Evidence Of Substitution Effect Research Articles

Cycling into Sustainability: Lessons from the Netherlands for Slovenia’s E-Bike Adoption

This study investigates whether Slovenia can learn from the Netherlands to enhance its bicycle commuting culture and how e-bikes can improve cycling performance among its residents. The research utilises secondary data from the Statistical Office of the Republic of Slovenia and Statista, covering variables such as bicycle sales, gross domestic product, and urbanisation rates from 1997 to 2024. The data are analysed using Vector Auto Regression (VAR). The results reveal that urbanisation positively influences both traditional and e-bike demand, highlighting the importance of improved cycling infrastructure. However, GDP negatively impacts bike demand, suggesting affordability issues that could hinder adoption without financial support. These findings indicate that e-bikes play a transformative role, particularly in overcoming Slovenia’s hilly terrain and long-distance commuting barriers, with evidence of substitution effects between traditional bicycles and e-bikes. Lessons from the Netherlands emphasise the integration of cycling with public transport, financial incentives, and cultural promotion of cycling. Slovenia’s growing e-bike market signals a promising shift towards sustainable mobility, but strategic investments in infrastructure and policies are crucial.

The impact of African swine fever news sentiment on the Korean meat market.

Our study analyzed the impact of African swine fever (ASF) news on the Korean meat market using sentiment analysis. We applied a neural network language model (NNLM) to generate a sentiment index indicating whether the news had a positive or negative impact on consumer expectations. We analyzed 24,143 news articles to estimate the impulse responses of meat price variables to sentiment shocks. Our study contributes significantly to agricultural economics as it applies NNLM to generate a sentiment index. The empirical results indicated that ASF news sentiment has a substantial impact on meat prices in Korea, and there is evidence of substitution effects among different types of meat. ASF news has a positive impact on the price of pork, negative effects on beef and chicken prices, and a greater impact on the price of chicken than beef. The findings imply that the effect of ASF news on demand outweighs its impact on supply in the pork market, whereas the effect on supply surpasses the effect on demand in the beef and chicken market. We believe our methods and results will inspire discussions among applied economists studying consumer behavior in this specific market and could encourage the application of big data analysis to the agricultural economy.

Fewer guns, less crime: evidence from Brazil

SUMMARY This paper studies the effects of legislation in Brazil that banned the right to carry guns and provided for a voter referendum regarding whether to ban the sale of all firearms. Using a regression discontinuity design, I find that gun-related homicides decreased by 12.2% and gunshot wounds that were ‘intended to kill’ by 16.3%, with the reduction of the former being especially pronounced in high-crime areas and among black males. There is no evidence of substitution effect as non-gun-related homicides were not affected. Two pieces of evidence suggest that the mechanism explaining this result is a decrease in the number of people carrying guns in response to the legislation: first, the number of cases of illegal gun carrying decreased and second, only gun-related homicides taking place outside the residence were reduced. Analysis of the subsequent voter referendum, which was defeated by a wide margin, shows stronger support for the complete firearms ban in the areas more affected by gun violence.

Are Cryptocurrencies Homogenous?

This article investigates if the returns of cryptocurrencies are affected in similar ways by a selection of demand and supply-side determinants. These determinants include both economic determinants, such as macroeconomic factors and uncertainty, and technical determinants, such as token supply, distribution and transaction validation. Homogeneity among cryptocurrencies is tested via a LASSO-model in which the determinants of returns that have been identified in research on Bitcoin are applied to a sample of 12 cryptocurrencies. The analysis goes beyond much existing research by simultaneously covering different time periods and design choices of cryptocurrencies. The results show that cryptocurrencies are heterogenous, apart from some similarities in the impact of technical determinants. The cryptocurrency market is highly integrated with evidence of substitution effects. Further, design choices related to demand and supply among cryptocurrencies often explain the impact of determinants of return. It is important to consider heterogeneity among cryptocurrencies in order to enlighten the ongoing debates about the social contribution, economic advantages and risks, and potential regulation of cryptocurrencies.

