A dynamic model of tourism, employment and welfare: the case of Hong Kong

The present paper uses a dynamic open-economy model with wage indexation to examine the impact of tourism on employment and welfare. Both short-run and long-run situations are analysed. It is well known that tourism converts non-traded goods into tradable goods. An increase in the demand for a non-traded good raises its relative price, which results in an expansion of the non-traded sector at the expense of the traded goods sector. This output shift raises labour employment in the short run. However, in the long run, the higher relative price leads to higher wages, resulting in a negative impact on labour employment. If the output effect is dominant, the expansion in tourism raises employment and welfare. However, under realistic conditions tourism may lower both labour employment and welfare due to rising costs. These results are demonstrated by simulating a dynamic model for the case of Hong Kong.

The relationship between labour market conditions and welfare receipt in Australia: A stock-flow analysis

Understanding the determinants of changes in welfare caseloads is an important, but little studied, topic in Australia. This paper evaluates the role of labour market conditions in explaining the changes in the Australian welfare caseload since the late 1990s. The paper employs a stock-flow approach to better control for persistence in welfare receipt and includes different specifications to deal with measurement error in labour market data. The results suggest that the labour market is an important determinant of movements on and off welfare, accounting for the majority of the caseload decline during 1997-2005. The results also highlight the importance of robustness checks when data are measured with error.

Indices for cashmere fleece competition and across farm comparisons: The role of staple length in identifying goats of higher cashmere production

A single focus on mean fibre diameter (MFD, μm) as the definition of cashmere quality overlooks the effects of fibre length, softness and fibre curvature on cashmere processing, textile quality and consumer acceptance. Many farmers overlook the importance of cashmere staple length (SL, cm) in their fleece assessments. We aimed to determine the importance of SL in comparison with MFD when evaluating cashmere production and to identify how across farm comparisons of cashmere fleeces can be objectively undertaken. A sample of 1244 commercial cashmere fleeces from goats originating from many Australian farms was used. Least squares models, relating the logarithm of clean cashmere production (CCMwt, g) to MFD and SL, were fitted. Six years of data from the Australian cashmere industry between farm fleece competitions were analysed to determine the relation between CCMwt and MFD. In the research flocks, adjusting CCMwt of individual goats across farms for MFD only accounted for 2% of the variance, whereas SL accounted for 39% of the variance. The least squares additive model involving only SL was: log10(CCMwt)=1.570+0.06010×SL. Thus CCMwt was proportional to: 100.06010×SL=1.1484SL. It was appropriate to adjust CCMwt for SL by a factor 1/1.1484(SL-SL0) where SL0 is a standard SL of 7.5cm. The between farm index for cashmere weight equals: cleancashmerestaplelengthindex=2.823×CCMwt/1.1484SL. For industry fleece competitions, regression analysis indicated that there was no association between cashmere production and MFD (P=0.81), similar to the research data. Adjusting CCMwt for MFD in across farm comparison and fleece competitions appears to be ineffective. For farm comparisons and in fleece competitions it is important to assess cashmere SL. The use of the Clean Cashmere Staple Length Index will provide a more robust comparison of cashmere productivity between farms as it is an indirect indicator of desirable skin secondary follicle development. The results have application in development projects where obtaining a cashmere MFD test is costly or unavailable. © 2013 Elsevier B.V.

Standardised packaging and new enlarged graphic health warnings for tobacco products in Australia--legislative requirements and implementation of the Tobacco Plain Packaging Act 2011 and the Competition and Consumer (Tobacco) Information Standard, 2011

This paper describes the development, content and implementation of two pieces of Australian tobacco control legislation: one to standardise the packaging of tobacco products and the other to introduce new, enlarged graphic health warnings. It describes the process of legislative drafting, public consultation and parliamentary consideration. It summarises exactly how tobacco products have been required to look since late 2012. Finally, it describes implementation, most particularly, the extent to which packs compliant with the legislation became available to consumers over time.

Political competition and environmental reporting: evidence from New Zealand local governments

Purpose - The purpose of this paper is to investigate the relationship between "political competition" and "environmental reporting" by New Zealand local governments. Design/methodology/approach - The research method includes a longitudinal analysis of environmental reporting by New Zealand local governments in their annual reports for the financial years 2005-2006 to 2009-2010. "Content analysis" was used to attach scores to the extent of environmental reporting. The "number of candidates divided by the number of available positions at the previous election" was used as the proxy for "political competition". Findings - The study reports a positive relationship between "political competition" and "environmental reporting" in 2007-2008. The number of local governments reporting voluntary environmental information increased in 2006-2007 and 2007-2008 compared to 2005-2006, followed by a reduction in such numbers following the 2007-2008 financial year. This trend in disclosure can be attributed to the local government elections in October 2007. This finding is consistent with the expectation of "agency theory" and provides insight into the pattern of perceived agency costs. The study also finds a dearth in reporting "monetary" and "bad" news. Originality/value - The study contributes towards the previous literature on environmental reporting by concentrating on the public sector and New Zealand, together with investigating the relationship of such reporting with "political competition" through a longitudinal analysis. The theoretical contribution of this study is the adoption of "agency theory" in the context of public sector voluntary reporting and investigating the significance attached by agents to environmental reporting to minimise agency cost. The practical contribution of the study is in the area of future development of reporting standards in regards to environmental reporting.

Tourism, Dutch disease and welfare in an open dynamic economy

This chapter examines the effects of an expansion in tourism on capital accumulation, sectoral output and resident welfare in an open economy with an externality in the traded good sector. An expansion of tourism increases the relative price of the non traded good, improves the tertiary terms-of-trade and hence yields a gain in revenue. However, this increase in the relative price of non traded goods results in a lowering of the demand for capital used in the traded sector. The subsequent de-industrialization in the traded good sector may lower resident welfare. This result is supported by numerical simulations. © 2011 Nova Science Publishers, Inc.

