Demand-side Determinants Research Articles

Driving Forces of the Consumer Price Index During the Crises in the Eurozone: Heterogeneous Panel Approach

This paper examines key driving forces of inflationary pressures, taking into account supply and demand side determinants and actions of policy makers, during the pandemic and geopolitical crises in the Eurozone. Using heterogeneous nonstationary macro-panel models, especially the Mean Group (MG) and Pooled Mean Group (PMG) methods in the period 2020q1–2024q4, it is concluded that the dominant determination of inflationary pressures comes from the supply side. There is a long-run positive equilibrium relationship between the growth of energy prices and the growth of the consumer price index (CPI), and between the index representing supply bottlenecks (SBI) and the growth of CPI, while the relationship with the unemployment rate is insignificant. Also, the existence of a long-run equilibrium between the interest rate and CPI is homogeneous due to the unique monetary policy on a sample, and negative, indicating the efficiency of that policy. However, the speed of adjustment of individual economies is heterogeneous, and in the case of Greece and Ireland, insignificant. The heterogeneous or insignificant response of Eurozone member states, especially related to core-periphery asymmetry, refers to the vulnerability and structural weakness of the Eurozone economies, and the need for deeper integration.

Decomposition of food price inflation in Sri Lanka

The recent upsurge in food prices in Sri Lanka has raised significant concerns, posing a threat to the food and nutritional security of the population. However, the causal factors driving this inflation still need to be better understood. Our study, utilizing Cointegration and Vector Error Correction Models (VECM), investigates the role of supply and demand-side determinants of food inflation. The study identified changes in exchange rate, agricultural wages, fuel prices, money supply, and fertilizer prices as key drivers of food inflation in Sri Lanka. Expansion of the money supply exerted the most substantial influence on food inflation in the long run. At the same time, changes in world market prices were found to be the most influential determinants of food inflation in the short run. Findings underscore the need for a comprehensive strategy that combines supply-side enhancements and demand-side management to control food inflation in Sri Lanka.

Determinants of Kuwait long‐run and short‐run economic growth

AbstractThis paper examined the relationship between growth and its demand side determinants in Kuwait from 1970 to 2020. A set of autoregressive distributed lag models were applied to estimate the long‐ and short‐run relationships between economic growth and its determinants. The results suggest that exports, gross fixed capital formation (investment), imports and household spending exhibit a long‐run relationship with economic growth. While exports, gross fixed capital formation, share of government spending in GDP and household spending exhibit short‐run relationship with growth. Moreover, the results suggest that long‐ and short‐run economic growth in Kuwait is mainly driven by exports and to a lesser extent household spending. As Kuwaiti exports are dominated by oil exports and oil production is limited to the organisation of petroleum exporting countries quota this limits the policy makers from the most effective tool to stimulate growth. In this context Kuwait needs to enact policies to diversify exports, build a local industrial base, utilise imports to feed into non‐oil export sectors, direct investment spending to develop non‐oil industries and encourage FDI to facilitate innovation and technology transfers and spill overs to progress from a volatile oil‐based economy to a more diversified and sustainable growth path.

Drivers of European housing prices in the new millennium: demand, financial, and supply determinants

Many countries in Europe have experienced a steady increase in housing prices over the past decade, which continued even during the recent crisis. We analyze a panel of 15 European countries over the period 2000–2020. We find that demand-side determinants, such as GDP, unemployment, wage and population, strongly influence housing prices. Nevertheless, we suggest that construction costs, access to finance (credit to GDP), and financing costs (long-term interest rate) should be included to avoid biased results. We find that financial development can significantly affect housing prices in the long run. We confirm the robustness of our results by conducting a lag sensitivity analysis of selected determinants. In addition, we find a negative effect of the GFC and a positive effect of the Covid crisis on housing prices. Furthermore, we find that countries with a mild reaction to or a quick recovery from the GFC experienced significantly higher housing price growth.

The relationship between goodwill and capital structure and the moderating effect of financial market development

