Negative Price Effect Research Articles

Impacts of China’s Minimum Grain Procurement Price Program on Agrochemical Use: A Household-Level Analysis

China’s minimum grain procurement price program aims to boost grain production and ensure food self-sufficiency. It may also affect the already very high levels of chemical fertilizer and pesticides consumption, but little is known about these potential side-effects. In this paper, we apply panel data regression techniques to a large rural household-level data set for the period 1997–2010 to examine whether and how the minimum grain procurement price program affected households’ agrochemical use. We find that the minimum grain procurement price program negatively affected both chemical fertilizer and pesticides use, with pesticides use being more responsive than the use of fertilizer. The higher wheat and rice prices that resulted from the program stimulated the use of agrochemicals, but they also stimulated area expansion which contributed to lower agrochemical use per unit of land. These counteracting indirect effects were overshadowed by the large negative direct effect of the minimum procurement price of rice on the use of fertilizer and pesticides.

The Effect of Crude Oil Price on Merchandise Trade: Evidence from East Asia and Pacific

One of the most important production inputs is energy, particularly crude oil. The impacts of oil price fluctuations on global trade flows can be understood by the uncertainty channel, fluctuations in oil prices may create uncertainty about the future path of the oil price, causing consumers to postpone irreversible purchases of consumer durable goods, and also causing firms to postpone irreversible investments, and also recent hikes and fluctuations in oil prices since 1999 have attracted attention and invoked concerns about their devastating effects on a variety of economic activities. The objective of this research is to determine the influence of crude oil price to merchandise trade in East Asia and Pacific. This research uses quantitative methods and linear regression analysis. The results of the analysis show that there is negative and significance effect of crude oil price on merchandise trade in East Asia and Pacific for the period 1987 – 2019.

IS THE TRANSITION TO RENEWABLE ENERGY CONSUMPTION HAMPERED BY HIGH OIL PRICES?

The article examines the impact of oil price, income and CO2 emissions on renewable energy consumption in the case of Kazakhstan for the data period from 1992 to 2015, employing FMOLS and CCR methods. Empirical results reached that there is a long-run positive and statistically significant impact of income on the renewable energy consumption whereas a negative effect of oil price and CO2 emissions in Azerbaijan, for the investigated period. The results of this article might be beneficial for the policymakers and support the current literature for next researches for oil-rich developing countries.Keywords: Renewable energy consumption; Income; Oil price; FMOLS; CCR; KazakhstanJEL Classifications: 013, P28, Q42, Q43DOI: https://doi.org/10.32479/ijeep.11345

The influence of privately initiated rezoning on housing prices

PurposeThe purpose of this paper is to evaluate the parcel-level impacts of the zoning change.Design/methodology/approachUsing hedonic regression and propensity score matching econometric techniques, this paper analyses single-family housing prices within Fulton County Georgia. This paper combines data on the parcel-level zoning changes with nearby housing sales transactions to study the potential externality effects because of rezoning induced by private parties.FindingsThe paper finds evidence of heterogeneous rezoning effects, depending upon the type of rezoning conducted. At a distance within 0.75 miles, housing prices appreciate by 8.31% when nearby privately initiated rezoning maintains the residential character of a neighbourhood. However, housing prices decline by 21.26% when residential housing zones are converted to non-residential housing zones. The negative influences of rezoning residential use to non-residential uses decline as distance increases.Originality/valueThe analysis provides quantitative information on the impact of rezoning on residential property prices. Planning officials and developers can use these results to assuage homeowner fears of potential negative housing price effects associated with rezoning.

