Are Consumers Forward-looking? Evidence from Used iPhones
This study examines the impact of planned obsolescence – the introduction of new models to make existing models obsolete – on secondary markets for mobile phones. Using data of over 320,000 used iPhones listings on Thailand’s largest online marketplace, we document that iPhone prices decrease with age, around 2.8 to 3.2 percent for each passing month. We find no evidence that the price decline accelerates after launches of new models (i.e. obsolescence), lending support to the view that consumer in durable goods markets are rational and forward-looking.
Assessing the Importance of Taxation on FDI: Evidence from South-East Asian Developing Countries
This study examines the influence of taxation on FDI using data from South-East Asia. It employs the quantile regression approach with fixed effects that provides a comprehensive view of the tax sensitivity across the FDI distribution. Estimates confirm the significantly negative impact of the bilateral effective average tax rate but its effect is heterogeneous across the distribution. This stresses the importance of understanding the effect of taxation across the distribution rather than only at the mean. Also, the economic significance of the tax is relatively smaller than that of other fundamental factors such as labor quality and governance.
Environmental Efforts and Firm Performance
In this paper, we test the prediction that environmental efforts, presenting one dimension of corporate social responsibility, are positively related to firm performance. We analyze a panel sample of non-financial firms in the Netherlands over the period 2001–2014 using two approaches: ordinary least squares regressions and two-stage least squares regressions. Our two-stage least squares regressions show that firms with higher degrees of environmental efforts have better firm performance, measured as return on assets, but have poorer firm performance, measured as return on sales. However, this relationship disappears when firm performance is measured as return on equity or stock return. Our analysis further reveals that better firm performance does not necessarily lead to a disclosure of a firm’s environmental efforts. We find that larger firms are more inclined to report the environmental efforts than smaller firms. Neither prior firm performance nor variation in firm performance moderates the effect of environmental efforts on firm performance.
Impact of Lower Rated Journals on Economists’ Judgments of Publication Lists: Evidence from a Survey Experiment
Publications in leading journals are widely known to have a positive impact on economists’ judgments of the value of authors’ contributions to the literature and on their professional reputations. Very little attention has been given, however, to the impacts of the addition of publications in lower rated journals on such judgments. In our main tests, we asked sub-samples of economist in 44 universities throughout the world to rate either a publication list with only higher rated journals or a list with all of these but with additional publications in nearly as many respected but lower rated journals. Our primary finding was that the inclusion of lower rated journals had a statistically significant negative impact on these economists’ judgments of the value of the author’s contribution. To the extent that such judgments may influence research and publication strategies our findings imply negative implications on social welfare.
The Economics of Altruism – The Old, the Rich, the Female
This study examines whether certain observed characteristics are associated people’s altruistic feelings and behaviors. The paper utilizes a National Mental Health Survey that gathered questions about respondents’ self-reported altruism along with their demographic, labor force, and income information. The empirical results reveal that (1) older people are more altruistic; (2) higher income people are more altruistic; and (3) women are more altruistic. The results are robust once the potential endogeneity problem of the income variable is eliminated by the use of the instrumental variable estimation method.
Thailand’s Household Debt through the Lens of Credit Bureau Data: Debt and Delinquency
This paper uses loan-level data from the National Credit Bureau to study household debt in Thailand. The wide coverage and the granularity of the data allow us to analyze prevalence, intensity, and distribution of debt and delinquency by loan product, lender, and borrower. We show that there are tremendous heterogeneities in debt and delinquency across these attributes. Overall, credit access in Thailand appears moderate and limited for housing loans. Thais begin to have debt earlier in their lives and hold debt until very old. Household debt is largely concentrated and plagued with high debt intensity and delinquency prevalence, especially among the young working age population, implying a potential increase in the vulnerability of the financial system and prolonged sluggish domestic spending. Our findings have important implications for policy design and targeting.
Fiscal Stimulus and Household Debt: Evidence from Thailand’s First-Car Buyer Tax Rebate
This paper studies the impacts of Thailand’s 2011-2012 first-car tax rebate scheme on household debt using the account-level loan data from National Credit Bureau. While the literature mostly concentrates on the macroeconomic effects of such stimulus, this study focuses on the effects on individuals who borrow to finance their durable-goods purchases. We show that the program led to higher delinquency on loans and crowded out other loan originations. Our findings are consistent with the demand-shifting mechanism—the rebates encouraged participants to purchase their cars very prematurely. The results were more adverse for passenger car buyers than for truck buyers. We also find local spillover effects of the program on non-auto loans and on individuals not participating in the program.
Intensive and Extensive Margins of Labour Supply in Thailand: Decomposing the Pattern of Work Behaviours
The paper highlights the important differences between the extensive margins (participation) and the intensive margins (hours-of-work) of labour supply, in the case of Thailand. We use Thailand’s Labour Force Survey to explore the evolution of labour supply at both margins over the past three decades. We show that Thailand’s extensive margins of labour supply follow the conventional life-cycle pattern of an inverted U-shape along the age distribution. However, for the intensive margins, occupation types and education levels play significant roles in dictating the shape of hours-of-work along the life-cycle. We employ a pseudo-cohort analysis to allow us to track the same representative age-gender sample across their life time. While we find that men supply more mean hours per capita than women, we do not find much marriage premium on the intensive margin among those who worked. Marriage premium is highly noticeable along the extensive margin. At all ages, women have smaller extensive margins. Female workforce also reduce the margins more strongly when they reach older ages than men. In our statistical exercise combining a decomposition approach with forecasting, we find that a policy targeting raising participation rates work more effective than a policy on intensive margins, in increasing the total hours-of-work of the working age population.