Wage inequality and welfare in developing countries: privatization and reforms in the short and long run

The impacts of privatization on wage inequality and welfare are considered for developing countries. In the short run, privatization can narrow wage inequality but reduce output of public firms. However, the favorable effect of privatization on lowering wage inequality vanishes in the long run due to the excessive entry of public firms. Thus, a policy recommendation for privatization would be: to avoid rising wage inequality, entry regulation of public firms should be imposed in the short run, and to mitigate the output contraction, complementary structural changes or policy reforms are needed in the transitional period of privatization.

Informality in labor market and welfare

The neoclassical growth model with two sectors in production is employed in this paper in order to investigate how a change in the tax structure affects informality and welfare. We calibrate and simulate the model and find that welfare always increases when we reduce the tax rate on the demand for labor and adjust the tax rate on the value added so that the government revenue remains constant.

Investment in human capital in a macrodynamic framework: redistributive taxation, public debt and welfare

None

Infrastructure privatization in a neoclassical economy : macroeconomic impact and welfare computation

In this paper a competitive general equilibrium model is used to investigate the welfare and long run allocation impacts of privatization. There are two types of capital in this model economy, one private and the other initially public ("infrastructure"), and a positive externality due to the latter is assumed. A benevolent government can improve upon decentralized allocation internalizing the externality, but it introduces distortions in the economy through the finance of its investments. It is shown that even making the best case for public action - maximization of individuals' welfare, no• operation inefficiency and free supply to society of infrastructure services - privatization is welfare improving for a large set of economies. Hence, arguments against privatization based solely on under-investment are incorrect, as this maybe the optimal action when the financing of public investment are considered. When operation inefficiency is introduced in the public sector, gains from privatization are much higher and positive for most reasonable combinations of parameters .

A note on an application of Arrow's theorem: sufficient conditions for Lucas' inflation and welfare

Bellman's methods for dynamic optimization constitute the present mainstream in economics. However, some results associated with optimal controI can be particularly usefuI in certain problems. The purpose of this note is presenting such an example. The value function derived in Lucas' (2000) shopping-time economy in Infiation and Welfare need not be concave, leading this author to develop numerical analyses to determine if consumer utility is in fact maximized along the balanced path constructed from the first order conditions. We use Arrow's generalization of Mangasarian's results in optimal control theory and develop sufficient conditions for the problem. The analytical conclusions and the previous numerical results are compatible .

Public expenditures taxation and welfare measurement

this article addresses the welfare and macroeconomics effects of fiscal policy in a frarnework where govemment chooses tax rates and the distribution of revenues between consumption and investment. We construct and simulate a model where public consumption affects individuaIs' utility and public capital is an argument of the production function. The simulations suggest that by simply reallocating expenditures from consumption to investment, the govemment can increase the equilibrium leveIs of capital stock, hours worked, output and labor productivity. Funhennore, we 'show that the magnitude and direction of the long run impact of fiscal policy depends on the size of the elasticity of output to public capital. If this parameter is high enough, it may be the case that capital stock, within limits, increases with tax rates.

Two additions to Lucas's "inflation and welfare"

This work adds to Lucas (2000) by providing analytical solutions to two problems that are solved only numerically by the author. The first part uses a theorem in control theory (Arrow' s sufficiency theorem) to provide sufficiency conditions to characterize the optimum in a shopping-time problem where the value function need not be concave. In the original paper the optimality of the first-order condition is characterized only by means of a numerical analysis. The second part of the paper provides a closed-form solution to the general-equilibrium expression of the welfare costs of inflation when the money demand is double logarithmic. This closed-form solution allows for the precise calculation of the difference between the general-equilibrium and Bailey's partial-equilibrium estimates of the welfare losses due to inflation. Again, in Lucas's original paper, the solution to the general-equilibrium-case underlying nonlinear differential equation is done only numerically, and the posterior assertion that the general-equilibrium welfare figures cannot be distinguished from those derived using Bailey's formula rely only on numerical simulations as well.

Essays on competition and returns of inside money

In an early paper, Cavalcanti and Wallace (2001) showed, using a computable version of Cavalcanti-Wallace model (CW-1999), that optimal regulation induces banks to pay interests, instead of contracting the money supply in an inside money allocation. Here, we generalize CW in two fashions, assuming inside money allocations, so that banks are supposed to issue money as they find a potential producer wishing to produce. The first generalization allows for seasonality due to real shocks on preferences with persistence and for monetary policy improvement. We found an asymmetric path for interest rates when constraints matter, even when shocks are independent. The second generalization allows for bank competition, in the sense that banks can choose between two different banking nets. We proof the existence of simple stable and unstable equilibria and also verify the existence of multiple equilibria.

Electoral rules, political competition and fiscal spending: regression discontinuity evidence from brazilian municipalities

We exploit a discontinuity in Brazilian municipal election rules to investigate whether political competition has a causal impact on policy choices. In municipalities with less than 200,000 voters mayors are elected with a plurality of the vote. In municipalities with more than 200,000 voters a run-off election takes place among the top two candidates if neither achieves a majority of the votes. At a first stage, we show that the possibility of runoff increases political competition. At a second stage, we use the discontinuity as a source of exogenous variation to infer causality from political competition to fiscal policy. Our second stage results suggest that political competition induces more investment and less current spending, particularly personnel expenses. Furthermore, the impact of political competition is larger when incumbents can run for reelection, suggesting incentives matter insofar as incumbents can themselves remain in office.