The question for this thesis is whether the static and the dynamic theory of international trade stability holds in reality in Bangladesh.

This dissertation analyzes the sources of price dispersion due to the price discrimination in the U.S. airline industry. Using the multi-stage budgeting approach with the almost ideal demand system (AIDS) specification, we estimate demand for air travel at the airline level, and empirically decompose an airline’s own price elasticity into cross-price elasticity vis-à-vis other airlines and an industry elasticity. Conceptually, cross-price elasticity measures the responsiveness of quantity demanded of airline service offered by an airline to a unilateral change in the firm’s own price with total expenditures given, whereas the industry elasticity measures the responsiveness of total quantity of airline travel demanded to a change in the overall price of air travel. Then, we investigate the determinants of price dispersion induced by discriminatory pricing across airline routes. Our results show that cross-price elasticity of demand for air travel, reflecting competitive-type discrimination, is the key factor affecting price dispersion in the airline industry. This result is consistent with the earlier findings of Borenstein and Rose (1994), but is based on a direct test of the underlying theory of Holmes (1989).

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As the share of renewable and intermittent energy sources grow and as society becomes more electrified, electricity price volatility becomes one of the most pressing issues. The flexibility of household demand, when faced with price shocks, determines how exposed they will be to price volatility, making the estimation of their short-run price elasticity highly relevant for policymakers. The elasticity was estimated for the hourly demand, the daily demand, and the weekly demand using a difference in difference setup. All estimated elasticities were between -0.10 and -0.19, with the elasticity of hourly demand being the smallest and the elasticity of weekly demand being largest. This implies that household demand is very inelastic but grows in the longer run, even when the longer run is rather short. The elasticity differs between electricity pricing areas. The largest estimated elasticity was in the area which experienced the greatest price shock.

As many variable pricing projects are still in the implementation stage, long-run driver responses to the variable tolls are largely unknown. This research examined the long-run changes in driver behavior in an existing variable pricing project in Lee County, Florida. Using empirical evidence, it was found that over time the price elasticities of demand on the Lee County toll bridges have decreased from -0.42 to - 0.11 (Midpoint Memorial Bridge) and from -0.31 to -0.06 (Cape Coral Bridge) during the early morning discount period. The elasticities have decreased, but to a lesser extent, during the late morning and early afternoon discount periods. A discount period volume spreading ratio was also developed to analyze these changes. The results from this analysis confirmed the elasticity results. In addition to the empirical analysis of travel patterns discussed above, a telephone survey of drivers was conducted. The survey results indicated that certain driver characteristics such as higher frequency of trips, commute trip purpose, full-time employment status, more people in the household, higher education, and age between 25-34 years, were all indicators that the participant may increase his or her variable pricing usage over time. Other characteristics, including being retired and having a household income less than $16,000, were indicators that the driver may not increase variable pricing participation. Binary logit and semiparametric models were also developed to examine socio-economic and commute characteristics that may influence a driver increasing his or her participation in a variable pricing program. The results from these two variable toll bridges in Lee County indicated a decrease in variable toll price elasticity over time. However, these results may not be typical for variable pricing projects. Factors such as alternative routes, different traveler demographics, traffic congestion levels, and size of the toll discount may influence the results obtained from other variable pricing projects. However, the methodology developed in this research can be applied to other projects in order to determine those toll price elasticities of demand.

Due to health problems and the negative externalities associated with cigarette consumption, many governments try to discourage cigarette consumption by increasing its price through taxation. However, cigarette, like the other addictive goods, is viewed as that it is not sensitive to demand rules and the market forces. This study analyses the effect of price increase on cigarette consumption. We used Swedish time series data from 1970 to 2010. Our results reveal that though cigarette is addictive substance its demand is sensitive to changes in the price. Estimates from this study indicate short-run price-elasticity of -0.29 and the long run price elasticity of -0.47.

This thesis explores the cross-price elasticity of rail and bus usage with gasoline prices. This is done to see how the short-run cross price elasticity has changed and to see if the same long-run relationship can be seen in the long run as previous pooled models. It is done in order to investigate whether policies such as higher gasoline taxes may make consumers move from car usage towards public transportation. Historically the cross-price elasticity has been around 0.2 with a higher elasticity for rail than for buses. The relationship also seemed to be greater in the long run than short run. Investigating this long run cross price elasticity for modes of public transportation separately would give greater insight into how consumers behave when gasoline prices shift. An ARDL model was therefore used to investigate the long run coefficients of gasoline prices with rail usage and bus usage separately as well as the short run coefficients. No cointegration could be found in this model for the two different modes. The results of the short-run cross-price elasticity seemed to be greater for buses as a direct effect, while it was greater at first lag for rail usage. The cross-price elasticity was lower for the period than previous studies, indicating that the cross-price elasticity may have decreased. The reasons for this cannot be concluded, but theory may explain these differences by the availability in substitutes for the periods, or lower levels of gasoline prices in recent years. This thesis therefore suggests further studies that investigate how usage of rail affects the usage of buses in metropolitan areas, and how the attributes of a modes of public transportation may change the usage of another form of public transportation.

