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.

The Swedish electricity market has seen a surge in demand over the past fifty years. Since the deregulation in 1996, both the demand and supply side of the market has evolved into a competitive space for market actors. This has resulted in unique conditions, characterizing the nordic electricity market as being very much dependent on demand predictability. Demand flexibility has been investigated frequently, but as certain sector developments constantly affect electricity consumption, such as price volatility and green technology development, the price- and temperature elasticities should be revised continuously. Hourly-price contracts specifically, are on the rise in price area SE1, with a rise from 6 percent to 8 percent during the middle of 2023, meaning consumption patterns are of interest for the future as the trend continues. This has, to the authors’ knowledge, not been investigated within the municipality of Luleå, which is the basis for this master’s thesis. Two methodologies were adopted to investigate the elasticities, (1) an ordinary least squares (OLS) regression model and (2) two weighted least squares (WLS) regression models. The results indicate that the price elasticity of demand in Luleå is still very inelastic, with temperature bearing the main explanatory power for household electricity consumption patterns.

This thesis investigates the impact of alcohol taxes on the sales of wine and spirits in Sweden and Norway. The study uses panel data comprising quarterly sales figures from Systembolaget and Vinmonopolet between 2006 and 2023. The analysis employs econometric regression models with fixed effects to account for both observable and unobservable factors. The findings highlight the significant negative price elasticity of demand for alcohol, indicating that higher alcohol taxes reduce consumption of wine and spirits. Additionally, the results suggest that tax increases could be a viable strategy to mitigate the social and health issues associated with excessive alcohol consumption. This research provides valuable insights for policymakers aiming to design effective alcohol taxation policies to promote public health.

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.