Income Components Research Articles

The Impact Of Revenue Diversification On Bank Profitability And Stability: Evidence From Indonesia Banking Industry

Purpose: This study aims to examine the effect of income diversification on the financial health of banks in Indonesia, focusing on income sources that significantly contribute to improving profitability and financial stability. Methodology/approach: This study uses a quantitative approach (positivism) which an associative nature. The research population consists of banking companies listed on the IDX from 2020-2023, with a sample of 168 observations selected using the purposive sampling method. The data analysis technique employs panel data regression using Eviews 12 software. Findings: The results of the regression analysis show that, total revenue diversification has a positive effect on profitability, but a negative effect on financial stability. Meanwhile, the proportion of non-interest income has a negative effect on profitability, but a positive effect on financial stability, with commission income as the most stable component of non-interest income and increasing profitability. Practical implications: This research contributes to helping bank management to be prudent in implementing income diversification strategies, by prioritizing interest income and avoiding high risk in non-interest income. The findings can also be taken into consideration for regulators in encouraging a balanced diversification strategy to maintain financial stability. Originality/value: The update in this study uses additional measurements to reveal the value of diversification that has not been discussed by previous researchers. This measurement is to differentiate diversification conditions that have similar values so that they are not considered the same. In addition, researchers also added control variables to increase the validity of the research

Final tax regression

The urgency of this research lies in the pressing need to address regressiveness in Indonesia's taxation system, particularly concerning the Final Income Tax. As such, this study aims to examine the implications of Final Income Tax on taxpayers, especially high-income individuals, and propose potential reforms to ensure fairness and progressivity in the tax regime. To achieve this objective, the research employs a combination of quantitative analysis and theoretical frameworks. Income data from High-Wealth Individuals (HWIs) is analyzed to assess the regressiveness of the Effective Tax Rate (ETR), with a specific focus on income components subject to Final Income Tax. Additionally, the study reviews existing literature on tax reform and draws insights from international best practices to formulate recommendations for policy improvements. By combining empirical analysis with theoretical insights, this research contributes to a deeper understanding of the challenges within Indonesia's taxation system and offers actionable recommendations for policymakers and Directorate General of Taxes as Indonesian tax authorities.

How does temperature affect rural income: Channels and implication of adaptation

AbstractThis paper examines the impact of daily temperature variations on rural income per capita and evaluates the effectiveness of adaptation based on China's county‐level socioeconomic statistics and household survey data. We find that high temperatures have significant negative effects on rural income per capita. Relative to the physically comfortable reference temperature between 10 and 15°C, an additional day with a daily average temperature above 30°C reduces the rural income per capita by 0.12% in the year. Evidence from micro‐data indicates that agricultural income of rural households is sensitive to high temperatures relative to other components of household income, such as wage income and transfer income, which leads to a reallocation of rural laborers across sectors. In addition, we indeed find some evidence of adaptation, but we conclude that the current adaptation pattern of rural households probably magnifies the threat of future climate change to China's agricultural sector.

Does Ethnicity Moderate the Union Dissolution Penalty for Women? A Register-based Analysis of Changes in Income Components

Union dissolution has severe consequences for women’s economic well-being. Theoretical work links these consequences to ethnic inequality. Ethnic groups vary in terms of separation rates, female employment, repartnering trajectories, kin support, and reliance on welfare benefits. The current study examines whether ethnicity moderates the dissolution penalty. To do so, the authors draw on register data, covering women from five major ethnic groups in the Netherlands: Dutch, Antillean, Surinamese, Moroccan, and Turkish. The authors describe women’s income trajectories from 1 year before to 5 years after union dissolution. Using decomposition techniques, changes in household income are decomposed into changes in six underlying income sources (i.e., earnings, benefits, alimony, partner income, and coresident family income). The results show that ethnicity moderates the dissolution penalty and, especially, the contribution of the various income sources when recovering from dissolution.

Reprint of: How do households respond to income shocks?

