This paper investigates the price and output effects of the US Airways and American Airlines merger in markets in which actual or potential competition was eliminated. In markets in which actual competition was eliminated, the results are mixed. The merger is procompetitive (lower prices and higher output) in nonstop markets in which both endpoints are major hubs of merging airlines, but anticompetitive in connecting markets. Where potential competition was eliminated, the results are consistent with significant price increases and output reductions, particularly when the potential competitor was US Airways.
{"title":"An Ex Post Analysis of the US Airways/American Airlines Merger","authors":"Huubinh B. Le","doi":"10.15353/rea.v11i3.1689","DOIUrl":"https://doi.org/10.15353/rea.v11i3.1689","url":null,"abstract":"This paper investigates the price and output effects of the US Airways and American Airlines merger in markets in which actual or potential competition was eliminated. In markets in which actual competition was eliminated, the results are mixed. The merger is procompetitive (lower prices and higher output) in nonstop markets in which both endpoints are major hubs of merging airlines, but anticompetitive in connecting markets. Where potential competition was eliminated, the results are consistent with significant price increases and output reductions, particularly when the potential competitor was US Airways.","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2019-01-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49112790","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We analyze the effect of employer-sponsored health insurance premiums on employment and annual wages in the US using a county-level panel dataset for the period 2005-2010. Using variation in medical malpractice payments and variation in medical malpractice legislation over time and within states as the source of identifying variation in the health insurance premiums, we estimate the causal effects of rising health insurance premiums on employment and annual wages. We find that a 10% increase in premiums reduces employment by 1.1 percentage points, and leads to a statistically insignificant reduction of annual wages. Since US counties are characterized by a varying degree of private health insurance coverage, we also test whether the private health insurance coverage is a moderating variable for the relationship between the health insurance premiums and the labor market outcomes analyzed in this study. We find that rising premiums negatively affect the labor market conditions faced by US workers, especially in areas that are characterized by high private health insurance coverage.
{"title":"The Effects of Employer-Sponsored Health Insurance Premiums on Employment and Wages: Evidence from US Longitudinal Data.","authors":"Nicola Ciccarelli","doi":"10.15353/rea.v12i1.1697","DOIUrl":"https://doi.org/10.15353/rea.v12i1.1697","url":null,"abstract":"We analyze the effect of employer-sponsored health insurance premiums on employment and annual wages in the US using a county-level panel dataset for the period 2005-2010. Using variation in medical malpractice payments and variation in medical malpractice legislation over time and within states as the source of identifying variation in the health insurance premiums, we estimate the causal effects of rising health insurance premiums on employment and annual wages. We find that a 10% increase in premiums reduces employment by 1.1 percentage points, and leads to a statistically insignificant reduction of annual wages. Since US counties are characterized by a varying degree of private health insurance coverage, we also test whether the private health insurance coverage is a moderating variable for the relationship between the health insurance premiums and the labor market outcomes analyzed in this study. We find that rising premiums negatively affect the labor market conditions faced by US workers, especially in areas that are characterized by high private health insurance coverage.","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2019-01-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48754675","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A short presentation and description of the papers that have been selected from the 3rd International Conference in Applied Theory, Macroeconomics and Empirical Finance (AMEF) that took place in in the Department of Economics, University of Macedonia, Thessaloniki, Greece on the 21st and the 22nd of April 2017.
{"title":"Guest Editorial: 3rd International Conference in Applied Theory, Macro and Empirical Finance","authors":"Theodore Panagiotidis","doi":"10.15353/rea.v10i1.1505","DOIUrl":"https://doi.org/10.15353/rea.v10i1.1505","url":null,"abstract":"A short presentation and description of the papers that have been selected from the 3rd International Conference in Applied Theory, Macroeconomics and Empirical Finance (AMEF) that took place in in the Department of Economics, University of Macedonia, Thessaloniki, Greece on the 21st and the 22nd of April 2017.","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2018-03-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46124028","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper investigates the international competitiveness of the European ICT sector. We use Labour productivity, R&D expenses and trade performance as proxies of competitiveness. The empirical analysis of 39 countries between 1999 and 2004 confirms our main hypothesis that the EU is performing better in the ICT services industry relative to manufacturing. In general, the average EU production efficiency is larger in the services sector, than in manufacturing. The study has important policy implications. Appropriate policies should be implemented – especially in the ICT manufacturing sector – for making EU more competitive in “non- price factors”, such as policies that facilitate the transformation of R&D expenses into product innovation. There are clearly areas for improvement in the way R&D is carried out in the ICT sector within the EU, with respect to both the allocation of R&D investment and the process of producing results from R&D.
