nep-tra New Economics Papers
on Transition Economics
Issue of 2017‒02‒12
ten papers chosen by
J. David Brown
United States Census Bureau

  1. Rural Land Transfer and Financial Impact: Evidence from China By Jiang, Meishan; Paudel, Krishna; Mi, Yunsheng
  2. Consumer Ethnocentrism of Moravian-Silesian Region: Comparison of CETSCALE Research 2013/17 By Michal Stoklasa
  3. The determinants of self-medication: Evidence from urban Vietnam By Hoai, Nguyen Trong; Dang, Thang
  4. Edukacja jako dobro publiczne - próba kwantyfikacji By Polcyn, Jan
  5. Energy Tariff Reform in Ukraine: Estimated Effects and Policy Options By Vasily Astrov; Leon Podkaminer
  6. Place and role of the Republic of Kazakhstan in the regulative mechanism “Eurasian Economic Union” By Alexey Tenetko
  7. External Monetary Shocks to Central and Eastern European Countries By Pierre LESUISSE
  8. Basis risk and welfare effect of weather index insurance for smallholders in China By Huo, Ran; Octavio, Ramirez
  9. The cyclical position of housing prices – a VECM approach for Hungary By Tamás Berki; Tibor Szendrei
  10. The Merit Order Effect of Czech Photovoltaic Plants By Petra Lunackova; Karel Janda; Jan Prusa

  1. By: Jiang, Meishan; Paudel, Krishna; Mi, Yunsheng
    Abstract: Land is the most valuable capital that farmers own. Land transfer can improve income of farmers through an optimal allocation of factors of production. The land transfer is not only transferring of the ownership but also transferring of the management rights. Chinese rural land system has its unique characteristics: ownership, contract, and management rights. Ownership rights are owned by collectives, farmers have contract management rights which are divided into management transfer rights and contract rights. Since 2008, farmers are provided with both land contract rights and land management transfer rights. This reform has provided farmers with financial opportunities to obtain revenues using different channels. Transferring-in land needs additional capital thereby causing demand effects, but transferring-out land allows farmers to earn income thereby causing supply effects. Land transfer also changes farmer’s agricultural investment and insurance behavior. This paper uses 2014 data from nine Chinese provinces to test farmers’ financial behavior change between land management rights transfer-out and transfer-in. Results from doubly-robust estimator with inverse probability weighting estimator, regression-adjustment, and propensity score matching indicate a significant difference of financial selection between land transfer-in farmers and land transfer-out farmers. Land market gives an unblocked transmission channel to rural financial market through mechanism innovation.
    Keywords: Key words: doubly-robust estimator, financial impact, land management right, land transfer-in, land transfer-out, International Development, Land Economics/Use, JEL Classification: C01, Q15,
    Date: 2017–02–18
  2. By: Michal Stoklasa (Department of Business Economics and Management, School of Business Administration, Silesian University)
    Abstract: The aim of this article is to measure the Consumer Ethnocentrism in the Moravian-Silesian region in the Czech Republic utilizing the CETSCALE. The research was focused on finding the strength of individual CETSCALE scales and the dependency of CE on demographic factors. Literature review describes the development of consumer ethnocentrism, and more importantly the CETSCALE, with some of its critics and constraints. Then the research methodology is presented. The research took place in the Moravian-Silesian Region and the sample consisted of 439 respondents. All the data is compared with our previous research from 2013, interpreted and the results are discussed. According to Cronbach's Alpha, the data is consistent and therefore reliable to explain CE. The main findings are the strength of the CE is as high as 66.3% of the overall possible score, which ranks this region amongst ones with the highest CE. In both, the 2013 and 2017 data, we can observe strong evidence of consumers in this region being highly ethnocentric, supporting local products and local producers, with negative perception of foreign products. Highly interesting are the results of the dependence of CE on the demographic factors. In 2014, only education and net monthly income were proven to have statistically significant impact on CE, in 2017 also the age categories.
    Keywords: consumer ethnocentrism, CETSCALE, demographic factors, foreign products, regional products
    JEL: M31
    Date: 2017–01–30
  3. By: Hoai, Nguyen Trong; Dang, Thang
    Abstract: This study examines the primary determinants of self-medica- tions among urban citizens in Ho Chi Minh City, Vietnam using survey data. Employing logistic models, the article finds that the probability of self-medication is positively associated with the respondents’ high school degree or vocational certificate, married status, and income while it is negatively related to employed status, the number of children, the geographical distance from home to the nearest hospital, doing exercise, and living in a central region. Meanwhile, using Poisson models the article finds that the frequency of self-medication is positively associated with the respondents’ high school and vocational, married, income, and chronic disease while the frequency of self-medica- tion is adversely related to male, employed, children number, distance, being close to health professional and central areas.
