underlying stocks we fit garch and egarch models to the stochastic volatility and briefly compare their performance to the cev model a hopscotch algorithm is used to value the warrants in the presence of the stochastic stock price volatility the stochastic volatility hopscotch warrant values still differ substantially from corresponding prices in contrast away from the money short term nikkei 225 options valued with the same stochastic volatility models are close to observed prices a regression model is used to fit the differences between warrant values and prices as a function of proxies for market impediments

a measurement of the extent of market imperfections between markets and applications traditionally market imperfections are measured separately in dealing with the impacts of market imperfections on a financial theory financial researchers often modify the theory by incorporating one type of market imperfections into the theory one by one and then derive a new modified formula the major problem with this approach is that when considering a type of market imperfections the new modified formula still ignores the effects of other types of market imperfections another problem is that the modified formula is often tedious following the concept of degree of market imperfection in hsu and wang 2004 this article aims to derive a more easy measurement of market imperfections between markets discuss some useful applications and provide one of empirical tests the degree of market imperfection between markets can be applied at least to the following areas 1 theoretical model building for pricing derivatives in imperfect markets 2 predicting the deviations of the actual derivative

interest groups trade liberalization and environmental standards in considering a country that imposes a minimum standard on an imported polluting good which generates negative consumption externalities we construct a common agency model in which a domestic environmental group and a foreign industrial lobby can influence the formation of the minimum standard by providing political contributions to the government this paper investigates the effects of trade liberalization on the political equilibrium environmental standard the pattern of trade environmental disutility and social welfare we find that trade liberalization tightens the minimum standard decreases imports of the polluting good and reduces environmental disutilities the importing country s social welfare however does not necessarily increase with trade liberalization the weaker the environmental group s lobbying efficiency or the stronger the foreign firm s lobbying efficiency the more likely it is that trade liberalization will enhance the importing country s welfare

common volatility in major stock index futures markets abstract the main objective of this paper is to investigate whether the us uk and japanese stock index futures markets have a similar volatility process for this purpose the common feature analysis proposed by engle and susmel 1993 is applied to 1988 1991 data after first removing price innovations using vector autoregression the results suggest that the three markets have a single common factor generating volatilities among markets