{"title":"The Competitiveness of the European ICT Industry","authors":"Dimitris Psychoyios, George Dotsis","doi":"10.15353/rea.v10i1.1510","DOIUrl":"https://doi.org/10.15353/rea.v10i1.1510","url":null,"abstract":"This paper investigates the international competitiveness of the European ICT sector. We use Labour productivity, R&D expenses and trade performance as proxies of competitiveness. The empirical analysis of 39 countries between 1999 and 2004 confirms our main hypothesis that the EU is performing better in the ICT services industry relative to manufacturing. In general, the average EU production efficiency is larger in the services sector, than in manufacturing. The study has important policy implications. Appropriate policies should be implemented – especially in the ICT manufacturing sector – for making EU more competitive in “non- price factors”, such as policies that facilitate the transformation of R&D expenses into product innovation. There are clearly areas for improvement in the way R&D is carried out in the ICT sector within the EU, with respect to both the allocation of R&D investment and the process of producing results from R&D.","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2018-02-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48898733","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Previous studies that included the exchange rate in the Korean demand for money assumed that the effects of the exchange rate changes are symmetric and adjustment process is linear. They found no significant effects. In this paper we apply Shin et al.’s (2014) Nonlinear ARDL approach to cointegration and error-correction modeling and test the symmetric versus asymmetric effects of exchange rate changes on the demand for money in Korea. Using quarterly data over the period 1973-2014, the results show that indeed the effects are asymmetric in the short run. In the long run, however, although the effects are symmetric but both won depreciation and won appreciation have significantly negative effects on the demand for money, supporting the wealth effects argument.
{"title":"Do Exchange Rate Changes have Symmetric or Asymmetric Effects on the Demand for Money in Korea?","authors":"Mohsen Bahmani‐Oskooee, Jungho Baek","doi":"10.15353/rea.v9i2.1439","DOIUrl":"https://doi.org/10.15353/rea.v9i2.1439","url":null,"abstract":"Previous studies that included the exchange rate in the Korean demand for money assumed that the effects of the exchange rate changes are symmetric and adjustment process is linear. They found no significant effects. In this paper we apply Shin et al.’s (2014) Nonlinear ARDL approach to cointegration and error-correction modeling and test the symmetric versus asymmetric effects of exchange rate changes on the demand for money in Korea. Using quarterly data over the period 1973-2014, the results show that indeed the effects are asymmetric in the short run. In the long run, however, although the effects are symmetric but both won depreciation and won appreciation have significantly negative effects on the demand for money, supporting the wealth effects argument.","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2017-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47752655","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper we implement a number of causality tests including linear models and nonlinear nonparametric Hiemstra-Jones and parametric Mackey–Glass to compare the causal relationship between global oil price changes and consumers’ cost of living among large net oil consuming and producing countries. Our findings indicate that despite the inconclusive relationships drawn from the extant literature, global oil price affects consumers’ cost of living mostly linearly across net oil consuming countries through the country-specific mechanisms. Such effects are reported to be nonlinear in net oil producing countries. Finally, possible nonlinear causations are asymmetric.
{"title":"Nonlinear Effects of Global Oil Price Changes on Consumers’ Cost of Living: A Comparative Study of Net Oil Consuming and Net Oil Producing Countries","authors":"M. Sotoudeh, A. Worthington","doi":"10.15353/rea.v9i1.1435","DOIUrl":"https://doi.org/10.15353/rea.v9i1.1435","url":null,"abstract":"In this paper we implement a number of causality tests including linear models and nonlinear nonparametric Hiemstra-Jones and parametric Mackey–Glass to compare the causal relationship between global oil price changes and consumers’ cost of living among large net oil consuming and producing countries. Our findings indicate that despite the inconclusive relationships drawn from the extant literature, global oil price affects consumers’ cost of living mostly linearly across net oil consuming countries through the country-specific mechanisms. Such effects are reported to be nonlinear in net oil producing countries. Finally, possible nonlinear causations are asymmetric.","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2017-04-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43278994","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Higher unemployment increases the cost of job loss and heightens employees’ feelings of job insecurity. The paper argues that these two effects could have a positive influence on employee organizational commitment. Using data from the Household, Income and Labor Dynamics in Australia (HILDA) microdata database, we find that employees in high unemployment regions are more committed to their organization, while the effect of unemployment on employee’s commitment is stronger in the private sector.