    Keywords: Ho Chi Minh City; self-medication; Vietnam
    JEL: I11 I18
    Date: 2017–01–23
  4. By: Polcyn, Jan
    Abstract: The analysis involved the construction of synthetic measures of quantity and quality of public goods in education and synthetic measures of economic and social development. The synthetic measures were built using the Hellwig method. Taxonomic analyses were performed with respect to the quantity, quality and effectiveness of public goods at the local level in Poland. An attempt was made to determine the education production function in the Polish context. Analysis techniques also included multivariate analysis of variance, regression models for quality and effectiveness of education and multilevel analysis of regression.Drawing conclusions based on the methodology adopted in this study is certainly burdened with error due to the considerable level of aggregation of measures used for illustrating the existing dependencies. However, it should be noted that the analysis covered all local government units (poviats) responsible for upper-secondary school education in Poland. In the Polish political system, the units fulfil the state’s function related to the provision of public goods in education. The efforts undertaken by researchers worldwide to find the ways to improve the quality and effectiveness of educational processes have focused on modelling the education production function. The attempts made in this study to implement the education production function in the Polish context have confirmed the results of global research in this field. However, models constructed on the basis of literature data were characterised by low explanatory power, which prompted the author to search for new methods that use the findings of research on education production function in order to identify the factors shaping the quality of public goods in education and effectiveness of education. Econometric analyses have pointed to the inefficiency of the teacher remuneration system. The expenditure on teacher remuneration was negatively correlated with the measure of quality. The negative impact of teacher remuneration on the synthetic measure of quality may be indicative of the incorrect explanatory properties of the analysed econometric models.
    Keywords: public goods, economics of education, educational funcion production
    JEL: A2 P36 P46
    Date: 2017
  5. By: Vasily Astrov (The Vienna Institute for International Economic Studies, wiiw); Leon Podkaminer (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Energy sector reforms have for a long time been viewed as one of the most important challenges facing Ukraine. The most visible manifestation of reforms so far has been the steep hikes in energy tariffs for households to ‘market’ levels, above all for natural gas and central heating. The magnitude of gas tariff hikes in Ukraine and the short time span over which they have been implemented have been unprecedented they rose nearly ten times within less than two and a half years. Partly due to this, between 2013 and 2015 residential gas consumption in Ukraine declined by about one third and will probably fall by another 9% in 2016 according to our estimations, essentially meaning sacrifice of households’ living standards. Because of the higher energy payments, private consumption of other (non-energy) items has suffered as well. This is a disturbing development the suppressed demand for non-energy consumer goods represents a clear social loss in an economy which has been suffering from a persistent inadequacy of aggregate demand. At the same time, our analysis demonstrates that the magnitude of gas tariff hikes implemented in Ukraine has been clearly excessive when viewed from the production (cost) side. Under plausible assumptions regarding the dynamics of domestic gas production, residential consumption and gas import prices in the years to come, we come to the conclusion that the state-owned gas monopolist Naftogaz (and, via higher tax revenues, the government at large) will be accruing rents to the tune of at least 2% of GDP – essentially at the expense of the population. The source of this rent is the fact that the wholesale price for largely domestically produced gas has been set now on par with imported gas, which – after the recent sharp reduction in gas demand – is now needed only in limited quantities to cover the households’ needs. To amend the situation in the short run, the government should either extend the scope of energy subsidies to poor households or, even better, roll back the energy tariffs. The latter task should be relatively easy to accomplish as long as Naftogaz remains state-owned. In the longer run, various measures may be contemplated to improve energy efficiency in the household sector. In this vein, the government may consider extending the scope of subsidies, e.g. by providing lower interest rates and a higher reimbursement rate for energy-efficient loans, especially for the purpose of installation of heating meters in residential buildings. Government subsidies along these lines would be crucial in solving the long-term structural problem of excessive energy consumption, and should enjoy priority over the short-term task of fiscal consolidation.
    Keywords: energy demand, energy prices, Almost Ideal Demand System (AIDS)
    JEL: D12 Q4
    Date: 2017–02
  6. By: Alexey Tenetko (Russian Presidential Academy of National Economy and Public Administration, Chelyabinsk branch)
    Abstract: The article analyzes the most characteristic features of integrative processes in the former Soviet Union area, considers the aspects of developing regulative mechanisms of Eurasian Union including peculiarities of the Republic of Kazakhstan participating in these processes.