The Impact of Oil Price on Transition toward Renewable Energy Consumption? Evidence from Russia

This research investigates the impact of oil price, income and carbon dioxide emissions on renewable energy consumption in Russia for the data period from 1990 to 2015, using the Vector Error Correction Models and the Canonical Cointegrating Regression method. This article is the only study conducting individual time-series analysis that emphasizes the effect of oil price on renewable energy consumption in the case of Russia. The results of empirical analysis conclude that oil price affects renewable energy consumption negatively. The negative oil price effects on renewable energy use can be interpreted as a sign of issue that stems from higher oil prices and slows the transition from conventional to renewable energy sources. Additionally, we found that there is a positive and statistically significant influence of real GDP per capita as a proxy of income on renewable energy consumption, whereas the carbon dioxide emissions have a negative and statistically insignificant influence on renewable energy consumption. Considering these empirical results, Russia, which has a significant share in energy production in the world, should focus on the use of renewable energy in order to maintain this superiority and its sustainability. The findings of this paper may be useful to policymakers and may help to contribute to existing literature for future research in the case of oil-exporting countries.

The moderating effect of average wage and number of stores on private label market share: A hierarchical linear model analysis

Existing research on private label market share is primarily in the context of the Western market. The Chinese market context research is scarce, although private labels are developing rapidly in the past several years. This study investigates how the average wage and number of stores affect the Chinese market's private label market share. More importantly, this paper examines the moderating effect of the average wage and the number of stores on the relationship between the private label market share and product assortment as well as the relationship between the private label market share and pricing. Data collected from a Chinese supply chain dyad is analyzed to study category management using hierarchical linear models. The results reveal that the average wage and the number of stores positively affect the private label market share. Furthermore, the average wage enhances the negative effect of the number of brands, weakens the negative effect of the private label price, weakens the positive effect of national brand price. Meanwhile, the number of stores enhances the positive effect of the SKU proliferation of private label, enhances the negative effects of the number of brands, and enhances the negative effect of the private label price. This study contributes to category management. Furthermore, the findings will be valuable to domestic and international grocery marketers and retailers operating private labels in China.

Labor Market Effects of Trade Induced Technological Change Under Intellectual Property Rights Protection

In this paper I examine the impact of trade liberalization on labor market outcomes using a model with high- and low-skilled workers and intellectual property rights (IPR) protection. I argue that IPR protection is crucial to determine labor market effects of trade liberalization in skill-abundant countries. With IPR protection R&D firms fully internalize the greater market size for their innovation. This leads to low-skill-biased technological change countervailing the negative labor market effects of relative price changes in a Heckscher-Ohlin trade model (Stolper-Samuleson theorem). To solve the general equilibrium model I calibrate it to match the US labor market between 2008 and 2014. I demonstrate that IPR protection cushions the negative price effects of trade liberalization, i.e., the wage gap does not increase as much, all workers face lower unemployment rates and higher wages. Without IPR protection the wages for low skilled workers would decline and their unemployment rate increases after trade liberalization. Moreover, I use CPS (current population survey) data to empirically confirm the model predictions.

The relationship of nursing home price and quality of life

BackgroundKnowledge about the relationship between the residents’ Quality of Life (QOL) and the nursing home price is currently lacking. Therefore, this study investigates the relationship between 11 dimensions of QOL and nursing homes price in Flemish nursing homes.MethodsThe data used in this cross-sectional study were collected by the Flemish government from years 2014 to 2017 and originates from 659 Flemish nursing homes. From 2014 to 2016, data on the QOL of 21,756 residents was assessed with the InterRAI instrument. This instrument contains 11 QOL dimensions. Multiple linear regression analyses were conducted to examine the research question.ResultsThe multiple linear regressions indicated that a 10 euro increase in the daily nursing home price is associated with a significant decrease (P < 0.001) of 0.1 in 5 dimensions of QOL (access to services, comfort and environment, food and meals, respect, and safety and security). Hence, our results indicate that the association between price and QOL is very small. When conducting a subgroup analysis based on ownership type, the earlier found results remained only statistically significant for private nursing homes.ConclusionOur findings show that nursing home price is of limited importance with respect to resident QOL. Contrary to popular belief, our study demonstrates a limited negative effect of price on QOL. Further research that includes other indicators of QOL is needed to allow policymakers and nursing home managers to improve nursing home residents’ QOL.

