Average Price Level Research Articles

Information and entropy in the labor market: Frictional and involuntary unemployment and the neutrality of money

AbstractWe re‐examine the concept of involuntary and frictional unemployment and the neutrality of money in a statistical equilibrium model of the labor market in which boundedly rational workers' and employers' interactions have a non‐zero impact on wages. From this perspective both the degree of involuntary unemployment and the neutrality of money depend on the adjustment of both expectations of the average level of wages and prices and the further adjustment of anticipations of the scale of fluctuations in prices and wage offers. Shocks to the economy can produce new long‐run equilibrium levels of unemployment and short‐run increases in involuntary unemployment arising from unevenness in the adjustment of expectations.

Factors Determining the Average Price Level: A Combined Microeconomic and Macroeconomic Approach

We analyze various determinants of the average price level using a strictly mathematical approach. Starting with the microeconomic perspective, we review the effect of demand shifters such as consumer income and the level of advertising on the average price level in a simple partial market equilibrium model. Then, we discuss the effect of supply shifters such as the exogenous tax level, worker wage, rental rate, and technology. We use implicit differentiation and Jacobian determinants. While government spending triggers inflation, taxes have the opposite effect. This is consistent with Keynesian theory. Money supply increases national income and prices while reducing the equilibrium interest rate. Therefore, money supply has pro-inflationary effects. The effect of money demand is the opposite—it increases the equilibrium interest rate, thereby lowering national income and prices. Augmenting the model to the level of international trade, we find that exports raise national income, the interest rate, and the average price level, while the effect of imports is just the opposite. Government spending raises the exchange rate while continuous inflation lowers it.

Freebie Seekers or Desperate Buyers? An Analysis of Willingness to Pay for COVID-19 Vaccine in Türkiye

ABSTRACT The aim of the study is to determine the level of price that individuals living in Türkiye are willing to pay (WTP) for a hypothetical COVID-19 vaccine. In addition, the study also aims to identify the socioeconomic factors affecting that level of WTP. The data is collected via a virtually applied questionnaire. Probit estimations are employed to determine the level of price that is willing to be paid. Further, the socioeconomic factors affecting the revealed WTP level are identified with an ordered-probit estimation strategy. The average price level that the participants are willing to pay for two doses of a hypothetical COVID-19 vaccine which immunes for 12 months is ₺316.93 ($42.66). Higher education groups, public employees, married people, and urban individuals are more likely to pay at higher price levels of hypothetical COVID-19 vaccine. Interestingly, the individuals living with a pregnant woman or a baby, the ones who experienced severe COVID-19 disease and the ones who already decided to be vaccinated are more likely to pay at relatively low-price levels. This study may contribute to broader literature as it will provide evidence from Türkiye for international comparisons.

Direct and spillover effects of short‐ and long‐term land pricing drivers: Evidence from Italian districts, 1992−2019

AbstractThe global economic and food crisis has increased the demand for land and rekindled the interest in farmland market investments worldwide. This study explores the Italian farmland market, investigating its main influencing factors from 1992 to 2019 using a spatial econometric framework. Traditional land characteristics and location‐specific agricultural factors, as well as non‐agricultural factors, are assessed. The average level of farmland prices and their growth are analyzed by modeling the potential types of spatial interactions, and the results are corroborated by considering different configurations of spatial weight matrices. The results show that farmland markets are influenced by land's current net returns as well as by its potential alternative uses. Therefore, factors considered external to the agricultural dimension, such as population pressure, climate change, and speculative expectations, increasingly shape farmland prices.

Anchoring Effect and Influence of Knowledge on Consumers Willingness to Pay for Organic Food Online: An Online Experiment on Chinese Consumers of Organic Food

This study investigates how the anchoring effect affects peoples willingness to pay for organic food in an online purchasing environment.The aim of this study is to find out whether anchoring has an impact and how it affects peoples value perception of online organic food and, thus, their trust in and willingness to pay for organic food. Moreover, this study also aims to find out how knowledge of external reference prices of the same type of organic food provided by other online sellers moderates peoples willingness to pay when given a price anchor. This study uses an online survey to perform the experiment and uses quantitative analysis methods to validate the results. The study finds that anchoring does have an impact on peoples willingness to pay for organic food online, even when people face an exaggerated price provided by the online seller. Moreover, knowledge of external prices moderates peoples willingness to pay. People tend to adjust their willingness to pay towards the average level of external prices.

