An empirical investigation of the relationship between government revenue and expenditure : the case of the Fiji Islands

Purpose – Understanding the relationship between government revenue and government expenditure is important from a policy point of view, especially for a country like Fiji, which is suffering from persistent budget deficits. The aim of this paper is to investigate the relationship between government revenue and expenditure for Fiji.

Design/methodology/approach – The Johansen test for cointegration and Granger causality test are used to conduct the empirical analysis.

Findings – The key findings are that: government revenue and government expenditure in both the aggregate and disaggregate sense are cointegrated; in the short-run government expenditure Granger causes government revenue in an aggregate sense, departmental expenditure Granger causes aggregate revenue, and there is bidirectional causality running between government expenditure and customs duties; and in the long-run there is evidence of fiscal synchronization, implying that expenditure decisions are not made in isolation from revenue decisions.

Research limitations/implications – This fiscal synchronization has not been able curb the current account deficit in Fiji. Moreover, the confirmation of the spend-tax attitude of the government does not bode well for the level of investments and skilled human capital in Fiji as this may perpetuate tax increases in the future. Given that the Fiji Government is currently trying to rein in the escalating level of fiscal deficit, it is an opportune time for them to engage in extensive expenditure reforms.

Originality/value – The findings of this paper should allow policy makers to make informed decisions. Furthermore, the paper is different from others because apart from examining the revenue and expenditure in an aggregate sense, it also considers the different components of revenue and expenditure.

The effect of smokefree policies on electronic gaming machine expenditure in Victoria, Australia

Objective: To examine the impact of smoke-free policies in Victorian gambling venues on electronic gaming machine (EGM) expenditure.

Method: Monthly EGM expenditure from July 1998 to December 2005, provided by the Victorian Commission for Gambling Regulation and the Office of the Liquor and Gambling Commissioner in South Australia, was analysed. The outcome measure was the ratio of monthly expenditure for Victoria to monthly expenditure in South Australia. Intervention analysis and autoregressive integrated moving average modelling were used to assess the impact of the smoke-free policy on expenditure.

Results: The smoke-free policy resulted in an abrupt, long-term decrease in the level of EGM expenditure. The mean level of monthly expenditure decreased by approximately 14%.

Conclusion: The smoke-free policy not only protects hospitality workers and patrons from exposure to secondhand smoke but has also had an impact on slowing gambling losses.

The effect of smoke-free policies on electronic gaming machine expenditure in Victoria, Australia

Objective: To examine the impact of smoke-free policies in Victorian gambling venues on electronic gaming machine (EGM) expenditure.

Method: Monthly EGM expenditure from July 1998 to December 2005, provided by the Victorian Commission for Gambling Regulation and the Office of the Liquor and Gambling Commissioner in South Australia, was analysed. The outcome measure was the ratio of monthly expenditure for Victoria to monthly expenditure in South Australia. Intervention analysis and autoregressive integrated moving average modelling were used to assess the impact of the smoke-free policy on expenditure.

Results: The smoke-free policy resulted in an abrupt, long-term decrease in the level of EGM expenditure. The mean level of monthly expenditure decreased by approximately 14%.

Conclusion: The smoke-free policy not only protects hospitality workers and patrons from exposure to secondhand smoke but has also had an impact on slowing gambling losses.

A panel data analysis of the military expenditure-external debt nexus : evidence from six middle eastern countries

While a number of studies examine the nexus between military expenditure and economic growth, little consideration has been give to the effect of military expenditure on external debt. This article examines the impact of military expenditure and income on external debt for a panel of six Middle Eastern countries - Oman, Syria, Yemen, Bahrain, Iran, and Jordan - over the period 1988 to 2002. The Middle East represents an interesting study of the effect of military expenditure on external debt because it has one of the highest rates of arms imports in the world and it is one of the most indebted regions in the world. The study first establishes whether there is a long-run relationship between military expenditure, income, and external debt in the six countries using a panel unit root and panel cointegration framework and then proceeds to estimate the long-run and short-run effects of military expenditure and income on external debt. The study finds that external debt is elastic with respect to military expenditure in the long run and inelastic with respect to military expenditure in the short run. For the panel of six Middle Eastern countries, in the long run a 1% increase in military expenditure results in between a 1.1 % and 1.6% increase in external debt, while a 1% increase in income reduces external debt by between 0.6% and 0.8%, depending on the specific estimator employed. In the short run, a 1% increase in military expenditure increases external debt by 0.2%, while the effect of income on external debt is statistically insignificant.