Asylum seekers and house prices: Evidence from the United Kingdom

We estimate the effect of asylum seekers on house prices in England and Wales from 2004 to 2015, and find, using panel data and time series methods, that the government’s dispersal policies have had small but statistically significant negative effects on housing prices, especially for lower-priced and lower-quality housing units. Our panel data regressions rely on variation across time and localities, and account for endogeneity bias using instrumental variables, to identify these causal effects. Time series regressions depend on plausibly exogenous nationwide flows of new asylum seekers, and provide evidence that negative house price effects are larger in areas that supported Brexit.

Effect of working forest conservation easements on surrounding property values

The hedonic pricing method was applied to examine the effect of working forest conservation easements (WFCEs) on the value of surrounding land parcels in state of Georgia. Data were collected on attributes of WFCEs in 62 counties and 46,580 property sales occurring from 2001 to 2018. Results suggested that one size did not fill all and that the type of property (agricultural, commercial or residential) near a WFCE played a large role in determining potential price effects of land cover types and other attributes. Additionally, an increase in the age of the nearest WFCE had a negative price effect on surrounding properties. This research could be used in strategic management decisions to maximize both conservation and economic outcomes.

Optimal pricing and replenishment policy for non-instantaneous deteriorating items with varying rate of demand and partial backlogging

This paper proposes an inventory model for non-instantaneous deteriorating items with varying rate of demand and partial backlogging. The demand rate function has negative and positive exponential effect of price and promotional effort, respectively, when the product has no deterioration. Afterwards, the demand rate function assumes multiplicative exponential form of price-promotion and time wherein price-promotion and time each have exponential effect on demand rate. Under these settings, the criterion for optimal replenishment schedule, for any given selling price, is developed and deduced that optimal replenishment policy not only exist but also is unique. Next, it is shown that the total profit per unit time is concave function of price when optimal replenishment schedule is supplied. Numerical example is presented to demonstrate the applicability of the model accompanied by the sensitivity analysis. Results of numerical example indicates that granting promotional effort not only induces more demand but plays significant role to improve the profit.

Oil sector and CO2 emissions in Saudi Arabia: asymmetry analysis

Saudi Arabia is an oil-abundant country, and gather a significant portion of its income from the oil sector. Owing to the country’s over-dependency on the oil sector, increasing greenhouse gas emissions due to economic growth have often been neglected. The present research aims to estimate the effects of non-oil income per capita, the oil sector income share, urbanisation, and gasoline price on the CO2 emissions per capita in Saudi Arabia throughout 1970–2014. We use the latest nonlinear cointegration technique to estimate the asymmetrical effects of the oil sector on CO2 emissions. We found a long-run relationship in our hypothesised model. We also found a positive impact of non-oil income and urbanisation on CO2 emissions per capita and a negative effect of gasoline price. Moreover, a positive asymmetrical impact of oil income share on CO2 emissions is observed. The increasing oil income share has a more significant positive impact on CO2 emissions than that of decreasing oil income share. Moreover, the effect of increasing oil income share is found greater than non-oil income, urbanisation, and gasoline price. It is suggested to use tight environmental policies while formulating economic growth and urbanisation policies. Further, the economy should cut down its dependency on the oil sector to ensure a cleaner environment.

The Advisory and Monitoring Roles of the Board - Evidence from Disruptive Events

We study the contribution of directors to firm resilience by assessing the relative importance of their advisory and monitoring roles at times of crisis. Based on manually collected US data, we document that four bord-related variables affect market reactions around disruptive events. Board independence and the presence of directors with industry expertise exacerbate the negative share price effect, whereas the converse is true for director busyness and board size. These reactions imply that, in times of crisis, advice-oriented boards fare better than monitoring-oriented boards.

Market Reaction to Large Transfers on the Bitcoin Blockchain - Do Size and Motive Matter?