Macroeconomic Determinants of Income Inequality in Sri Lanka

Even though several different income redistribution plans have been put in place by succeeding governments, income disparity has persisted in Sri Lanka over the past 50 years. Using secondary data from 1978 to 2021, this study aims to pinpoint the macroeconomic factors that contribute to income inequality in Sri Lanka. The basic estimating method is the autoregressive distributed lag model (ARDL), a rarely used analytical tool in Sri Lanka. The results show that the primary macroeconomic predictors of income inequality in Sri Lanka among the selected variables are government spending, trade openness, average prices, the share of agriculture in the GDP, and per capita GDP. Additionally, the findings demonstrate that trade openness and government spending cause income inequality, supporting Barro's theory. Additionally, the average price level and the percentage of agriculture in the GDP have helped to lessen income disparity in the nation. Per capita GDP also shows a marginal significance, supporting Kuznets’ view, which stresses that increasing a country’s GDP increases inequality. However, financial deepening and secondary school enrolment ratios do not show significant impacts emphasizing that financial and education factors do not contribute to inequality in the Sri Lankan setting. The study suggested that policy priority should be given to developing the agricultural sector and catching the spillover effect of international trade to reduce income inequality. That would ultimately lead to lowering trade-induced inequality. Furthermore, a crucial policy choice to lower the expense of daily life for the poor is to maintain a constant overall price level. Government transfer programs should primarily target the poor and maintain a proper monitoring mechanism to capture the outcome of those transfers also important. Currently, such a follow-up system is not in place; therefore, the government’s targets of reducing inequality couldn’t be realized to the fullest.

COVID-19 mobility restrictions and stay-at-home behaviour in 2020 were associated with higher retail food prices worldwide

COVID-19 policy responses have included mobility restrictions, and many people have chosen to stay at home to avoid exposure. These actions have ambiguous impacts on food prices, lowering demand for food away from home and perishables, while increasing supply costs for items where workers are most affected by the pandemic. We use evidence from 160 countries to identify the net direction and magnitude of association between countries' real cost of all food and mobility restriction stringency. We investigate the deviation of each month's price level in 2020 from that month's average price level during the previous three years and find that an increase in mobility restriction stringency from no restrictions to most restrictive is associated with an increase in the real cost of all food of more than one percentage point across all models. We then examine the relationship between retail food price levels by food group and stay-at-home behaviour around markets in 36 countries and find positive associations for non-perishables, dairy and eggs.

Assortments and prices in online grocery retailing

Grocery retailing is undergoing rapid changes. New store formats and market channels, the entry of additional large players, and increasing multichannel activities on the supply side are accompanied by heterogeneous and changing consumer preferences. Retailers are increasingly competing in both price and variety. The question arises: how do product assortments affect retailers' prices? Larger assortments may be attractive for consumers who derive utility from variety or search for niche products. Retailers with a deeper assortment might be in a position to realize higher prices. Our study is the first to quantify the assortment-depth elasticity of price in online retailing, and the magnitude of assortment depth at which a further expansion of the assortment may no longer allow for a higher average price level. We collect a unique dataset for major online full-assortment grocery retailers in Germany and show that an increasing depth of grocery assortment raises online prices. The depth elasticity of price is below unity, and the influence is nonlinear.

Analysis of the enterprise's external environment as the main stage of strategy development