We use panel data from the Italian Survey of Household Income and Wealth from 1991 to 2016 to document what components of the household budget constraint change in response to shocks to household labor income, both over shorter and over longer horizons. Consumption and wealth responses are informative about the household consumption (or savings) function and thus about what class of consumption-savings model best describes the data. Empirically, we first show that shocks to labor income are associated with negligible changes in transfers and non-labor income components, modest changes in consumption expenditures, and large changes in wealth. To understand the wealth response we then split households into a sample that does not own business or real estate wealth, and a sample that does. For the first group, we find that consumption responses are more substantial (and increasing with the horizon of the income shock) and wealth responses are much smaller (and mildly increasing with the income shock horizon). Turning to theory, we argue that for this group, a simple extension of the standard permanent income hypothesis (PIH) consumption function that allows for partial insurance against even permanent income shocks explains the consumption and wealth responses well, both at short and long horizons. For the second group with business wealth or real estate wealth the standard framework cannot explain the large changes in wealth associated with income shocks. We conclude that models which include shocks to the value of household wealth are necessary to fully evaluate the sources and consequences of household resource risk.

How do households respond to income shocks?

We use panel data from the Italian Survey of Household Income and Wealth from 1991 to 2016 to document what components of the household budget constraint change in response to shocks to household labor income, both over shorter and over longer horizons. Consumption and wealth responses are informative about the household consumption (or savings) function and thus about what class of consumption-savings model best describes the data. Empirically, we first show that shocks to labor income are associated with negligible changes in transfers and non-labor income components, modest changes in consumption expenditures, and large changes in wealth. To understand the wealth response we then split households into a sample that does not own business or real estate wealth, and a sample that does. For the first group, we find that consumption responses are more substantial (and increasing with the horizon of the income shock) and wealth responses are much smaller (and mildly increasing with the income shock horizon). Turning to theory, we argue that for this group, a simple extension of the standard permanent income hypothesis (PIH) consumption function that allows for partial insurance against even permanent income shocks explains the consumption and wealth responses well, both at short and long horizons. For the second group with business wealth or real estate wealth the standard framework cannot explain the large changes in wealth associated with income shocks. We conclude that models which include shocks to the value of household wealth are necessary to fully evaluate the sources and consequences of household resource risk.

Resilience to drought and climate change disasters and its determinants in the heterogeneous pastoral Ethiopia

Disastrous livestock losses have been documented over long periods in pastoral Ethiopia, and this challenge has remained unresolved. Nevertheless, this issue has received less attention than it deserves. This study estimated resilience of households to drought and climate change using survey data collected from 2756 households in the four pastoral regions of Ethiopia. A two-step approach, along with factor analysis, was followed to estimate resilience by household categories, intervention groups, and regions. Following this, tobit model was estimated to identify factors influencing resilience. The results indicated, (1) the average resilience estimated for treated and untreated groups range from 0.32 to 0.90 and from 0.32 to 0.55, respectively. (2) The components of income and food-access, public services, social safety net, and liquid and non-liquid assets boosted the estimated resilience. To those components, daily per-capita income and expenditure, food-insecurity, health-post, mobility, time-efficient food-aid, livestock-size and diversity, and irrigated land contributed most. (3) The estimated tobit model indicated months of drought, whether households produce or purchase grain for consumption, among others, significantly influenced resilience. To improve resilience, the study advises diversified income, school-feeding, market access, water points, and timely food-aid. Over time, transformative investments in road and irrigation, augmented by technology and training for forage and crop production require attention.

Health Insurance: A Study of Consumer Behavior

Globally, People finance their medical needs through health insurance among varied ways. However, People are ignorant towards it including those who can afford it. Especially in India, subscription paralysis has been observed. An investor need to recognize the risk and manage appropriately. This study aims to examine the socio-economic factors that affect decision of investors to invest in health insurance. Data is collected through a structured questionnaire filled by 151 respondents. The relationship between demographic characteristics & policy features, as well as between demographic variables & the percentage of income invested in health insurance, was examined though Chi-square run in SPSS. The investment decision is affected by the income component and the benefits provided by an insurance policy.

Teaching IS-LM macroeconomics through material balance diagrams

This study proposes a material balance approach to teaching the IS-LM model. It introduces an easy-to-visualize box diagram approach for representing goods market equilibrium where all the income and expenditure components are simultaneously visible. Similarly, for the money market, it introduces line diagrams to visually represent the demand and exogenous supply of real liquidity. The material balance diagrams can be used to demonstrate shifts in the IS and LM curves, as well as to show the impact of monetary and fiscal policies on all components of the goods and money markets at the same time. The ability to simultaneously depict the interplay of many variables enables these diagrams to overcome the limitations of two-dimensional graphs.

