Duncan Watson

A new perspective on the ripple effect in the UK housing market: Comovement, cyclical subsamples and alternative indices

An alternative perspective is provided on the existence of a ripple effect in the UK housing market. In contrast to previous studies, the analysis involves consideration of information on the changes in house prices to which the hypothesis of house price diffusion posited by the ripple effect relates, rather than their levels. In an examination of changes in house prices in London relative to other regions of the UK, directional forecasting methods are employed to establish the extent of the relationship between geographical proximity and comovement across the three month window provided by quarterly data. Consequently, the analysis provides a direct examination of the ripple effect which refers to changes in prices rather than the convergence of levels which has become a feature of the empirical literature. The literature is extended further by both the application of dating techniques to perform the analysis across cycles and phases of cycles (recovery and recessionary periods) in the UK housing market, and the use of data from two alternative house price index providers. Striking results in support of the presence of a ripple effect are noted, particularly for the less commonly considered Halifax price index where the most significant results for comovement with London are exhibited by its contiguous regions. In addition, the cyclical subsamples considered indicate comovement to be greater during upturns, rather than downturns in the market. This is consistent with previous research showing London to correct – that is, exhibit differing behaviour to other regions – during downturns.

Do Europeans View their Homes as Castles? Homeownership and Poverty Perception throughout Europe

The paper investigates the notion that homeownership affects poverty perception. This is investigated by utilising a logit model to analyse various characteristics of homeowners in 11 different European nations. Overall, the analysis fails to reject the notion that homeowners throughout Europe are less likely to perceive themselves as living in poverty, but no evidence is found that homeownership is more valued in nations with high owner-occupancy rates. However, support is found for the notion that homeownership is used as a form of security in countries that experience greater income inequality.

Comparisons in Gender Wage Differentials and Discrimination between Germany and the United Kingdom

Due to the lack of consistent data, direct and robust comparisons of cross-country labour markets have been virtually impossible. This study uses a new panel data series that controls for inconsistencies, thus overcoming this problem. This study estimates gender wage differentials and gender discrimination in the German and United Kingdom labour markets. Panel estimates are used to identify general wage differences between the two countries, with cross-sectional comparisons undertaken to identify changes that have occurred between 1991 and 1993, that are consistent with known labour market policies. It is found that gender wage differentials are greater in the UK than Germany with employer discrimination against females attributed with the majority of the difference in both countries.

A multinomial logit nondiscriminatory approach to estimating racial wage and occupational discrimination

This paper combines a technique to measure nondiscriminatory wage structures with a multinomial logit model to estimate both occupational racial discrimination and within-occupation racial wage underpayment and overpayment. Using a recent South African October Household Survey it is found that racial discrimination against blacks and in favour of whites still persists in the South African labour market, implying the persistence of white employer nepotism and/or white employee discrimination.

Influence costs and the reporting of skill deficiencies

There remains a conventional wisdom amongst economists that the UK suffers from a seriously under-skilled workforce and that an effective increase in the provision of training is key to economic regeneration. This article, while accepting the link between an underskilled workforce and economic performance, questions the reporting of skill shortages by personnel departments. This is based upon the notion that employees can spend considerable time attempting to influence decision-makers over and above their actual worth. We investigate whether personnel departments use concerns, and the ambiguous nature of, skill shortages to manipulate the reporting of skills at the organizational level.

Pension Confusion, Uncertainty and Trust in Scotland: An Empirical Analysis

In the context of the new automatic enrolment requirements for all eligible employees to make pension provision for their employees, and the importance of trust in pension provision, this article utilises data from the Scottish Social Attitudes Survey, which, in its 2005 wave, asked correspondents specific questions regarding pension provision. We integrate two different empirical approaches in order to achieve a more robust understanding of pension confusion in Scotland. We find that pension confusion is dominated by pension uncertainty and myopia, but these may be reduced for those working in the financial sector. We consider the implications of these findings for the relationship of trust between employers and their employees, as well as for trust in government pension policy more generally.

UK wage underpayment: implications for the minimum wage

Dynamic monopsony suggests that, due to labour market frictions, workers will be paid below their productivity. This paper uses the stochastic frontier technique to estimate the degree of this underpayment for UK employees. It finds evidence of significant underpayment. The estimates are used to examine whether the predictions of dynamic monopsony are empirically accurate. No conclusive evidence against this theoretical framework is found. The paper also investigates whether payment according to productivity is a sufficient condition for the elimination of the ‘working poor’ problem. Due to the existence of an unemployment barrier, it finds that the minimum wage is not an effective anti-poverty policy.

In search of the poor

Abstract Economists tend to adopt an empiricist approach to poverty, commonly calculating it as the proportion of the population that fall below some specified income threshold. This approach has been developed to take into account heterogeneous household needs by using income equivalence scales, but most other individual characteristics are totally ignored. This paper questions the relevance of this approach by considering the individual’s perception of poverty and how it relates to their income and other characteristics. Logit modelling techniques are used to investigate the determinants of poverty perception and to ascertain whether income is an important determinant, or whether other socio-economic factors dominate. The findings suggest that limiting the analysis to an income threshold will restrict our understanding of the nature of poverty and the problem it presents to our society.

New evidence on the importance of gender and asymmetry in the crime-unemployment relationship

The literature examining the crime–unemployment relationship is vast. Three recent developments in the analysis of this relationship are combined with a novel empirical method to explore the importance of gender effects and asymmetric adjustment when analysing the impact of unemployment upon criminal activity. Using data for the United States of America, a number of interesting results are obtained. The key finding concerns the importance of gender, with opportunity effects in criminal activity detected when considering female, but not male, unemployment. Further examination shows findings to support theories associated with ‘victimization’ and worsening socio-economic conditions, rather than those emphasizing ‘latchkey care’ effects and an absence of guardianship. Consideration of motivation effects provides further evidence of significant asymmetries in the response of crime to unemployment.

The effect of building society demutualisation on levels of efficiency at large UK commercial banks

Purpose - This paper aims to investigate the effect of UK building society demutualisation on levels of efficiency at the largest five commercial banks in the UK. Design/methodology/approach - This research utilises data envelopment analysis (DEA) within a rarely adopted windows framework to analyse efficiency. The study also incorporates a novel risk proxy in the profit-orientated approach to determine DEA input/output which proves a useful innovation to the methodology. Findings - The overall aggregate results suggest that converting building societies outperformed their bank counterparts in all areas of efficiency and that scale efficiency dominates pure technical efficiency. Interestingly, the results also indicate that the level at which institutions continue to find economies of scale had increased when compared to previous research. Originality/value - The period of building society demutualisation offers an empirical opportunity to examine deregulation upon market participants. It is felt that this study offers academics, regulators and participants within the financial services environment an insight into the efficiency impact of deregulation.