Introduction. The external environment is a source that feeds the organization with the resources necessary to maintain its internal potential at the appropriate level. The organization is in a state of constant exchange with the external environment, thereby ensuring the possibility of survival. But the resources of the environment are unlimited. And many other organizations in the same environment claim them. Therefore, there is always a possibility that the organization will be able to obtain the necessary resources from the external environment. This can weaken its potential and lead to many negative consequences for the organization. The task of strategic management is to ensure such interaction of the organization with the environment, which allowed it to maintain its potential at the level necessary to achieve its goals and thus would give it the opportunity to survive in the long term. Method. The article considers two methods of analyzing the external environment of the enterprise: SWOT analysis, which divides factors into strengths and weaknesses, opportunities and threats, and PEST analysis, which monitors and evaluates political (stability of the political situation, tax policy, level of state influence on the industry , control over quality standards), economic (inflation rate, population income level, production volumes of natural and mineral bottled water, prices for raw materials and energy sources, investments in the industry), social (requirements for product quality, tastes and preferences of the population, population size) and technological factors (technology development in the industry, scientific and technical potential of the country, research and development costs) over which the company has no influence. Results. The study was carried out on the example of Tsarychansky Zavod Minvody LLC. In the process of analyzing the enterprise, the external environment was studied based on six groups of factors: economic, political, market, technological, international status and social behavior. The company's strengths have been identified, which are also competitive advantages: safe product packaging; growth in office consumption of bottled water; a wide range of mineral water; high quality of the product; average price level; use of advanced release automation technologies; Increasing the volume of water sales; increasing the product line; water comes from a well; water has important elements for the human body; water is used for medicinal purposes; the plant produces treated water using the reverse osmosis method; the enterprise is the owner of the main resources for production; wide target audience; delivery of water to offices; the presence of a branded store near enterprises.

Farmers’ Preferences for Fertilizers derived from Domestic Sewage and Kitchen Waste – A Discrete Choice Experiment in Germany

In view of increasing energy and resource scarcities, nutrient recycling from domestic wastewater is a promising way to obtain mineral fertilizers. Given the lacking evidence about the acceptance of recycling fertilizers by the farming sector, we elicited farmer preferences and willingness to pay (WTP) for selected attributes of mineral fertilizers made from domestic sewage and kitchen waste. We conducted a Discrete Choice Experiment with 206 German farmers and fitted a Random Parameter Logit (RPL) model. As-suming an average market price level of around 300 euros per tonne of N-P-K fertilizer, the choice exper-iment revealed that farmers not engaged in non-food production such as forage cultivation or renewable energies activities and without farmer-to-consumer direct marketing would accept a recycling fertilizer only together with a financial compensation via price discount of approximately 10%. The average WTP drops considerably if a fertilizer’s heavy metal contents are relatively high and if the absence of drug residues cannot be guaranteed, whereas a customizable nutrient composition and a constant supply availability would have a sales promoting effect. Farmers’ characteristics can only partly explain the notable heterogeneity of the WTP for the considered fertilizer attributes. Even though the WTP for a recycling fertilizer is on average less than that for a conventional mineral fertilizer, the estimated WTP standard deviations suggest that not all farmers expect a financial compensation via price discount when purchasing recycling fertilizers.

Foreign Trade and Macroeconomic Effects of Exports

We find that the IS-LM model and the national income model reinforce each other in the context of exports and the export multiplier. Using simple differentiation techniques, we derive several relationships with respect to foreign trade. As predicted by Keynes, exports have a favorable effect on national income and the interest rate. Exports also increase the average price level and the exchange rate in the country. Through the mechanism of the export multiplier exports increase imports, savings, and consumption. A higher propensity to import reduces national income and fosters a negative trade balance. Similar is the effect of a higher exchange rate which discourages exports and encourages imports.

Aging Population, Inflation and Economic Growth

With the acceleration of China's aging process, economic growth is affected by population aging to a certain extent, which is universal and special to the world, as China is not only the largest developing country in the world, but also the country with the largest aging population in the world. The impact of aging population structure on economic growth cannot be ignored. Among all economic problems, inflation has always been the most prominent one. Inflation rate measures the overall price level of a country. The average price level of an economy not only measures the monetary purchasing power of its residents, but also is a necessary condition for the smooth operation of the economy. Hence, too high or too low price level will restrict economic growth. Starting from the impact of aging structure on economic growth and inflation rate, this thesis discusses the relationship between aging population structure and economic growth, inflation as well.