PurposeThis study empirically investigates the relationship between goodwill assets and capital structure (i.e. debt ratio) of firms and the moderating effect of financial market development on the relationship between goodwill assets and capital structure.Design/methodology/approachThis research applied a quantitative method. The article collects large samples of listed firms from 23 developing and nine developed countries and applied the panel data techniques. This research used firm-level data from the DataStream database for both developed and developing countries. The study uses 4,912 firm-level data from 23 developing countries and 4,303 firm-level data from nine developed countries.FindingsThe findings reveal a significant positive relationship between goodwill assets and capital structure in developing countries, but goodwill assets have a significant negative relationship with capital structure in developed countries. Moreover, financial market development positively moderates the relationship between goodwill assets and the capital structure of firms in developing countries. The results inform firm managers that goodwill assets serve as additional collateral to secure debt financing. Moreover, policymakers should formulate a debt market policy that recognizes goodwill assets as additional collateral for the purpose of obtaining debt capital.Research limitations/implicationsThe study has several implications. First, goodwill assets are identified as a factor of capital structure in this study. Fixed assets have been identified as one of the drivers of capital structure in previous research, although goodwill assets are seldom included. Second, this article shows that along with demand-side determinants, supply-side determinants also play an important role in terms of the firms' choice about the capital structure. Therefore, firms should take both the demand-side and supply-side factors into consideration when sourcing for external financing (i.e. debt capital).Originality/valueThe study considered goodwill as a component of capital structure. The study analysis includes a large sample of enterprises, including 4,912 big firms from 23 developing countries and 4,303 large firms from nine industrialized or developed countries, which adds to the current capital structure information. Furthermore, a large sample size increases the results' robustness and generalizability.

Revisiting the puzzle of endogenous nuclear proliferation

Nuclear proliferation literature typically differentiates supply-side and demand-side factors influencing the spread of nuclear weapons. These distinct approaches to the proliferation puzzle raise the following empirical questions: Does nuclear supply stimulate states’ demand for nuclear weapons? Conversely, does the demand for nuclear weapons really facilitate the acquisition of nuclear supply? If such endogeneity exists between the demand-side and supply-side determinants, how would it cause empirical bias in the estimation of their effects on nuclear proliferation? This article aims to unpack endogenous mechanisms of nuclear demand and nuclear supply over the course of nuclear proliferation. In particular, it examines two potential sources of endogeneity: (1) simultaneous interactions between states’ nuclear development decisions and nuclear technological capability and (2) selection bias in nuclear development. To address each source of endogeneity, simultaneous equation models and the duration models with selection are estimated, respectively. Contrary to what recent supply-side literature suggests, the empirical analyses reveal that states’ nuclear demand is primarily driven by external security threats instead of their existing nuclear technology, and that their successful acquisition of nuclear technology mainly follows as the result of nuclear development efforts but does not necessarily depend on individual supply-side factors. This article addresses the typical inference issues in nuclear proliferation research and contributes to our synthetic understanding of proliferation mechanisms.

Understanding household and food system determinants of chicken and egg consumption in India

Poultry is one of the fastest-growing agricultural sectors in India and its demand is said to be rising. There is a perception that higher incomes, growing population, urbanisation, and increased productivity in the industry have influenced Indian poultry consumption. However, consumer surveys have shown that the average poultry consumption in India has remained low. With this in mind, the paper analysed household determinants of chicken and egg consumption within the Indian population, using two rounds of National Sample Survey data (1993–1994 and 2011–2012). By conducting a spatiotemporal analysis of household consumption and expenditure survey and by using truncated Double Hurdle and Unconditional Quantile regressions (UQR) models, this study explored socio-economic and food system determinants of chicken and egg consumption in India. Key results highlight that while consumption has increased marginally over twenty years, supply-side determinants, such as price and poultry production concentration, influenced heterogenous consumption patterns in India. We also find evidence that historically marginalised groups consumed more chicken and eggs in comparison to non-marginalised groups and preliminary evidence suggests how household gender dynamics influence different consumption patterns. Adequate consumption of poultry is important to improve nutrient-deficient diets of vulnerable groups in India. Our findings on demand side determinants of poultry products are crucial to support consumer tailored actions to improve nutritional outcomes along with the Indian poultry sector policy planning.

Financial inclusion and its demand-side determinants: Evidence from Ethiopia

Financial inclusion is one of the development priorities of the Ethiopian Government. However, factors, which might affect it are not explored adequately with appropriate methods. To examine the relationship between financial inclusion and its demand-side determinants, we applied a simple probit model and two probit models with sample selection to the 2018/19 Ethiopia Socioeconomic Survey (ESS4). Our simple probit model estimation results show that male, older, non-Muslim, married, more educated, richest, mobile users or people who are aware of how to open a bank account are more likely to have a formal account than their counterparts. However, being from a rural area or from a larger household size reduces the likelihood of having an account. Results from the probit selection model show that rural residents, employed, richer people, or people who are out of labor force are more likely to use their account to save money than their counterparts. Furthermore, the third model shows that being non-Muslim, married, widowed, or poorer reduces the likelihood of account use than their counterparts. Thus, policies should target the most vulnerable groups of the society. Especially, rural households, women, the Muslim population, the poor, less educated people, and the young should be the focus of financial inclusion endeavors of the Government. Parallel to these policy measures, awareness of opening bank account and financial education programs should be promoted.