Crime and Political Effects of a Concealed Carry Ban in Brazil

This paper studies the effects of legislation in Brazil that banned concealed carry nationwide in 2003, and provided for a voter referendum 22 months later regarding whether to ban the sale of all firearms. Using a regression discontinuity design, I find that gun-related homicides decreased by 12.2 percent, with the reduction especially pronounced in high-crime areas and among black males. Other crimes involving guns also declined. There is no evidence of substitution effect as non-gun-related homicides were not affected. Two pieces of evidence suggest that the mechanism explaining this result is a decrease in the number of people carrying gun in response to the legislation: first, the number of illegal gun carrying decreased and second, only gun-related homicides taking place outside the residence were reduced. Analysis of the subsequent voter referendum, which was defeated by a wide margin, shows stronger support for the complete weapons ban in the areas more affected by gun violence.

Donating Time or Money? The Effects of Religiosity and Social Capital on Civic Engagement in Qatar

Few studies have examined the role of religiosity and social capital on civic engagement in the context of a Muslim country. In this paper, we explore the impact of religiosity and social capital on charitable donations and volunteerism in Qatar. Drawing on a nationally representative survey from Qatar, we consider various attitudinal and behavioral measures for capturing religiosity and social capital. The results indicate that, even after controlling for a wide range of demographic variables, behavioral measures have a stronger effect than attitudes. Individuals who regularly perform daily prayers are more likely to donate than those individuals who simply describe themselves as religious. Similarly, individuals who are more active in their neighborhood engagement are more likely to volunteer than those who merely report high levels of social trust. These results suggest that when it comes to the relationship between religiosity, social capital and civic engagement, individual behavior is much more predictive than attitudes alone. We also find that even in the case of Qatar, where citizen wealth has rapidly increased in the last few decades, there is little evidence of substitution effects: citizens do not appear to trade-off or substitute between time and money. Instead, more religious and active citizens are likely to do both.

Temporary Agency Work and Employment Protection

Using a unique panel database, we identify volatility and plant size as relevant characteristics associated with the intensive and extensive margins of using temporary agency workers (TAW). We also evaluate the effects of a regulation that increased the regulatory burden on TAW. We find a negative impact of this regulation on a plant’s total employment (2% decrease) but negligible effects on a plant’s value added and production levels. We present evidence of substitution effects. On average, plants that used TAW before the regulation increased the use of permanent workers by 1% and inventory share by 10% after the regulation.

Bank Lending Margins in the Euro Area: The Effects of Financial Fragmentation and ECB Policies

In the present paper we study the determinants of the margins paid by euro-area non-financial corporations (NFCs) for their bank loans on top of the rates they earn for their deposits (bank lending margins). We use panel VAR techniques, in order to test for causality relationships and produce impulse response functions for eleven euro-area countries from 2003:1 to 2014:12. The countries are separated into two groups (distressed and non-distressed), in order to examine for heterogeneities in the relationships between lending margins; the period is also separated with reference to the peak of the global financial crisis (before and after the collapse of Lehman in September 2008). We find that significant heterogeneities existed even before the global financial crisis and remained in its aftermath, although the magnitude and the direction of the effects exercised by the explanatory variables have changed. Furthermore, apart from finding that market concentration and the prudence of banks’ management increase the lending margins NFCs pay for their loans, there is evidence of substitution effects between financing obtained from banks and corporate bond markets. The provision of ample liquidity from the ECB, in the aftermath of the global financial crisis was found to be effective only for the core countries, suggesting that further policy actions are needed in order to reduce the fragmentation of bank lending and promote financial integration to the benefit of the euro-area real economy.