Assessing the authenticity of national carbon prices: A comparison of 31 countries

Many countries have carbon pricing in place, in the form of a tax and/or market. Generally, this involves low price rates, incomplete emissions coverage, and price reductions for particular sectors. This raises the question whether the label “carbon price” – in the environmental-economics textbook sense – really applies. To answer it, we assess the authenticity of 31 national carbon prices, calculating average carbon prices and their gap with advertised prices, at both national and sector levels. The results indicate a poor level of authenticity. This means that the carbon prices published by sources such as the World Bank provide a misleading representation of the actual national policy pressure on emissions. Countries show considerable differences regarding the average carbon price level and the gap with advertised prices. Moreover, there is not a one-to-one relationship between advertised and average carbon prices, suggesting the former are not a good basis for international comparison of policy effectiveness. Across countries, the mean carbon price equals €7.90/ton of CO2 while the mean price gap is 57.7%. Most noticeably, the highest advertised price for Sweden should be interpreted with care as it goes along with a price gap of almost €100 to the average price. In addition, Switzerland and Finland show relatively high price gaps. To illustrate the relevance and non-triviality of our indicators, note that Sweden occupies a 3rd position in terms of average carbon price (after Norway and Switzerland), 27th in terms of price gap, and 16th in terms of effective rate (i.e. sum of implicit and explicit carbon prices). We further find that implicit carbon prices dominate explicit ones for most countries, notably in road transport, whereas the reverse holds for industrial and electricity sectors. Combining our findings with recent empirical evidence for carbon-pricing effectiveness highlights the potential of the instrument to combat climate change, provided implementation is improved and internationally harmonized. Shifting the attention from advertised to average carbon prices might help in this regard.

Особенности и направления оценки недвижимости для целей государственной экономической политики в условиях цифровизации

The article deals with topical issues of digital cadastral accounting, calculating the value of a real estate object in the context of the dynamics of market indicators. The statistics of the distribution of Russian cities by the indicator of the average level of real estate prices in the context of market types in 2020 are reflected. An approach to the formation of reports on the results of real estate valuation is proposed.

Residual variance and asset pricing in the art market

AbstractIn this paper, we compute residual variance of art prices to examine asset pricing in contemporary art market. Our empirical work shows a few interesting results. First, we discover that the residual variance is significantly and positively related to the average price level achieved by an artist. Second, the residual variance has additional explanatory power in terms of how often the artist’s works are cited and exhibited, even after we control for artist fixed (reputation) effects. Third, collectors tend to value more those artworks with higher residual variance. Artworks by those artists with high residual variance tend to outperform the market within and out of sample. One possible explanation of our results is that residual variance could be a proxy for creative risk taking by contemporary artists. The most creative artists dare to take more risks, which results in higher residual price volatility of their artworks.

Internet Retailing and Pricing Decisions: An Examination in the Italian Gambling Market

The rapid growth of e-commerce over the last few years has sparked a stream of research that analyzed the impact of Internet retailing on market prices. It has been theorized that the low entry and transaction costs associated with electronic commerce should lead to a reduction in prices, especially for homogeneous products. Some scholars have verified, through empirical research, whether the prices of specific products and services sold through the electronic distribution channel are, as hypothesized, lower than those practiced in brick and mortar stores. The results of this research, even if they mostly confirm the greater price efficiency of e-commerce compared to the physical sales network, are however not univocal. This paper intends to offer an original contribution in this field of study, examining a particular industry that in recent years has been affected by an exponential increase in online sales, that of gambling. The aim of this work is to analyze whether in the Italian sports betting market, in line with theoretical hypotheses, online prices are lower than offline prices and whether the development of Internet sales has been accompanied by greater market efficiency and, therefore, a generalized reduction in prices. From a methodological point of view, the study was developed by collecting and processing the official market data of the regulated sports betting sector in Italy provided by the Agency of Customs and Monopoly, for the years ranging from 2011 to 2019, thus carrying out a longitudinal analysis on price levels and related changes over time. The results of the analysis have shown that in the period analyzed in the Italian regulated sports betting market the average prices paid for the betting products offered by the gambling websites remained lower, in a range going from 38 to 48 percent, as compared to those practiced by betting shops. It also emerged that there was a general reduction in the average price levels of betting products equal to almost 50 percent. These results have interesting managerial implications for gambling operators and provide some indications for state institutions that are responsible for gambling policy and legislative changes.