Examining COVID-19 response among local governments through the political market framework.

The coronavirus disease 2019 (COVID-19) pandemic has brought to the forefront the importance of a local government's role during public health emergencies. While cities around the world have led the pandemic response in their communities by extending public health services, providing socioeconomic assistance to constituents and aiding small businesses and jurisdictions in the United States have had varying degrees of success in managing the crisis. As such, this study employs the political market framework to explore the impact of supply-side determinants (form of government, preparedness capabilities, and federal aid) and demand-side determinants (population, socioeconomic factors, and political affiliation) on a local government's COVID-19 response. Given the lack of attention, the emergency management literature has paid on government form, exploring the impact of council-manager vs mayor-council systems on COVID-19 response has been this study's primary focus. Using a logistic regression and survey data across Florida and Pennsylvania local governments, this study finds government form significant for COVID-19 response. Following our findings, local governments with a council-manager form were more likely to adopt public health and socioeconomic strategies in response to the pandemic than were those with other forms. Furthermore, having emergency management plans, receiving public assistance from Federal Emergency Management Agency, community characteristics like the percent of teens and non-White residents, and political affiliation also had a significant impact on the likelihood of response strategies being adopted.

Financial inclusion demand-side determinants: analysis from Egypt

PurposeMost research studies have examined financial inclusion from a supply-side perspective, which measures access and usage of formal financial services by banking outreach indicators, the number of borrowers and the availability of other financial services in a given area. However, this approach is often insufficient to nuance the degree of financial exclusion faced by segments of the population. This study's overall objective is to empirically examine demand-side determinants of financial inclusion.Design/methodology/approachThis research examines the impact of these variables on the level to which an individual is financially included. Notably, the metric employed goes beyond the basic ownership of a bank account and measures the usage of financial services rather than just access. Quantitative data were collected through self-administered surveys targeting 456 individuals in Egypt in order to test the proposed hypotheses. Three different econometric models were tested using regression analysis.FindingsThe findings imply an insignificant relationship between financial literacy and financial inclusion. Results suggest that financial exclusion is associated with low trust in financial institutions, low-income level, low education level and being elderly, with a more substantial influence on income and education.Originality/valueEgypt suffers from a lack of up-to-date demand-side data and data available at hand allow us to know very little about the factors underpinning financial inclusion. This study is contributing demand-side, up-to-date primary data, that provides multiple insights for Egypt regarding the subject, which helps provide answers and suggestions to policy implications.

COVID-19-related anxieties do not decrease support for liberal democracy.

The COVID‐19 pandemic led to widespread fear among the population. Early studies suggested that this resulted in exclusionary attitudes and increased support for discriminatory policy measures. We still lack an understanding of the longer‐term, potentially erosive consequences that COVID‐19‐specific anxieties may carry for citizens' commitment to liberal democratic norms. In this research note, we present evidence from an original experiment in which we manipulate individuals' cognitive accessibility of their fears related to COVID‐19. We implemented this experiment in Hungary and Romania – two cases where illiberal attitudes are most likely to amplify under conditions of fear – a year and a half after the outbreak of the pandemic. The results show that our intervention is successful in elevating respondents' levels of worry, anxiety and fear when thinking about infectious diseases like COVID‐19. However, these emotions do not carry secondary effects on individuals' levels of right‐wing authoritarianism, nationalism or outgroup hostility, nor do they affect preferences for specific discriminatory policy measures aimed to fight a potential resurgence of COVID‐19. We discuss these findings in light of the literature on the demand‐side determinants of democratic backsliding and the consequences of emotions on political behaviour.

Demand-Side and Supply-Side Determinants of Financial Inclusion in Indian States: Evidence from Post-Liberalization Period

An initiative of financial inclusion helps to boost the economies of poorer regions and countries. Also, greater financial inclusion is a prime driver for attaining social inclusion in most of the developing nations across the globe. So, the main purpose of this article is to investigate the determinants of financial inclusion from both demand- and supply-side variables in Indian states during the post-liberalization periods (1993–2015). Furthermore, the study uses different econometric models such as fixed effect, random effect, panel-corrected standard errors, and feasible generalized least squares for analysis purpose. The empirical findings of this study suggest that among the demand-side factors, literacy and per capita state GDP have a positive impact on financial inclusion, whereas other two variables like rate of unemployment and percentage of rural population have a negative impact on financial inclusion. Likewise, from the supply-side factors, our empirical findings depict that all four variables (i.e., road length, electricity supply, social sector expenditure, and capital receipt) have a positive and significant effect on financial inclusion in the post-liberalized Indian states.