{"title":"Unemployment and Organizational Commitment: Evidence from a Panel of Australian Manufacturing Firms","authors":"N. Apergis","doi":"10.15353/rea.v8i2.1513","DOIUrl":"https://doi.org/10.15353/rea.v8i2.1513","url":null,"abstract":"Higher unemployment increases the cost of job loss and heightens employees’ feelings of job insecurity. The paper argues that these two effects could have a positive influence on employee organizational commitment. Using data from the Household, Income and Labor Dynamics in Australia (HILDA) microdata database, we find that employees in high unemployment regions are more committed to their organization, while the effect of unemployment on employee’s commitment is stronger in the private sector.","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2017-02-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42854707","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The paper examines the relationship between more than 30 macroeconomic variables and debt-to-GDP ratios for the household, non-financial corporation and aggregate debt in a panel of European Union countries. The GDP level and the ratio of house prices to income are found to be positively correlated with the debt-to-GDP ratio, whereas the real interest rate, the inflation rate, economic sentiment and the government debt level are negatively correlated with the debt-to-GDP ratio. Low interest rates and the house price-to-income ratio predict growth in the future debt-to-GDP ratio. Moreover, countries that have had a financial crisis have typically gone through a period of deleveraging afterwards.
{"title":"Explaining Private Debt","authors":"Lenno Uusküla","doi":"10.15353/rea.v8i2.1514","DOIUrl":"https://doi.org/10.15353/rea.v8i2.1514","url":null,"abstract":"The paper examines the relationship between more than 30 macroeconomic variables and debt-to-GDP ratios for the household, non-financial corporation and aggregate debt in a panel of European Union countries. The GDP level and the ratio of house prices to income are found to be positively correlated with the debt-to-GDP ratio, whereas the real interest rate, the inflation rate, economic sentiment and the government debt level are negatively correlated with the debt-to-GDP ratio. Low interest rates and the house price-to-income ratio predict growth in the future debt-to-GDP ratio. Moreover, countries that have had a financial crisis have typically gone through a period of deleveraging afterwards.","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2017-02-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43798391","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper we propose a new latent class/mixture model (LCM) to determine whether firms behave like profit maximizers or just cost minimizers when there is no additional sample separation information. Since some firms might be maximizing profit while others might minimize cost, the LCM with behavioral heterogeneity can be quite useful. Estimation of the LCM amounts to mixing a cost minimization and a profit maximization model. Using the U.S. airlines data we find that after deregulation about 15% of the airlines are found to be consistent with profit maximizing behavior.
{"title":"An Empirical Model of Behavioral Heterogeneity","authors":"S. Kumbhakar, M. Tsionas","doi":"10.15353/rea.v8i2.1512","DOIUrl":"https://doi.org/10.15353/rea.v8i2.1512","url":null,"abstract":"In this paper we propose a new latent class/mixture model (LCM) to determine whether firms behave like profit maximizers or just cost minimizers when there is no additional sample separation information. Since some firms might be maximizing profit while others might minimize cost, the LCM with behavioral heterogeneity can be quite useful. Estimation of the LCM amounts to mixing a cost minimization and a profit maximization model. Using the U.S. airlines data we find that after deregulation about 15% of the airlines are found to be consistent with profit maximizing behavior. ","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2017-02-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48985939","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article is the transcript of the plenary lecture that Michael Spence delivered at theRimini Conference in Economics and Finance 2014 (RCEF2014) of RCEA. It has beenmoderately edited so as to enable the transfer from the spoken word to the printed page.RCEA owes special thanks to Angelo Melino for organizing and chairing ProfessorSpence lecture.
{"title":"Has Growth and Convergence of Developing Economies Been Derailed?","authors":"A. Spence","doi":"10.15353/rea.v8i1.1429","DOIUrl":"https://doi.org/10.15353/rea.v8i1.1429","url":null,"abstract":"This article is the transcript of the plenary lecture that Michael Spence delivered at theRimini Conference in Economics and Finance 2014 (RCEF2014) of RCEA. It has beenmoderately edited so as to enable the transfer from the spoken word to the printed page.RCEA owes special thanks to Angelo Melino for organizing and chairing ProfessorSpence lecture.","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2016-04-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66906325","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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