Pensions as a Form of Executive Compensation

AbstractThis paper investigates the role of pensions as an element of total executive compensation, and the relationship between pensions and performance‐based compensation in executive pay. Using hand‐collected data on FTSE 100 CEOs and senior executives from 2004−2011, we document that pensions function as a substitute for performance‐based compensation (primarily bonuses) in both cross‐sectional and time‐series settings. We also examine the effect of corporate governance characteristics on executive pensions. We find that corporate governance characteristics associated with stronger board monitoring play a constraining role on the magnitude of pensions. Our evidence of substitution effects between pensions and performance‐based compensation is consistent with a managerial power view of executive compensation‐setting, and the use of pensions as a ‘stealth’ element of compensation. Our findings are robust to considering different types of pensions, product market competition, and cross‐listing. Sub‐period analysis shows that pensions decrease and substitution effects weaken following the 2008 financial crisis. Moreover, we find no evidence that the use of compensation consultants with potential conflicts of interest is associated with higher pensions. Overall, our study contributes to a greater understanding of the role of pensions in executive compensation, and shows the importance of including pensions in analysis of executive compensation.

Determinants of Euro-Area Bank Lending Margins: Financial Fragmentation and ECB Policies

In the present paper we study the determinants of the margins paid by euro-area non-financial corporations (NFCs) for their bank loans on top of the rates they earn for their deposits (bank lending margins). We use panel VAR techniques, in order to test for causality relationships and produce impulse response functions for eleven euro-area countries from 2003:1 to 2014:12. The countries are separated to two groups (distressed and non-distressed), in order to examine for heterogeneities in the relationships between lending margins, the period is also separated with reference to the peak of the global financial crisis (before and after the collapse of Lehman in September 2008). We find that significant heterogeneities existed even before the global financial crisis and remained in its aftermath, although the magnitude and the direction of the effects exercised by the explanatory variables have changed. Furthermore, apart from finding that market concentration and the prudence of banks’ management increase the lending margins NFCs pay for their loans, there is evidence of substitution effects between financing obtained from banks and corporate bond markets. The provision of ample liquidity from the ECB, in the aftermath of the global financial crisis was found to be effective only for the core countries, suggesting that further policy actions are needed in order to reduce the fragmentation of bank lending and promote financial integration to the benefit of the euro-area real economy.

The two sides of academic research: do basic and applied activities complement each other?

It is generally acknowledged that the cuts in government funding for research implemented in several European countries will induce academic researchers to increase their interaction with non academic entities to promote the acquisition of external funding for research. Indirectly this implies that there will be a shift in the focus of academic scientific activity from basic to applied research via private research contracts and consultancy work. The aim of our paper is to assess the extent of the trade-off between basic research and applied activity in academic research departments. We use data for the universe of Italian academic departments over the period 2006–2011 and estimate whether increased applied activity is substituting or complementing basic research activity. We provide empirical evidence of a strong substitution effect for life sciences departments and, to a lesser extent, for engineering and technology departments, while there does not seem to be evidence of a substitution effect for departments whose scientific activity revolves around basic science.

Competition between Egress Transport Modes

This paper describes the results of a stated choice experiment that was conducted to understand better the substitution and synergy effects among various options for egress transport modes. The stated choice experiment that was designed varies the availability of alternative transport modes and makes it possible to identify which modes compete for the same market share. The survey consisted of 996 respondents in the Netherlands. The results show evidence of substitution effects of high-frequency public transport services on other transport modes, especially on train taxi and public transport bicycle, and evidence of synergy effects between low-frequency public transport services, especially taxi and walking. Taxi and train taxi show substitution effects on car-based transport modes and synergy effects on most other modes. The three bicycle alternatives do not exhibit any significant availability effects; this implies that they appear to have their own market.

Competition Between Egress Transport Modes: Stated Choice Model Incorporating Availability Effects

This paper describes the results of a stated choice experiment that was conducted to understand better the substitution and synergy effects among various options for egress transport modes. The stated choice experiment that was designed varies the availability of alternative transport modes and makes it possible to identify which modes compete for the same market share. The survey consisted of 996 respondents in the Netherlands. The results show evidence of substitution effects of high-frequency public transport services on other transport modes, especially on train taxi and public transport bicycle, and evidence of synergy effects between low-frequency public transport services, especially taxi and walking. Taxi and train taxi show substitution effects on car-based transport modes and synergy effects on most other modes. The three bicycle alternatives do not exhibit any significant availability effects; this implies that they appear to have their own market.