The endowment effect has gained dominance over the decades due to its ability to explain behavioral instincts portrayed by individuals when making decisions and its inconsistency with standard ...economic theories. It has been extensively applied in different fields of study, however its applicability to the housing market has been limited since its establishment. The study seeks to investigate whether the endowment effect exists in the housing market and whether the disclosure of information, increased affordability and agent evaluation significantly reduce the endowment effect. Using data obtained from a survey conducted between January and August 2022 in the Eastern Cape Province of South Africa, the study found that the disclosure of information eliminates the gap between buyers’ valuations and market values, while the gap between sellers’ valuations and market prices is reduced but not eliminated by information disclosure. The study has further concluded that increased affordability and agent evaluations significantly reduce the endowment effect in the housing market. Therefore, the study recommends that private and public entities should establish laws and regulations which promote the disclosure of information to reduce the gap between the willingness to pay (WTP) and the willingness to accept (WTA) that exists in the market.
•The paper empirically explores the link between individuals’ risky driving and risk-taking behavior in financial and labor-markets.•Using a large data set from Denmark, multivariate models are ...estimated.•We find significant correlation between risky driving and risk-taking in other aspects of life.•The correlation between risky driving and risk-taking in other aspects of life was also found to significantly vary between men and women.
The link between risk-taking behavior in various aspects of life has long been an area of debate among economists and psychologists. Using an extensive data set from Denmark, this study provides an empirical investigation of the link between risky driving and risk taking in other aspects of life, including risk-taking behavior in financial and labor-market decisions. Specifically, we establish significant positive correlations between individuals’ risk-taking behavior in car driving and their risk-taking behavior in financial and labor-market decisions. However, we find that the strength of these correlations vary significantly between genders, and across risk decisions. These correlations and their differences across genders get stronger when we construct more “homogenous” groups by restricting our sample to those individuals with at least some stock-market participation. Overall, the empirical results in this study suggest that risk-taking behavior in various aspects of life can be associated, and our results corroborate previous evidence on the link between individuals’ risk preferences across various aspects of life. This implies that individuals’ driving behavior, which is commonly unobservable, can be more fully understood using observable labor market and financial decisions of individuals.
This study examined economic market decisions among marginal maize farmers in Abuja, Nigeria: applications of double hurdle model and factor analysis. Specifically, the objectives were designed and ...stated to achieve the following; describe the socio-economic characteristics of marginal maize farmers, analyze the costs and returns of marginal maize production, determine the marginal productivities of maize farmers, estimate the factors influencing output of marginal maize production, evaluate factors influencing market decisions among marginal maize farmers, and identify the constraints facing marginal maize farmers. Multi-stage sampling technique was adopted and used. Primary data were collected from marginal maize producers through the use of well-structured and well-designed questionnaire. Data obtained were coded and analyzed using descriptive statistics, gross margin analysis, financial analysis, double-log functional model, marginal productivity, double-hurdle model, and principal component analysis. The results show that 60% of marginal maize farmers were less than 50 years of age. About 80% of farmers had less than 20 years experiences in maize farming. The mean farm size was 1.19 hectares of land. The gross margin and net farm income were 577,300 Naira and 525,300 Naira respectively. The gross margin ratio, operating ratio, and rate of return on investment were 0.82, 0.21, and 3.01 respectively. The gross margin ratio of 0.82 implies that for every one Naira invested in maize production by marginal farmers 82 kobo covered profits, taxes, interest, expenses, and depreciation. Marginal productivity analysis revealed that resources such as fertilizers, seeds, and land were under-utilized. Factors influencing output of maize production by marginal farmers were: farm size (<0.01) , family labour (P<0.05), hired labour (P<0.05), fertilizers (P<0.01), seed input (P<0.05), and volume of pesticide used (P<0.10). The double-hurdle model revealed that age (P<0.01), prices output of maize (P<0.05), education status (P<0.10), distant to nearby market (P<0.05) , access to extension agents (P<0.01) and access to credit facilities (P<0.05) were statistically and significant variables influencing marginal maize farmers decisions to market participation. The retained constraints facing marginal maize farmers explained 96.46% of variables included in the model. Factors analysis shows that retained constraints facing marginal maize farmers were; bad road infrastructures, lack of access to credit facilities, inadequate extension officers, poor storage facilities, lack of production inputs, and lack of new, improved technologies.