Cryptocurrency markets are often deemed inefficient. This paper explores how the market reacts to a specific form of public information: large Bitcoin transactions. The event study examines the price effects of 2,132 transactions involving at least 500 Bitcoins over the period September 2018 to November 2019. Across all transactions, we find significant negative price effects for the minutes closely around the events. Yet the effects are positive over the period from the event to 15 minutes thereafter. We analyze further effects of the size and the probable motive of the transfers by dividing the sample into quartiles and by clustering specific Bitcoin addresses of cryptocurrency exchanges involved in the transfers. We find that the price effects can differ significantly depending on the size and type of a transaction. The results indicate that the market recognizes the nature of the transfer and prices in new information. While this constitutes evidence of efficiency, yet more efficient reactions remain conceivable.

Impacts of Tourism Demand on Retail Property Prices in a Shopping Destination

Understanding the relationship between tourism demand and retail property prices is of great significance to tourist destinations, especially shopping destinations. The increase in tourism demand may alter the implicit prices of certain retail property characteristics (e.g., age and accessibility to transit). This study examines how tourism demand (measured by tourist volume) affects retail property prices in the tourist precinct of a shopping destination, namely Hong Kong. The implementation of the policy Individual Visit Scheme (IVS) in 2003 in Hong Kong has substantially increased tourist shoppers from Mainland China, and it is used as a quasi-natural experiment of the increased tourist volume. Spatial and non-spatial hedonic pricing models are developed based on the ground-floor retail property transaction data of Causeway Bay, Hong Kong before and after the IVS (1993–2011). The findings of this study are as follows. (1) Accessibility to transit has a larger positive price effect after the implementation of the IVS. (2) The implicit price of accessibility to accommodation facilities is not significantly altered by the implementation of the IVS. (3) Age has a larger negative price effect after the implementation of the IVS. The first two outcomes are related to the economic concerns of tourist shoppers, while the last can be explained by their hometown experience. Finally, practical implications are discussed.

Does housing price destroy marital stability? Evidence from South Korea

ABSTRACT This study examines the impact of housing price on the divorce rate in South Korea using a fixed effects model and dynamic panel data. There is currently a lack of consensus in the literature regarding the effect of house price on divorce. We simultaneously consider both house price and rental cost to distinguish a positive and negative effect of housing price. Using a cross-regional dataset of 15 provinces in South Korea from 1990 to 2013, we show that the wealth effect of house price changes on divorce rates is different from the effect of rental cost. All regression results indicate positive and statistically significant wealth effects of house price, but negative effects of the rental price changes on divorce rates.

Risk to Residential Property Values from Climate Change-Related Flooding Hazards: A Mixed Methods Approach

Greater South Dunedin (GSD) has been identified as one of the most vulnerable areas to Climate Change-Related Flooding Hazards (CCRFH) in New Zealand, yet little is known about the magnitude of how CCRFH will impact property values. We address this issue by proposing a novel modelling strategy that links CCRFH, and in particular Sea Level Rise (SLR), to of residential property value, at fine geographical resolution. The strategy is both empirical and forward looking modelling. The empirical analysis reveals a significant negative price effect for houses associated with flooding risks in the local market (between 5.9% and 3.1%), which existed prior to the June 2015 South Dunedin flood and was exacerbated temporarily after this event. The forward modelling projections apply a “bathtub fill” approach to elevation data in a Geographical Information System (GIS) to identify the properties that will be inundated (using IPCC scenarios to 2100). Uncertainties arising from data error and long-term projection are modelled through Monte Carlo simulation. We find that, the risks of permanent inundation are currently limited and only become non-negligible in a “business-as-usual” pathway. The risks of periodic flooding, however, are strikingly large across all scenarios in the presence of extreme events. With high tides, the number of inundated properties may be as high as 39%. With extreme rainfalls, this number potentially increases to 41%. Taken together, CCFRH may affect property worth up to NZ$ 983 million in rateable value (37% of GSD property market). We conclude by acknowledging the limitations of our “bathtub fill” approach.