Monetary policy strategies for the European Central Bank

We develop a behavioral DSGE model which addresses the forward guidance puzzle. We then use the estimated model to assess if unconventional monetary policy tools such as negative interest rates, forward guidance, and asset purchases can provide efficient macroeconomic stabilization in a low nominal and real interest rate environment. While these tools boost output and inflation, the rebound from deep recession can still be painfully slow. Makeup strategies, including average inflation and price level targeting, can further support recovery and reduce downside risks, though the benefits are quite modest under behavioral expectations.

The Effect of Covid-19 on Unemployment and Price Changes in Ethiopia: Evidence from Woldia Town “Does The Downward Sloping Philips Curve Hold True at Micro Level”

The massive spread of corona creates pressure on the general systems of the world countries. As stated in some studies corona virus affect every institution and individuals of the world in many aspects. Specifically it results in high unemployment, low level of production and significance rise in the nominal price of commodities. This study tries to explain the change in those economic variables to analyze the effect of Covid-19 on the living standard of households in Woldia town, Amhara regional state of Ethiopia using a data obtained from the north wollo zone planning commission which had been collected from sampled individuals monthly. Since the issue is so recent and absence of many conducted researches on this area, this article have no specific chapter for review of literature and gives more focus for data analysis part. Then descriptive analysis indicates the presence of valuable rise in unemployment and average price levels simultaneously and the OLS regression result disproved the applicability of Philips curve for the study area under the influence of COVID-19. Keywords: COVID-19, Philips curve, Regression analysis, Unemployment, Woldia Town, Ethiopia DOI: 10.7176/RJFA/12-15-01 Publication date: August 31 st 2021

Benchmarking the Performing Arts: a Price Level Index for Publicly Funded German Music Theatres

There is a constantly growing gap between rising fixed costs and stagnating revenues in German publicly funded music theatres (PGMTs). The structural crisis can be assumed to be even worse after a restart of the performing arts following the COVID-19 pandemic. The potential of pricing policy, which has been fundamentally verified in literature, is not systematically exploited in PGMTs. The data situation in Ger-many regarding theatres in general is quite comprehensive and not comparable to the rest of the world. But one important key figure is missing for implementing a more revenue-oriented price policy: the av-erage price level of PGMTs. Although there already exist quite comprehensive studies by Schößler (2016) on pricing in publicly funded German theatres (PGTs) and by Ozeghov and Ozhegova (2018) on price discrimination, there is no assessment of the general price structure for PGMTs. The goal of this study is to fill this gap in research, giving an average price level for PGMTs as well as introducing a PGMT index as a basis for a more differentiated price policy and benchmarking.

Substantiation of methodological approaches to the development of the investment and construction complex of the Chechen Republic based on the principles of «green» growth

The article presents a study on the problems of restoring the construction complex of the Chechen Republic, in particular, reducing the attention of investors to the use of "green" technologies. In the course of the study, the authors, based on the use of such methods as a systematic approach, logical analysis, comparative analysis and other methods, proposed a number of methodological approaches that should be used in justifying the development strategy of the investment and construction complex of the Chechen Republic. It is established that in the investment and construction complex of the Chechen Republic, it is necessary to search for such methodological approaches in its development that would minimize the harmful effects of electromagnetic radiation. It is concluded that with the development of information technologies, the life of people, primarily those living in megacities, becomes more comfortable. They become more informed about the methods of a healthy lifestyle, including the use of environmentally friendly products in their life. It is proved that in the coming period, taking into account the high rates of natural population growth in the territory of the Chechen Republic, it will be necessary to ensure high rates of housing commissioning. In order to determine the degree of affordability of housing for the population of the Chechen Republic to establish a system of monitoring ratios to average market housing price and income levels. The Covid-19 pandemic has led to a sharp decline in the level of income of the population, which reduces indicators of housing affordability. It is proved that the measures of the government of the Russian Federation aimed at reducing the mortgage rate to 6.5 % when applying for a mortgage for new construction will significantly increase the housing affordability indicator. The authors conclude that for the breakthrough development of the Russian Federation, it is necessary to create a mechanism for the development of integration processes of investment and construction enterprises and organizations involved in the use of local resources, which would take into account the requirements of modern technologies of "green" growth and would contribute to a steady increase in the quality of the environment of citizens.