Modelling stress-strain curves and forming limit curves using deep learning

Abstract The sheet metal forming process stands one of the most principal applications in production engineering with the goal of producing defect free products possessing the mechanical properties that met the working conditions requirements. The efficient metal forming process relies on a deep understanding of the material behaviour during the forming process. To achieve this, feasibility studies for new incoming components helps determine if a part is feasible for manufacturing or if design modifications are required. This simulation requires an accurate material card to replicate the real material behaviour, requiring extensive material testing data such as stress-strain curves and forming limit curves (FLC). Artificial intelligence, specifically deep learning, is a promising tool to overcome such challenges. In this study, one of the deep learning algorithms, the artificial neural network (ANN), is utilized to create material testing data for building the material cards for feasibility simulation.

Social Support Organization in Russian Empire During World War I: Financial Aspects

This study examines the interplay between state and public involvement in financing social support for the affected population during World War I (1914-1918). The research focuses on the income components of the budgets of the Supreme Council for the Care of Families of Enlisted Persons and the Moscow Committee of Grand Duchess Elizabeth Feodorovna for providing charitable assistance to families of enlisted individuals. Quantitative data on charitable donations and government subsidies serve as sources. The total amount of collected charitable donations is disclosed for the first time, with a conclusion drawn regarding their stable dynamics. It is demonstrated that the volume of charitable donations was incomparable to the need for assistance. Despite measures to stimulate donation inflow (such as lotteries and rewards for donors), charitable contributions could not establish a reliable financial foundation for the social support system. The author concludes on the increasing significance of state funding. The institutionalization of social assistance required formalization and regulation of support measures, recipient tracking, and the establishment of uniform organizational structures, among others. Thus, the pre-revolutionary period of World War I marks an important stage in the genesis of state social policy.

Difficulties in Realizing Regional Finance in Indonesia: Quantitative Descriptive Approach

The focus of this study is a comparison of the realization of regional income and expenditure components for the 2023 fiscal year in Indonesia, while the research focus is on 38 provincial governments, classified according to region. In the western part of Indonesia, there are 23 Provincial Governments, and in the eastern part of Indonesia, there are 15 Provincial Governments. The main research approach is quantitative descriptive, with a data analysis method applying comparative analysis, using the independent sample t-test technique to find a comparison of the averages of two unrelated groups, using the welsh t-test and cohen's t-test coefficient testing techniques. The study findings found the realization of regional finance in Indonesia. First, the fact that the realization of the PAD, TKDD, and PL components in the eastern region tends to be lower compared to the western region of Indonesia. This recognition is justified by comparative statistics through the significance value (< 0.05) of the welsh t-test coefficient and Cohen's coefficient effect. Secondly, the fact that the realization of the BP, BBJ, and BM components in the eastern region is very low compared to the western region of Indonesia, the uniform realization achievement of the two regions in the BL component reaches a realization figure of >80%, this recognition is justified by statistical comparison through the significance value (<0.05) of the welsh's coefficient and cohen's coefficient effect.

A comparative study on bank income diversification: which non-interest income component is beneficial?

PurposeThis paper aims to conduct a comparative study on the impact of income diversification and the main non-interest components on banks’ financial performance and risk-adjusted profitability in China and Egypt.Design/methodology/approachThis study uses both static and dynamic panel regression analyses on a sample of Egyptian and Chinese banks from 2009 to 2022.FindingsIncome diversification yields positive effects on bank profitability in Egypt and China. Trading income consistently exhibits a significant positive influence on bank profitability in both nations. Conversely, fee-based income positively impacts bank profitability in China, whereas in Egypt, this effect is observed under dynamic-based regression models. On the contrary, income diversification does not consistently increase risk-adjusted profitability in both countries, especially Egypt.Originality/valueTo the best of the authors’ knowledge, this is the first study to examine the impact of income diversification on Egyptian bank performance while identifying the most significant non-interest income components. In addition, the comparative analysis conducted in this study reveals the positioning of China, the largest economy among emerging countries, in terms of the degree of income diversification, its impact on bank profitability and the extent to which non-interest income components contribute to bank profitability when compared with Egypt, representing an emerging country characterised by different levels of bank market power, financial infrastructure and expertise. Findings hold significant implications, suggesting that bank managers and policymakers should prioritise diversifying income sources, particularly through fee-based services and trading activities in China, and trading activities in Egypt, to enhance financial profitability.

Combined use of Panax notoginseng and leech provides new insights into renal fibrosis: Restoration of mitochondrial kinetic imbalance.