Housing Price and Health in Urban China

Recently many studies have found that unemployment rate, housing price fluctuation and economic crisis would have an important influence on mental and physical health. Housing price has a significant impact on the economic and social development. Since the housing reform in 1998, the rapid development of the real estate industry has become an important factor driving China’s economic cycle fluctuations. However, some scholars have found that the continuing rise in housing price has brought about a series of social and economic problems, such as reducing consumption, income inequality and so on. Therefore, does the rising housing price affect the health and welfare in urban China?Theoretically, housing price will have an effect on the health in urban China by at least three underlying mechanisms. Firstly, it would bring a positive wealth effect to the health of local residents; Secondly, the rising housing price might raise housing purchase and rental costs, and have a negative effect on residents’ physical and mental health; Thirdly, housing price is also the signal of economic vitality, regional infrastructure and the public service system, it would bring down the uncertainty of future economic development and promote the health of residents. In this paper, we use the 2010−2014 wave of China Family Panel Studies（CFPS）to investigate the effect of housing price on health and the underlying mechanism in urban China.Further, we also find that housing price has a heterogeneous effect on health, which is consistent with a wealth effect, a slave effect, and economic development in the area. The positive effect of housing price on physical health is concentrated on those with two or more housing, larger housing, higher property value, without unmarried adult sons, high-income areas or first-tier cities. The negative effect of housing price on mental health is stronger for those with no housing, smaller housing, lower property value, low-income areas or non-first-tier cities. Finally, we analyze the influence path of housing price on health, and find that the rising housing price will significantly improve residents’ health care utilization, increase the probability of physical exercise, and reduce smoking and drinking behaviors.This paper tries to make some contributions in the following aspects: Firstly, in order to solve the endogenous problem caused by omitted variables and reverse causality, we use the province-fixed effect, year-fixed effect, and individual province-fixed effect. Secondly, we use a number of subjective and objective indicators to measure their mental and physical health to extend the connotation of health. Thirdly, we compare the results of multiple groups, finding that housing price has different effects on the health of residents with different characteristics, and verify the three mechanisms of housing price to health. Fourthly, we also investigate the influence path of housing price on physical health, finding that the promoting effect of housing price on physical health can be attributed to the increase of regular exercise and medical utilization, and the decrease of smoking and drinking behaviors.

Getting High and Low Prices: Marijuana Dispensaries and Home Values

AbstractLaws concerning marijuana have undergone liberalization in many North American markets, enabling the establishment of marijuana dispensaries. Local externalities generated by dispensaries may impact home values, particularly by influencing demand for the surrounding neighborhood. Recent empirical evidence has found a positive effect of dispensaries on home values. I use unique data on 84 dispensaries and 62,000 repeat home transactions from Vancouver, Canada to estimate the effect of dispensaries on home prices. I find no evidence that dispensaries increase local home values in Vancouver and some evidence of a negative price effect for homes located within 100 m of a dispensary.

Energy price shocks and dynamics of current account in Turkey: a FAVAR Approach

Purpose- In this article, we examine the linkages between current account and energy prices, namely crude oil, coal and natural gas in Turkey the years between 2005 and 2016. Methodology- This article investigates how the changes in the energy prices affect the current account in Turkey. For this purpose, a Factor-Augmented Vector Auto Regression (FAVAR) model is used with economic data from the Turkish economy and world commodity price indexes to obtain empirical results for current account dynamics in the Turkish economy. The impact of various factors that include crude oil prices, coal prices, natural gas prices and fuel (Energy) index (Crude oil, natural gas, and coal price indices) data have been studied by obtaining impulse response functions. Findings- Natural gas prices gradually affect the current account. The impact is permanent after a period indicating a very limited elasticity. Oil prices have an immediate The current on the current account. Cycles, in the long run, indicate some degree of elasticity. The negative effect of coal price on the current account deficit occurs with a significant delay. Crude oil price index shocks graphs and fuel index, which includes oil price, coal price and natural gas, and crude oil price shocks graphs are very similar. Conclusion- In this comprehensive study, we can conclude that crude oil prices, coal prices, natural gas prices deteriorate current account balance. From all of the energy indices, the crude oil price is the most effective on the current account.