This thesis analyzes regulation, prescription and prohibition of drugs in condition of their mutual substitution with other addictive substances in the Czech Republic; thesis investigates prices' and cross-prices' elasticities of substances and their markets. Comparison is made between regulated legal markets of alcoholic beverages and cigarettes, non-prohibitively regulated markets of pharmaceuticals and prohibited markets of illegal drugs. The thesis concludes that the demand for drugs is not price elastic. The demand for drugs is price inelastic but not perfectly price inelastic, as can be deduced based on the concept of A Theory of Rational Addiction developed by Gary S. Becker. The price of drugs, therefore, to some extent affects consumption. This opens the room to influence demand through pricing mechanism. The thesis also verifies The Theory of Economic Regulation developed by George J. Stigler and confirms that due to some substitution relationships between addictive substances it is possible speculate about the interests of producers of alcoholic beverages, cigarettes and pharmaceuticals for prohibition of drugs. Interests of producers of alcoholic beverages and cigarettes confirm their mutually complementary linkages.

The objective of this study is to estimate advertising effects on international tourismdemand for the leading Swedish winter destination, Åre. The increasing share of foreigninbound tourists in this destination region creates a strong interest by shareholders toidentify the factors responsible for this trend. According to traditional micro-economictheory, economic factors, such as income and price, are considered as main determinantsfor tourism demand (Song and Witt 2000). However, according to advertising theories(Comanor and Wilson, 1974) and previous tourism research (Bhagwat and Debruine, 2008;Divisekera and Kulendran, 2006), this study additionally focuses on the brand awarenessof Åre as perceived by international tourists. More concretely, advertising theoriesdistinguish between the brand and the information function of advertising (Nelson, 1974).The former function follows the idea that advertising increases the level of productdifferentiation to build up a base of loyal customers. By contrast, the information functionimplies that advertising primarily provides information about products in order to increasethe market transparency. Accordingly, in order to estimate the impact of advertisingexpenditures for off- and online channels as well as promotional activities, furtherexplanatory variables, e.g. mega events, are considered in this study (Salman, 2003; Songet al., 2010). By applying ordinary least square (OLS) methods, demand elasticitycoefficients are estimated for each of the sending countries Norway, Finland, Russia,Denmark and the UK. Results show that advertising is the main significant driver oftourism demand from the UK, Russia and Finland, while a comparably weak advertisingleverage can be shown for Denmark and Norway. Interestingly, in contrast to microeconomictheories tested in previous research, income and tourism price levels reveal asbeing less significant drivers for demand in all analysed tourism markets. In turn, theresults provide evidence that the increased usage of online channels most significantlyaffects consumers’ buying behaviour. Finally, with respect to brand image perception,results reveal that the destination of Åre is perceived as a brand by tourists from Denmark.Moreover, for customers from the countries Norway and Finland, Åre indicates a weakbrand perception, while tourists from Russia and the UK don’t perceive Åre as a brand atall. The results gained by this research conducted at the level of the tourism destinationprovide useful hints about the factors influencing travel behaviour of tourists from maininternational markets. The study supports destination managers to appropriately adjustmarketing campaigns according to the predominant level of brand perception in respectivesending countries. / KK-Foundation project ‘Engineering the Knowledge Destination’ (no. 20100260; Stockholm, Sweden).

This study investigated the demand patterns of poor households during a period of rising prices. Focus was on three main constructs namely the poor, rising prices and the demand patterns. The study was on Bophelong, a township in South Africa. This study was conducted from an empirical, quantitative approach which was preceded by a literature review. The main objective of conducting the literature review was to provide a theoretical framework for questionnaire design and empirical work. Cross sectional data was collected at Bophelong households. On completion of the survey, the poor were selected from the non-poor by means of a poverty line. The poor were further divided into two categories, namely moderately poor and the very poor. Moderately poor households were categorised by an income ranging 50% to 99% inclusively of their household poverty line. The very poor households were categorised by an income in the range of 0 to 49% inclusively of their poverty line. Using the above division, the total poverty rate was 56% of the total sample, 26% being moderately poor and 30% very poor. The poverty gap ratio for all the poor in the sample was 0.48, meaning that on average, the poor needed 48% of their current income to reach their poverty line. This ratio was 0.29 for the moderately poor households and 0.69 for the very poor households. A logistic regression done on the determinants of poverty in Bophelong showed that household size, age of the household head, monthly household income and the employment status of the household head were significant in determining poverty. The monthly average household income in Bophelong was R2 910. For the moderately poor households it was R1 641 for the and R932 for the very poor households. Household size was 3.96 for the whole sample size, 2.97 for the non-poor households, 4.2 for the moderately poor households and 4.7 for the very poor households. The study revealed that demand patterns of the poor differ from those of the non-poor. In addition the moderately poor households‟ demand patterns differ from the very poor An analysis of the poor‟s demand patterns during rising prices: the case of Bophelong household. The greatest part of income of the poor is spent on basic food stuffs. The very poor spent more than half of their income (53%) on food. The study indicated that bread is a giffen good only to the very poor households where quantity demanded moves in the same direction with price. In the non-poor households, bread is regarded inferior. A commodity can be overly a necessity, but the degree of necessity differs with a households‟ economic status. In some cases, a commodity was a necessity in the very poor households but a luxury in the non-poor. The way households substitute one good for another depends on their income levels. In conclusion, the study recommends that for poverty alleviation policies to effectively target the very poor in reducing malnutrition and hunger, these very poor should be studied separetely from the poor households. This is because households of different poverty levels face different challenges. A more detailed and deeper study relating to the demand structure of the poor is recommended. There is also a need to explore the survival means of the poor as to direct policy actions aimed at alleviating poverty among the poor in general. / Thesis (PhD (Economics))--North-West University, Vaal Triangle Campus, 2013