Welfare Analysis of the Universal Health Care Program in Thailand
I estimate and decompose the welfare benefit of Thailand’s universal health care policy, also known as the 30 Baht program. The total welfare impact of the 30 Baht program is defined as the amount of consumption that an enrollee would need to give up that would leave her at the same expected utility as without the 30 Baht program. I find that the total welfare benefit is approximately 75 cents per one dollar of government spending. The main source of the welfare effect can be attributed to improved consumption smoothing rather than increases in the consumption level. Using difference in differences method, I find that the effect of the 30 Baht program on income is signicantly positive, while the effect on consumption is slightly negative but not significant. This implies that the 30 Baht program has a positive impact on savings and future consumption, rather than current consumption.
Collectivism and Connected Lending
National culture may affect the prevalence of connected lending. This study aimed to assess the effects of national culture, especially collectivism, on the need for special connections with banks, which is a measure of connected lending. The researcher obtained national culture data from both Hofstede’s work and the GLOBE project. Using data covering more than 5000 firms in 51 countries, this study found that GLOBE Institutional Collectivism decreases the need for special connections, while Hofstede Collectivism and GLOBE In-Group Collectivism do not. This suggests that the need for special connections with banks is different from the corruption of bank officials.
Multi-Firm Entrepreneurship and Financial Frictions
An entrepreneur’s ability to save is crucial to mitigating aggregate productivity losses caused by underdevelopedfinancial markets. Previous studies of this mechanism assume that an entrepreneur’s savings come from income generated by only onefirm. In contrast, this paper uses a large, novel dataset from Thailand and, using a legal mandate that Thai households have unique surnames, documents a large share of entrepreneurs with income from multiplefirms. They can therefore accumulate wealth from various sources, allowingfinancially constrained firms that are owned by multi-firm entrepreneurs to grow faster and survive longer than those owned by single-firm entrepreneurs. Motivated by these facts, I develop a tractable model of multi-firm entrepreneurship in the presence of financial frictions and study its impact on aggregate productivity and the allocation of capital. After calibrating to match the salient features of the Thai data, I find that the aggregate productivity loss due tofinancial frictions would rise from 7% to 21% if entrepreneurs could not own multiple firms.
Monetary Policy, the Financial Cycle and Ultra-low Interest Rates
Do the prevailing unusually and persistently low real interest rates reflect a decline in the natural rate of interest as commonly thought? We argue that this is only part of the story. The critical role of financial factors in influencing medium-term economic fluctuations must also be taken into account. Doing so for the United States yields estimates of the natural rate that are higher and, at least since 2000, decline by less. As a result, policy rates have been persistently and systematically below this measure. Moreover, we find that monetary policy, through the financial cycle, has a long-lasting impact on output and, by implication, on real interest rates. Therefore, a narrative that attributes the decline in real rates primarily to an exogenous fall in the natural rate is incomplete. The influence of monetary and financial factors should not be ignored. Exploiting these results, an illustrative counterfactual experiment suggests that a monetary policy rule that takes financial developments systematically into account during both good and bad times could help dampen the financial cycle, leading to higher output even in the long run.
More Than Words: A Textual Analysis of Monetary Policy Communication
This paper employs various tools from computational linguistics to monetary policy statements to gain exploratory insights into the nature of central bank communication. The sample was taken from a wide array of central banks, covering major central banks and others under the inflation-targeting (IT) regime, from 2000 to 2015. Three major aspects of communication were examined in this study, namely (i) readability – the ease with which a reader can understand a written text, (ii) topics – the key themes that are discussed in the policy statements, and (iii) tones – how positive/negative the outlook is in the central bank’s language assessment.
Glancing at Labour Market Mismatch with User-generated Internet Data
In this project, we will conduct a series of research exercise to demonstrate how selected web-based data sources can provide additional insights for labour market analysis, beyond what conventional government-conducted surveys can offer. We exploit web-based data from selected job-boards and resume postings under Thai domain to provide some insights on job vacancy statistics, labour market mismatch between required skill vis-a-vis attained skill at occupation level and the gap between reservation wage and productivity. We also test for potential impacts of the 300-baht minimum wage increase in 2013 and find negative relationship with our measure of province-level labour market tightness. We also use this dataset to investigate labour market discriminations using separate perspective of firms and job seekers.
Economic Fundamentals and Spill-over among Asian Term Structures
This paper estimates affine term structure models of government bonds in selected 5 emerging countries during 2002-2015 periods. It aims to study the relationship between sovereign bond markets and the real economy. The analysis confirms evidences earlier that macroeconomic variables help explaining yield curve and term premium dynamics. For short-term bonds, yield’s responses to shocks are mostly carried by policy channel. For long-term bonds, responses are mostly from term premium. Furthermore, there are external factors that could generate yields co-movement in some emerging-economy countries. Our findings therefore suggest that portfolio diversification would benefit investors who allocate their assets globally. Central banks, however, have to face with difficulties in managing bond market as they have to oversee risk factors affecting investors’ risk perception and causing cross-country spill-over effects.