E. A. Selvanathan

The Demand for Transport and Communication in the United Kingdom and Australia

This paper investigates the substitution/complementarity relationship among the demands for private transport, public transport and communication in the United Kingdom and Australia for the period 1960-1986. We use the Rotterdam Demand System for the analysis. The results identify major similarities and some important differences in consumption of these goods in the two countries. Further, they show that in both countries (a) private transport is a luxury and public transport is a necessity; (b) the demand for all three goods are price inelastic and (c) public transport, private transport and communications are pair-wise substitutes.

Economic and demographic factors in Australian alcohol demand

In the last two decades, total (pure) alcohol consumption in Australia has declined by about 31% and currently it is at the same level as it was in the 1950s. Australians consumed about 10 litres of pure alcohol per person in 1982 and now the level has declined to about 7 litres of pure alcohol per person. During the last four decades, per capita beer consumption has reached a peak of 140 litres in 1975 and has fallen to a low 93 litres in 1999; wine consumption has increased four-fold while spirits consumption has stayed around the same level. This paper, using the Australian consumption data for beer, wine and spirits for the period 1956–1999, aims to explain the change in consumption patterns of beer, wine and spirits by considering the effects due to changes in economic and demographic factors. The results show that while income and prices significantly influence the consumption patterns of alcohol, the increasing Australian elderly population also plays an important role.

The effect of the price of gold on its production: a time-series analysis

Abstract Production of gold in Australia has grown strongly in recent years. Australia is ranked the worlds third largest gold producer, only South Africa and the US produce more than Australia. Most of the Australian gold production comes from one of its states, Western Australia. In this paper, we use recent developments in econometric time series analysis to present an analysis of gold production and prices during the period 1948–1994. The results show that if the price of gold (relative to costs) increases by 10% and the price (in levels) remain the same for the next 5 years, then in the first year gold production will rise by 0.3%; in the second year by 2.2%; in the third year by 7.4%; in the fourth year by 8.9% and in the fifth year by 10.7%.

International consumption comparisons : OECD versus LDC

This book presents an analysis of consumption patterns in the OECD (rich) and LDC (poor) countries using recent data (1950–1998) and econometric methodology for a number of broadly aggregated consumer goods. The income elasticity estimates for the 46 countries and 9 commodity groups are tabulated. The reliability of these elasticity estimates, and also the demand theory hypotheses, are investigated using simulation techniques.

Causality between foreign direct investment and tourism: empirical evidence from India.

This paper investigates the causal link between foreign direct investment and tourism in India by employing the Granger causality test under a VAR framework. A one-way causality link is found from foreign direct investment to tourism in India. This evidence once again adds to the need for appropriate policies and plans to further expand and develop tourism given that FDI flow into India is expected to be strong in the coming years, bringing along a demand for tourism as well.

The Economic Theory of the Consumer

The demand function for a single commodity explains how changes in income and the prices of all goods affect the quantity consumed of that commodity. The objective of consumption theory is to derive testable hypotheses about the demand functions. These hypotheses take the form of theoretical restrictions on the demand functions, for example, demand homogeneity, Slutsky symmetry, etc. These restrictions come from the utility-maximizing theory of consumer behaviour. Consequently, the objective of this chapter is to set out the theory of the utility-maximizing consumer and the derivation of the demand equations. There are a number of ways of deriving demand equations, including (i) the direct specification of the functional form of the demand equations; (ii) the specification of the direct utility function; (iii) the specification of the indirect utility function; (iv) the specification of the cost function; and (v) the application of the differential approach.

Henri Theil's Contributions to Demand Analysis

Henri Theil has made numerous, influential contributions to economics and econometrics. These include the theory of economic policy, information theory, forecasting, econometric methodology and demand analysis, to name just a few areas of major contributions. There is no question that Theil’s work has a style all of its own: it is characterized by insight, ingenuity, elegance and an almost unique combination of theory and measurement. Most (if not all) of his research in econometric methodology, for instance, has applications centrally in mind. A good example is the 2SLS estimator. The early work of the Cowles Commission on the estimation of simultaneous equation systems represented a major watershed in econometrics. However, the estimation methods they proposed were demanding to the point of being almost impractical given the state of computing techniques at that time. Theil solved this problem in his usual style by devising the 2SLS estimator which involves simply running two LS regressions.

On the profitability of commercial banks: the Sri Lankan case

ABSTRACT This study determines the factors affecting the profitability of licensed commercial banks (LCBs) in Sri Lanka, including the effect of the prolonged conflict which ended in 2009. Using an error correction model together with data for the period 2006–2014 of 10 major LCBs, the results reveal that, in the short run, capital and liquidity have a positive effect on bank profitability and default loans, interest margin (IM), operating cost, and interest rates (IRs) have a negative effect. In the long run, bank profitability is significantly impacted by default loans, IM, real GDP, inflation, IRs, capital, operating cost, and conflict. The ending of the prolonged conflict has significantly contributed to improved bank performance.

Determinants of the Bangladesh garment exports in the post-MFA environment

ABSTRACT The garment industry is considered as one of the driving forces of socio-economic development of Bangladesh due to its significant contribution to the countrys exports, employment generation, and poverty alleviation. This study investigates the determinants of the Bangladesh garment exports in the post Multi-Fibre Arrangement (MFA) environment. Using data from World Bank Enterprise Surveys and other information from secondary sources, this study finds that labour cost, labour productivity, firm size, availability of domestic input materials, and firm location in a port city are the major determinants of Bangladesh garment exports. In addition, the analysis finds that cheap labour, firm size, product and market diversification, preferential market access, and proactive policies by the Bangladesh government have also helped the Bangladesh garment industry to become successful during the post-MFA period.

Meat and fish consumption patterns in Saudi Arabia

ABSTRACT This study analyses the demand for meat (beef, chicken and lamb) and fish in Saudi Arabia in a system-wide framework using data for the period 1985–2010. A preliminary data analysis reveals that, in Saudi Arabia, the relative consumption of beef, chicken and fish has a positive growth, while lamb has a negative growth. The average relative price growth rates of beef, chicken and fish are negative, while that of lamb is positive. The expenditure shares of beef, chicken and fish have increased while that of lamb has fallen. The estimation results of the demand system reveal that there is an autonomous trend out of lamb into beef, chicken and fish. The implied income elasticities indicate that beef, lamb and fish are considered to be luxuries, while chicken is a necessity. The demand for all meat products and fish are price inelastic. These elasticities are key inputs for policy analysts in terms of devising policies in relation to meat production, meat imports, taxation and food security issues in Saudi Arabia. The usefulness of the implied elasticities is demonstrated by simulating the consumption of beef, chicken, lamb and fish under various policy scenarios.