Determinants of tourist expenditure in Fiji : a cointegration approach

Tourism is Fiji's largest industry in terms of foreign exchange earnings and employment creation. The industry earns around F$600 million per annum in foreign exchange, employs around 40,000 people, and tourist expenditure per capita is valued at around F$671. On the basis of this contribution, the industry is seen as a catalyst for economic development in Fiji; hence, it is imperative to understand the behavior of the industry. This article focuses on examining the determinants of tourist expenditure in Fiji. Using cointegration analysis and error correction models, the article finds that in the long run, real GDP in the country of origin impacts tourist spending in Fiji positively while prices and transport costs (airfares) have a negative effect. In the short run, coups d'êtat impact tourist expenditure negatively. It is envisaged that these results will help Fiji's policy makers and tourism industry stakeholders to understand the industry better.

The structure of tourist expenditure in Fiji : evidence from unit root structural break tests

The central aim of this paper is to investigate whether shocks to Fiji's tourism industry have a permanent effect or a transitory effect on tourist expenditure in Fiji. To accomplish this aim the Zivot and Andrews (1992) one break test and the Lumsdaine and Papell (1997) two break tests are used. The one break and two break tests reveal 1987 - the year of the military coups in Fiji - as the year of the break. Moreover, it is possible to reject the unit root null leading to the conclusion that shocks to Fiji's tourism industry have a transitory effect on tourist expenditure in Fiji.

The sustainability of Fiji's budget deficit : an econometric analysis

The sustainability of Fiji's budget deficit is examined here within the framework of inter-temporal budget constraint theory, where government revenue is modelled as a function of government expenditure. An error-correction mechanism test for cointegration finds that government revenue and expenditure are cointegrated, which provides some support for the position that Fiji's budget deficit is sustainable in the long run. It is argued that more government expenditure on capital investment will ensure a broader revenue base and reduce the risk of a budget deficit explosion.

Occupational therapists and the use of constraint-induced movement therapy in neurological practice

There is adaquate evidence for supporting the use of constraint-induced movement therapy (CIMT) in post-stroke rehabilitation. However, the actual usage of CIMT in routine occupational therapy practice appears limited. Further research is required to study why this might be so.

The contribution of upper limb and total body movement to adolescents’ energy expenditure whilst playing Nintendo Wii

Little research documents the contribution of upper limb and total body movement to energy expenditure (EE) during active video gaming. To address this, EE, heart rate (HR), and, upper limb and total body movement were assessed in 11- to 17-year-old adolescents whilst playing three active (Nintendo Wii) and one sedentary (XBOX 360) video games. Non-dominant upper limb activity, EE and HR were significantly greater during Wii Sports boxing [mean 267.2 (SD 115.8) J kg−1 min−1; 136.7 (24.5) beats min−1] than tennis or bowling (P ≤ 0.044). For all active games hip activity best predicted EE (R 2 ≥ 0.53), with two-measure models of HR and single-site activity data, and multi-site activity data, similarly explaining the variance in EE (R 2 ≥ 0.64). The physiological cost of upper-body orientated active video games increased when movement of both upper limbs was encouraged. Improvements in EE explanatory power provide support for multi-site activity monitoring during unique, non-ambulatory activities.

Energy expenditure in adolescents playing new generation computer games

Objective: To compare the energy expenditure of adolescents when playing sedentary and new generation active computer games.

Design: Cross sectional comparison of four computer games. Setting Research laboratories.

Participants: Six boys and five girls aged 13–15 years.

Procedure: Participants were fitted with a monitoring device validated to predict energy expenditure. They played four computer games for 15 minutes each. One of the games was sedentary (XBOX 360) and the other three were active (Wii Sports).

Main outcome measure: Predicted energy expenditure, compared using repeated measures analysis of variance.

Results: Mean (standard deviation) predicted energy expenditure when playing Wii Sports bowling (190.6 (22.2) kl/kg/min), tennis (202.5 (31.5) kl/kg/min), and boxing (198.1 (33.9) kl/kg/min) was significantly greater than when playing sedentary games (125.5 (13.7) kl/kg/min) (P<0.001). Predicted energy expenditure was at least 65.1 (95% confidence interval 47.3 to 82.9) kl/kg/min greater when playing active rather than sedentary games.

Conclusions: Playing new generation active computer games uses significantly more energy than playing sedentary computer games but not as much energy as playing the sport itself. The energy used when playing active Wii Sports games was not of high enough intensity to contribute towards the recommended daily amount of exercise in children.