Distinctive role of region-specific institutions in regional entrepreneurship patterns: evidence from turkish regions

ABSTRACT There are substantial differences in the entrepreneurship levels of different regions. Recent studies have shown that supply- and demand-side determinants fall short of explaining the level and type of entrepreneurship of a region, and have emphasized the critical role of region-specific institutional factors in regional entrepreneurship. This paper aims to contribute to understanding how region-specific institutions encourage or inhibit regional innovative entrepreneurship, concentrating particularly on the less studied normative and cultural-cognitive institutions. The study, based on face-to-face semi-structured in-depth interview data from four regions of Turkey with different innovative entrepreneurship patterns, reveals the significant role of normative institutions in defining different regional innovative entrepreneurship pathways, as well as those of some regulative and cultural-cognitive institutions. It highlights further that policies and regulations that alleviate bureaucratic procedures facilitate access to financial resources and strengthen coordination between local government agencies are encouraging regional entrepreneurship in general, while policies aimed at eliminating discrimination in society, supporting tolerance and openness, encouraging individual freedom and enhancing the skills and experience of entrepreneurs through new role models are critical for alleviating the disadvantages of regions and supporting innovative entrepreneurship. We contend that these policies are essential for improving the entrepreneurship environment and altering the perception of society regarding entrepreneurship.

Educational mismatch and labour market transitions in Italy: Is there an unemployment trap?

This paper investigates the relationship between educational mismatch and individual unemployment risk in Italy. By testing the theoretical framework of career mobility theory, we look at the labour market transitions of employees and assess whether and to what extent mismatched workers have a higher probability of falling into an unemployment trap with respect to well-matched workers. We control for several demand-side and supply-side determinants of unemployment risk that are likely to have an effect on educational mismatch, and specifically, overeducation. Information on educational mismatch and on supply and demand factors come from a novel dataset obtained by merging two surveys (ICP and PLUS). The results indicate that the patterns depicted by career mobility theory seem to be at work for overeducated and young tertiary-educated workers only, and especially males. Young workers with secondary education and graduate women are at risk of the unemployment trap. The interaction between mismatch and economic structure further reveals that overeducated graduates are also at risk of the unemployment trap, but only if employed in micro and small firms or in the market services sector. Policy implications stressing the complementary role of demand and supply are derived.

Demand-side determinants of public spending allocations: Voter trust, risk and time preferences

We examine whether public spending misallocations may reflect voter demand factors such as political and interpersonal trust or risk and time preferences. A model of voter preferences over public spending tradeoffs provides individual-level testable hypotheses. The data come from an original survey that offered voters in seven Latin American countries binary choices between public spending options in education and security. Respondents with higher mistrust or impatience are more likely to choose transfers over public goods; more impatient respondents are also more likely to choose short-term spending over public investment. Within public goods, however, political mistrust and risk aversion can shift voter demand from current to investment spending. Randomized experiments providing information about the benefits of public investment have the expected average demand impacts, while respondents with high political mistrust or impatience show attenuated treatment effects.

Small and Medium-sized Enterprise Financing in the Manufacturing Industry: demand-side determinants of bank credit access in Mozambique

Small and Medium-sized Enterprise Financing in the Manufacturing Industry: demand-side determinants of bank credit access in Mozambique

DETERMINANTS OF EMPLOYEES' MOVEMENT BETWEEN LABOUR MARKET SEGMENTS

The paper studies upgrading patterns between secondary and primary segments in Polish labour market, with reference to the Segmented Labour Market theory. The type of contact (permanent vs. fixed-term) and wage distribution were used within one framework to define these labour segments. The parameters of binary choice model, based on Labour Force Survey microdata, were estimated to calculate the probabilities of shift from secondary to primary segment, and to identify supply and demand-side determinants of this upgrading. The results are, in general, in line with the trap hypothesis, pointing out to limited chances of upward shift from secondary to primary labour segment. However, this upward mobility has increased in recent years, being a result of changes in real (measured by lowering unemployment rate) and institutional sphere of the Polish labour market. Individual’s age, education attainment, propensity to invest in human capital, as well as the size of an enterprise appeared to be the most important divers of inter-segments upgrading. Moreover, regional as well as sectoral differences in probability of upgrading were identified – this probability was higher in the case of workers living in regions with large agglomerations and close proximity to the German labour market.

A rapid review of evidence on the determinants of and strategies for COVID-19 vaccine acceptance in low- and middle-income countries.