Asymmetric cost behavior has attracted the interest of many (empirical) researchers in the last years. Prior research determines several sources of this behavior such as resource adjustment costs, ...uncertainties and related beliefs, agency problems, and fixed costs. Empirical studies measure firms’ cost behavior using total firm costs and sales. In imperfect markets, firms react to changing market conditions by adapting output prices and quantities so that both total firm costs and sales are affected. However, changing output prices only directly affects sales and not costs. Based on an economic model, we identify market decisions (output quantity and pricing decisions) as an additional source of measured asymmetric cost behavior.
In Italy the women's participation is among the lowest in Europe. The female employment rate stands almost 13 percentage points below the EU average and 22 below the Lisbon target. One of the most ...important reasons is related to the characteristics of child care system. We analyze the characteristics of the child care system in Italy and its relationship to the labor market participation decision of mothers. The two decisions are jointly considered in a discrete choice framework, which also allows for simple forms of rationing. We go on to estimate a bivariate probit model of the child care and employment decisions and find evidence that rationing is an important factor in interpreting price effects on utilization rates and employment decisions.
Economic models of household behavior typically yield the prediction that increases in schooling levels and wage rates of married women lead to increases in their labor supply and reductions in ...fertility. In Italy, low labor market participation rates of married women are observed together with low birth rates. Our explanation involves the Italian institutional structure, particularly as reflected in rigidities and imperfections in the labor market and characteristics of the publicly-funded child care system. These rigidities tend to simultaneously increase the costs of having children and to discourage the labor market participation of married women. We analyze a model of labor supply and fertility, using panel data. The empirical results show that the availability of child care and part time work increase both the probability of working and having a child.
Reports that nearly half of Vietnam's roundwood imports come from illegal sources has drawn criticism from major consumer countries who have recently implemented timber legality regulations. These ...regulations, which include the U.S. Lacey Act and EU Timber Regulation, restrict the import of illegally harvested wood and are expected to have a direct impact on major wood-processing countries such as Vietnam and China. Surveys were conducted at trade shows in Ho Chi Minh City to assess how these regulations influence firms’ use of chain-of-custody certification, and impact their material sourcing and export market decisions. Vietnamese firms which sell to the United States and the European Union had higher awareness of timber legality regulations and were more likely to take steps to eliminate illegal products from their supply chain by sourcing raw materials from the U.S. and Canada or by increasing their use of certified wood. However, smaller firms were generally unaware of timber legality regulations and were much less likely to use certified products. Our findings suggest that the Vietnamese market has become segmented, with smaller firms using materials which are at a higher risk of containing illegal wood, and exporting to less regulated markets, such as China.
Czarnitzki and Stadtmann (2005) measure the interdependence of demand for investment advice (approximated by sales of investor magazines) and stock prices. They find strong evidence that confirms the ...presence of the disposition effect, i.e. the empirical observation that investors sell winners (too) early and abide losers (too) long. We reinvestigate their findings and confirm that the effect is very well present in the formerly analysed time frame, but clearly wears off afterward. As an explanation for the decline, we provide three lines of argumentation and show that disposition effect might depend on the shareholder structure, which is in line with the theory.
The aim of this paper is to provide new estimates of employment-output elasticities and assess the effect of structural and macroeocnomic policies on the employment-intensity of growth. Using an ...unbalanced panel of 167 countries over the period 1991 - 2009, the results suggest that structural policies aimed at increasing labor and product market flexibility and reducing government size have a significant and positive impact on employment elasticities. In addition, the results also suggest that in order to maximize the positive impact on the responsiveness of employment to economic activity, structural policies have to be complemented with macroeconomic policies aimed at increasing macroeconomic stability.
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