    Keywords: Eurasian Economic Union, integrative unions, Kazakhstan, integration, international economic organizations
    JEL: F0
    Date: 2016–12
  7. By: Pierre LESUISSE
    Abstract: Few countries are part of the European Union but on the verge of the Euro-zone. This study aims at identifying the amplitude of the direct ECB monetary policy impact, i.e. the so-called international monetary spillovers, in Central and Eastern European countries (CEECs). The use of a panel-VAR method allows to deal with the small time span and endogeneity. We found that CEECs tend to significantly converge in monetary terms to the ECB standards. The direct impact on real variables remains relatively weak but contrary to the literature, is significant and in line with expectations. A persistent negative adjustment of GDP gives a quick glimpse of a robust reaction against monetary shock when the focus is made on the post-economic crisis period. The exchange rate regime plays a small but significant role in terms of magnitude. This increased interdependence is the result of macroeconomic reforms implemented during the last 25 years.
    Keywords: Monetary integration, External shocks, Panel VAR.
    JEL: F42 E52 C23
    Date: 2017–02
  8. By: Huo, Ran; Octavio, Ramirez
    Abstract: Recent years have witnessed a proliferation of weather-index insurance (WII) pilot programs in developing countries. However, the uptake of this novel insurance turns to be generally low despite that most WII programs are heavily subsidized by central and local government. Although basis risk is widely referred to as the most serious drawbacks to the effectiveness of index-based insurance, the impact of basis risk on the potential benefits of adopting weather index insurance is rarely documented. This paper designs a weather index contract for cotton in Shandong province and examines impact of two components of basis risk, covariate risk and idiosyncratic risk, separately. The findings of this paper underscores the importance of minimizing covariate risk in designing weather index insurance contracts and sheds lights on the different impacts of basis risk components on potential benefits of WII.
    Keywords: Weather index insurance, basis risk, China, Agricultural Finance,
    Date: 2017–02–08
  9. By: Tamás Berki (Magyar Nemzeti Bank (Central Bank of Hungary)); Tibor Szendrei (Magyar Nemzeti Bank (Central Bank of Hungary))
    Abstract: This paper aims to estimate a long-term equilibrium price level for the Hungarian housing market by identifying key underlying macroeconomic factors. For this, in line with the empirical literature, a vector error correction model is employed. The housing market price level is mapped by the newly established MNB housing price index. The results establish one stable cointegrating relationship between the housing prices and its longterm driving factors: average new housing loans, disposable income and housing stock. Credit channel plays a decisive role in determining equilibrium level of housing prices. Housing prices exhibit overshooting to various shocks potentially due to the protracted supply side adjustment. Due to the short sample size the estimated price gap might be underestimated in magnitude; nevertheless the fairly slow price adjustment coefficient ensures a persistent gap. Therefore, the sign of the estimated price gap is informative for policy makers from a macroprudential perspective.
    Keywords: housing prices, VECM, error correction, housing loans, cyclical position
    JEL: E44 R21 R31
    Date: 2017
  10. By: Petra Lunackova (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic); Karel Janda (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic; Department of Banking and Insurance, Faculty of Finance and Accounting, University of Economics, Namesti Winstona Churchilla 4, 13067 Prague, Czech Republic); Jan Prusa (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic)
    Abstract: We assess the impact of photovoltaic power plants on the electricity supply curve in the Czech Republic. The merit order effect is estimated as the elasticity of electricity spot price with respect to change in supply of electricity from renewable sources. Data for the Czech electricity spot market from 2010 to 2015 are analyzed as this is the period with the steepest increase in a renewable generation capacity. The effect is estimated separately for solar and other renewable sources. We find a significant difference between these two groups. Our results show that based on hourly, daily and weekly data energy produced by Czech solar power plants does not decrease electricity spot price, creating double cost to the end consumer. However, the merit Order effect based on averaged daily and weekly data is shown to exist for other renewable sources excluding solar (mainly water and wind). This contributes to the conclusion that the Czech renewables policy that prefers solar to other renewable sources may be considered as suboptimal.
    Keywords: energy subsidies; photovoltaic; renewables; merit order effect
    JEL: Q42 H23 M21
    Date: 2017–01

This nep-tra issue is ©2017 by J. David Brown. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.