BackgroundVaccine acceptance and hesitancy among the general population and health care workers play an important role in successfully controlling the Coronavirus Disease (COVID)-19 pandemic. While there is evidence for vaccine hesitancy across the globe, wide variation in factors influencing vaccine acceptance has been reported, mainly from High-Income Countries (HIC). However, the evidence from Low- and Middle-Income Countries (LMICs) remains unclear. The objective of this review was to describe the determinants of vaccine acceptance and strategies to address those in an LMIC context.MethodsThe World Health Organization’s (WHO) Measuring Behavioral and Social Drivers of Vaccination (BeSD) Increasing Vaccination Model was employed to identify factors that influenced vaccine acceptance. All evidence related to supply-side and demand-side determinants and social and health system processes were examined. A comprehensive search for published literature was conducted in three databases and grey literature in relevant websites of government, multinational agencies, and COVID-19 resource aggregators, followed by a narrative synthesis.ResultsOverall, the results showed that the vaccine acceptance rates differed across LMICs, with a wide variety of reasons cited for vaccine hesitancy. Vaccine acceptance was reportedly greater among males, those with higher education, elevated socio-economic status, the unmarried, those employed as health care workers. Evidence suggested that exposure to misinformation about COVID-19 vaccines and public concerns over the safety of vaccines may contribute to lower acceptance rates. Strategies to increase vaccine acceptance rates included direct engagement with communities through influencers, including community leaders and health experts; clear and transparent communication about COVID-19 vaccines, financial and non-financial incentives; and strong endorsement from health care workers. Trust in government was identified as a significant enabler of vaccine acceptance.ConclusionsThere is a need for measures to address public acceptability, trust and concern over the safety and benefit of approved vaccines. Local context is essential to consider while developing programs to promote vaccine uptake. The governments worldwide also need to strategize to develop plans to address the anxiety and vaccine related concerns of community regarding vaccine hesitancy. There is a need for further research to evaluate strategies to address vaccine hesitancy in LMIC.

Understanding the complexity of demand-side determinants on vaccine uptake in sub-Saharan Africa.

Routine vaccination annually prevents millions of deaths worldwide but is underutilized in sub-Saharan Africa (SSA). The complexity of socio-cultural factors impacting vaccine uptake is not well understood. Hence, this paper aims to review the socio-cultural determinants of vaccine uptake and visualize their interrelationships. We conducted a literature search using Pubmed and Embase databases, including articles published from 2000 to 2019 describing socio-cultural demand-side determinants for vaccine uptake. Using the Andersen and Newman Framework of Health Services Utilization, demand-side determinants were categorized as predisposing, enabling or need factors. A qualitative system dynamics approach was employed to visualize how these factors and their dynamic interrelationships influence vaccine uptake. This visualization, by means of a causal-loop diagram (CLD), was mostly based on a qualitative input, with the majority being statements of the authors. These statements were abstracted from the papers found in the review. Quantification was done by counting direct (statistical) associations between each determinant and 'timely and full routine immunization coverage'. A total of 90 articles, primarily from Nigeria (n = 23), Ethiopia (n = 17) and Kenya (n = 11), met the inclusion criteria. We find that maternal autonomy and the perceived benefits caregivers attach to vaccination and exert their influences on many other factors through several feedback loops, thereby influencing timely and full routine immunization coverage. Utilization of health services (supply-related) and access to information (demand-related) were considered as high-potential leverage points. Quantification has shown that maternal autonomy and perceived benefit have an unclear evidence base. Future research should focus on these key players as they play a central role in multiple complex pathways, through which they could influence the uptake of vaccines in SSA.

Modelling of supply and demand-side determinants of liquefied petroleum gas consumption in peri-urban Cameroon, Ghana and Kenya

Household transitions to cleaner cooking fuels (for example, liquefied petroleum gas (LPG)) have historically been studied from a demand perspective, with clean energy usage expected to increase with improvements in household socio-economic status. Although recent studies demonstrate the importance of supply-side determinants in increasing clean cooking, few large-scale studies have assessed their importance quantitatively, relative to demand-related factors. Here, as part of the CLEAN-Air(Africa) study, we examine a population-based survey (n = 5,638) of cooking practices in peri-urban communities within Cameroon, Kenya and Ghana. Multilevel logistic and log-linear regression assessed the demand and supply-side determinants of LPG usage (primary versus secondary fuel) and consumption (kilograms per capita per year), respectively. Supply-side factors (for example, cylinder refill and transportation costs) and the use of single versus multiburner stoves were better predictors than household socio-economic status for both the probability of primarily cooking with LPG and the annual LPG consumption. These results highlight the need for policies that promote LPG supply and stove equipment to meet household needs.