In this study, we aimed to investigate the protective effects of Panax notoginseng and leech (PL) on renal fibrosis and explore the mechanisms underlying their actions. For this study, we created an adenine-induced renal fibrosis model in SD rats to investigate the protective effect of PL on renal fibrosis and explore its underlying mechanism. Initially, we assessed the renal function in RF rats and found that Scr, BUN, and urine protein content decreased after PL treatment, indicating the protective effect of PL on renal function. Histological analysis using HE and Masson staining revealed that PL reduced inflammatory cell infiltration and decreased collagen fiber deposition in renal tissue. Subsequently, we analyzed the levels of α-SMA, Col-IV, and FN, which are the main components of the extracellular matrix (ECM), using IHC, RT-qPCR, and WB. The results demonstrated that PL was effective in reducing the accumulation of ECM, with PL1-2 showing the highest effectiveness. To further understand the underlying mechanisms, we conducted UPLC-MS/MS analysis on the incoming components of the PL1-2 group. The results revealed several associations between the differential components and antioxidant and mitochondrial functions. This was further confirmed by enzyme-linked immunosorbent assay and biochemical indexes, which showed that PL1-2 ameliorated oxidative stress by reducing ROS and MDA production and increasing GSH and SOD levels. Additionally, transmission electron microscopy results indicated that PL1-2 promoted partial recovery of mitochondrial morphology and cristae. Finally, using RT-qPCR and WB, an increase in the expression of mitochondrial fusion proteins Mfn1, Mfn2, and Opa1 after PL1-2 treatment was observed, coupled with a decline in the expression and phosphorylation of mitochondrial cleavage proteins Fis and Drp1. These findings collectively demonstrate that PL1-2 ameliorates renal fibrosis by reducing oxidative stress and restoring mitochondrial balance.

Revealing the pharmacological mechanisms of nao-an dropping pill in preventing and treating ischemic stroke via the PI3K/Akt/eNOS and Nrf2/HO-1 pathways.

Nao-an Dropping Pill (NADP) is a Chinese patent medicine which commonly used in clinic for ischemic stroke (IS). However, the material basis and mechanism of its prevention or treatment of IS are unclear, then we carried out this study. 52 incoming blood components were resolved by UHPLC-MS/MS from rat serum, including 45 prototype components. The potential active prototype components hydroxysafflor yellow A, ginsenoside F1, quercetin, ferulic acid and caffeic acid screened by network pharmacology showed strongly binding ability with PIK3CA, AKT1, NOS3, NFE2L2 and HMOX1 by molecular docking. In vitro oxygen-glucose deprivation/reperfusion (OGD/R) experimental results showed that NADP protected HA1800 cells from OGD/R-induced apoptosis by affecting the release of LDH, production of NO, and content of SOD and MDA. Meanwhile, NADP could improve behavioral of middle cerebral artery occlusion/reperfusion (MCAO/R) rats, reduce ischemic area of cerebral cortex, decrease brain water and glutamate (Glu) content, and improve oxidative stress response. Immunohistochemical results showed that NADP significantly regulated the expression of PI3K, Akt, p-Akt, eNOS, p-eNOS, Nrf2 and HO-1 in cerebral ischemic tissues. The results suggested that NADP protects brain tissues and ameliorates oxidative stress damage to brain tissues from IS by regulating PI3K/Akt/eNOS and Nrf2/HO-1 signaling pathways.

The Role of Government Revenue and Expenditure Shocks in Changes in the Inflation of the Iranian Economy in Different Conditions of the Inflationary Situation (Considering the Various Components of Government Income and Expenditure)

The Role of Government Revenue and Expenditure Shocks in Changes in the Inflation of the Iranian Economy in Different Conditions of the Inflationary Situation (Considering the Various Components of Government Income and Expenditure)

Statistical Analysis of Ineqality and Poverty with Under-Reporting Incomes of Russian Households

