Please select from the titles below:
- Excise Taxation and Product Quality: The Gasoline Market
- Do fat tails matter in GARCH estimation: testing market efficiency in two transition economies
- Determinants of Credit Risk in Indian State-owned Banks: An Empirical Investigation
- Using Cooper’s Approach to Explore the Extent of Congestion in the New British Universities
- Expanding Product Variety and Human Capital Formation in an Ageing Economy
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Excise Taxation and Product Quality: The Gasoline Market (p.1)
by T NesbitFollowing Barzel (1976), product quality increases in response to unit taxation but remains unchanged by ad valorem taxation. While many tax theorists agree this argument is theoretically sound, empirical support of Barzel's theory is limited to the cigarette market. This paper tests and confirms his theory in the gasoline market, a market in which Barzel failed to find supporting evidence in his original article. Using a direct test and improved data, the estimates suggest that the market share of premium-grade gasoline increases in response to both unit taxation and ad valorem taxation.
Do fat tails matter in GARCH estimation: testing market efficiency in two transition economies (p.15)
by B Harrison and D Paton
The use of the GARCH-class of models is commonplace when examining stock market returns. In this paper we use data on stock markets in two transition economies, the Czech Republic and Romania, to demonstrate the importance of using the correct GARCH specification. When residuals are characterised by ‘fat tails’ or kurtosis, the use of a GARCH-t specification is appropriate. Diagnostic tests suggest that the GARCH-t specification is appropriate for modelling stock market returns in Romania, whilst the standard GARCH specification is adequate for the Czech Republic. Using a standard GARCH specification leads to rejection of the null hypothesis of market efficiency in Romania, whereas this null hypothesis cannot be rejected using the GARCH-t specification. The null hypothesis of efficiency cannot be rejected in the Czech Republic using either specification. Thus, we find that the presence of ‘fat tails’ can have important implications for inference in the analysis of stock market returns.
Determinants of Credit Risk in Indian State-owned Banks: An Empirical Investigation (p.27) by M Bahmani-Oskooee and Y Wang
The determinants of the credit risk of banks in emerging economies have received limited attention in the literature. Using advanced panel data techniques, the paper seeks to examine the factors affecting problem loans of Indian state-owned banks for the period 1994-2005, taking into account both macroeconomic and microeconomic variables. The findings reveal that at the macro level, GDP growth and at the bank level, real loan growth and bank size play an important role in influencing problem loans. The study performs certain robustness tests of the results and discusses several policy implications of the analysis.
Using Cooper’s Approach to Explore the Extent of Congestion in the New British Universities (p.47)
by A T Flegg and D O AllenThis paper uses data envelopment analysis (DEA) to explore the issue of congestion in British universities. The focus is on 41 former polytechnics that became universities in 1992, and the analysis covers the period 1995/6 to 2003/4. These new universities differ from the older universities in many ways, especially in terms of their far higher student:staff ratios and much lower research funding per member of staff. The primary aim is to examine whether this under-resourcing of the new universities has led to ‘congestion’, in the sense that their output has been decreased as a result of having too many students. This phenomenon is measured using the method proposed by Cooper et al. in a series of articles. To check the sensitivity of the results to different specifications, three alternative DEA models are formulated. The results reveal that a substantial amount of congestion was present throughout the period under review, and in a wide range of universities. An overabundance of undergraduate students is identified as the largest single cause of congestion in the former polytechnics. Less plausibly, the results also suggest that academic overstaffing was a major cause of congestion. By contrast, postgraduates and ‘other expenditure’ are found to play a noticeably smaller role in generating congestion.
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Expanding Product Variety and Human Capital Formation in an Ageing Economy (p.83)
by H NodaPopulation ageing is a significant demographic phenomenon facing many countries. The present paper aims to ascertain the relationship between population ageing and macroeconomic performance, within the framework of an economic growth model endogenously incorporating innovation and human capital. Consequently, the present model implies that the rate of innovation and the ratio of skilled to unskilled workers would decline over the long run as populations aged further, because of increases in life expectancy. The present model also suggests that, in general, the effect of changes in the retirement age on the rate of innovation and the ratio of skilled to unskilled workers is inconclusive.
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