The subject of the article is the study of inequality and poverty, taking into account under-reporting household income. The purpose of the research was to estimate the under-reporting incomes of households and their impact on the smoothing income inequality and poverty based on representative data of the All-Russian Survey of Consumer Finance (2013, 2015, 2018, 2020 and 2022). It is relevant to analyze changes in inequality for individual population groups, as well as the contribution to inequality of individual sources of income, including those hidden from statistical observation. The novelty of the study is the obtained estimates of under-reporting household income, as well as the results of an analysis of their impact on smoothing income inequality and poverty based on the specified dataThe methodology included the use of econometric modeling according to the Pissarides – Weber approach, as well as decomposition of the Gini elasticity by income sources based on the Lerman – Yitzhaki algorithm. The results of estimations differ from those previously obtained according to the data of the Russia Longitudinal Monitoring Survey – Higher School of Economics. The resulting share of under- reporting income in the disposable resources of households averaged about 20% for 2013 to 2022 and decreased by 2,3% on average per year. Decomposition of the Gini index by income sources led to the conclusion that the main contribution to inequality was made by the non-poor population. Calculation of Gini income elasticities by income sources for poor and non-poor households (taking into account the imputed component of under-reporting income) revealed their differently directed impact on inequality. Wages and social transfers increase inequality among the poor and do not increase inequality among non-poor households. Estimating under-reporting income was higher for the group of poor households. At the same time, this component increased inequality in the post-crisis year 2015 and in the pandemic year 2020 for the group of non-poor households. The obtained results will provide important information to social policy makers, taking into account the influence of under-reporting income` on the poverty reduction and equalization of the standard of living of the Russian population

Research & Development and Employees Productivity in Public Service of Nigerian Fourth Republic

Research & Development and Employees Productivity in Public Service of Nigerian Fourth Republic 1Casey Ngozi Egbon-Charles 2 Danjuma Bwese Tanko, 3 Nasamu Gambo (PhD), 4 Judith Aimiebenomo Ehiaguina, 5 Fredrick Yakubu 1,2,3,4,5Nile University of Nigeria, Abuja, Nigeria doi: https://doi.org/10.37745/gjhrm.2013/vol12n4108130 Published July 14, 2024 Citation: Egbon-Charles C.N., Tanko D.B., Gambo N., Ehiaguina J.A.,and Yakubu F. (2024) Research & Development and Employees Productivity in Public Service of Nigerian Fourth Republic, Global Journal of Human Resource Management, Vol.12, No.4, pp.108-129 Abstract: This study examines the impact of research & development on employees’ productivity in public service of Nigerian fourth republic from 1999 to 2023. The annual data for the study is sourced from World Bank’s Development Indicators (WDI) and Central Bank of Nigeria Statistical Bulletin. The dependent variable is employee’s productivity proxied by total factor productivity while the explanatory variables are research & development expenditure as percentage of GDP, employee compensation proxied for income and institutional quality components of governance effectiveness and regulatory quality. The preliminary test of Augmented Dickey Fuller (ADF) unit root test reveals mixed order of integration among the series under consideration, which reinforces the choice of Autoregressive Distributive Lag (ARDL) as estimation technique. The ARDL bounds result reveal the existence of long-run among the series under consideration. On the result, the series of research & development exhibit negative and significant relationship with employee productivity in the Nigerian public service. The complementary series of employee compensation exert negative effect and significant impact on employee productivity. Also, governance effectiveness further exerts negative and insignificant nexus while regulatory quality demonstrates significant positive effect on employee productivity. This study concludes that research & development has not enhanced employee productivity in the Nigeria public service within the period considered. Therefore, the research recommends the need for government agencies and parastatals to make adequate provision for resources to fund high-quality training programs for public sector employees. This can include providing on-the-job training, skill development workshops, and opportunities for continuous learning and professional development.

Using tax records to correct for under‐representation of top income sources in surveys

AbstractTop incomes tend to be under‐represented in survey data, making survey income distributions unrepresentative of the true ones in terms of the amount of total income and, if some of its components (sources) are missing relatively more than others, in terms of the structure of total income by components. Since the correct structure is important for some analyses, correction is warranted. Using Croatian survey and tax records data, we show that the survey correction method of Blanchet, Flores and Morgan (2022), based on reweighting and replacement of top incomes using tax records data – which corrects total income – can fail to correct its structure by components. This happens when some income components – in our case, primarily capital income – are missing much more than others, making the structure substantially different from the correct one and difficult to correct through reweighting and replacement of total income. As a solution, we propose a pre‐correction and a post‐correction, each involving income replacement based on tax records data, as supplements to the Blanchet et al. method. Either supplement substantially improves the correction of both total income and its structure by source.

Transmission of Income Variations to Consumption Variations: The Role of the Firm

Abstract We use matched employer-employee data to study the role of the firm in the transmission of income growth into consumption growth. We find that growth in income relative to the firm average (the within-firm component) translates significantly less into consumption than growth in firm average income (the between-firm component). These findings are explained by the lower persistence of the within-firm component of income, better self-insurance for workers more exposed to variations in income growth from the within-firm component, and peer effects in the workplace. Quantitatively, income persistence provides 43% of the explanatory power, self-insurance provides 35%, and peer effects provide 22%.