Template-Type: ReDIF-Article 1.0 Author-Name: Ma. Joy Abrenica Author-Workplace-Name: UP School of Economics Author-Name: Rolando Danao Author-Workplace-Name: UP School of Economics Author-Name: Ma. Nimfa Mendoza Author-Workplace-Name: UP School of Economics Title: Market competition in the downstream oil industry: is there evidence of price asymmetry? Abstract: Casual observation that domestic gasoline prices increase immediately and more than proportionately when global prices rise, while they tend to decrease slowly and less than proportionately when global prices decline, has fuelled speculation that the major oil industry players are engaging in collusion. This perception has persisted despite three independent probes into the state of market competition in the industry none of which found direct evidence of collusion. However, the third inquiry has found some evidence of price asymmetry in a recent period. Applying a standard price asymmetry model with error correction term on weekly price data, this study finds no evidence of price asymmetry. Instead, local pump prices are confirmed to be tracking global prices symmetrically and with only a weekÕs lag. This finding is robust for different fuel types. Classification-JEL: L11, L41 Keywords: collusion, price asymmetry, downstream oil industry Journal: Philippine Review of Economics Pages: 1-20 Volume: 51 Issue: 2 Year: 2014 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/907/807 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:51:y:2014:i:2:p:1-20 Template-Type: ReDIF-Article 1.0 Author-Name: Jonna P. Estudillo Author-Workplace-Name: National Graduate Institute for Policy Studies Author-Name: Yukichi Mano Author-Workplace-Name: Hitotsubashi University Author-Name: Yasuyuki Sawada Author-Workplace-Name: University of Tokyo Author-Name: Keijiro Otsuka Author-Workplace-Name: National Graduate Institute for Policy Studies Title: Poor parents, rich children: the role of schooling, nonfarm work, and migration in rural Philippines Abstract: This paper explores how migration to local towns, big cities, and overseas has halted the transmission of poverty from parents to children in rural Philippines. ParentsÕ income has come mainly from agricultural sources while childrenÕs income has come largely from nonfarm sources. Initially, poverty is higher among the landless households. Children from poor landless households are able to find their way out of poverty by acquiring more education, participating in rural nonfarm labor market, and migrating to big cities, local towns, and overseas. Migrant children have higher total income coming mainly from nonfarm income, which is significantly affected by education. In brief, this study demonstrates the rise in economic importance of education and the decline in economic importance of farmland in explaining economic mobility. Classification-JEL: I30, I24, O17, Q15 Keywords: intergenerational transmission, poverty, inequality, nonfarm labor market, migration, Philippines Journal: Philippine Review of Economics Pages: 21-46 Volume: 51 Issue: 2 Year: 2014 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/908/808 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:51:y:2014:i:2:p:21-46 Template-Type: ReDIF-Article 1.0 Author-Name: Jeffrey G. Williamson Author-Workplace-Name: University of Wisconsin and Harvard University, UP School of Economics Author-Name: Emmanuel S. de Dios Author-Workplace-Name: UP School of Economics Title: Has the Philippines forever lost its chance at industrialization? Abstract: After 1870, and long before the rise of the Asian Tigers and the group of emerging economies of Brazil, Russia, India, China, and South Africa, industrial output grew fast enough in the poor periphery to achieve unconditional convergence on the industrial leaders. The Philippines was part of the group of countries that caught up during the interwar and post-war import-substitution-industrialization years. It began to deviate from the pack after the 1970s, however, leaving the group in 1982, never to re-enter it. This paper examines the possible causes of what appears to have been a unique event. These cover political instability, institutional weaknesses, liberalization policy, labor emigration, and Dutch disease. Taken together, these forces created a Òperfect de-industrializing stormÓ, It seems likely that the Philippines has forever lost its chance at industrialization. Classification-JEL: F1, N7, O2 Keywords: industrial development, industrial structure, growth, deviant behavior, Philippines Journal: Philippine Review of Economics Pages: 47-66 Volume: 51 Issue: 2 Year: 2014 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/909/809 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:51:y:2014:i:2:p:47-66 Template-Type: ReDIF-Article 1.0 Author-Name: Charles Yuji Horioka Author-Workplace-Name: UP School of Economics Title: Evolutionary economics and household behavior Abstract: This paper provides an introduction to the field of evolutionary economics with emphasis on the evolutionary theory of household behavior. It shows that the goal of evolutionary economics is to improve upon neoclassical economics by incorporating more realistic and empirically grounded behavioral assumptions and technological innovation and that the goal of the evolutionary theory of household behavior is to improve upon the neoclassical theory of household behavior by replacing the neoclassical assumption of selfish utility maximization with bounded rationality and satisficing and by incorporating the reaction of households to the introduction of new goods and services. The paper concludes with a brief discussion of loss aversion and self-interest versus altruism. Classification-JEL: A12, B15, B25, B52, D11, D91, E21, O31, O33 Keywords: altruism, altruistic bequest motive, behavioral assumptions, behavioral economics, bequest motives, bounded rationality, consumption behavior, creative destruction, destructive technologies, dynastic bequest motive, evolution, evolutionary biology, evolutionary economics, group selection, household behavior, kin selection, loss aversion, natural selection, neoclassical economics, observational implications, profit maximization, pure altruism, rationality, reciprocal altruism, satisficing, selfishness, self-interest, strategic bequest motive, survival of the fittest, technology, technological innovation, technological progress, utility maximization Journal: Philippine Review of Economics Pages: 67-82 Volume: 51 Issue: 2 Year: 2014 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/910/810 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:51:y:2014:i:2:p:67-82 Template-Type: ReDIF-Article 1.0 Author-Name: Victor Abola Author-Workplace-Name: University of Asia and the Pacific Author-Name: Deborah Sy Author-Workplace-Name: Georgetown University Law Center Author-Name: Ryan Denniston Author-Workplace-Name: Duke University Author-Name: Anthony So Author-Workplace-Name: Duke University, Duke Global Health Institute Title: Empirical measurement of illicit tobacco trade in the Philippines Abstract: Cigarette smuggling reduces the price of cigarettes, thwarts youth access restrictions, reduces government revenue, and undercuts the ability of taxes to reduce consumption. The tobacco industry often opposes increases to tobacco taxes on the claim that greater taxes induce more smuggling. To date, little is known about the magnitude of smuggling in the Philippines. his information is necessary to effectively address illicit trade and to measure the impacts of tax changes and the introduction of secure tax markings on illicit trade. This study employs two gap discrepancy methods to estimate the magnitude of illicit trade in cigarettes for the Philippines between 1994 and 2009. First, domestic consumption is compared with tax-paid sales to measure the consumption of illicit cigarettes. Second, imports recorded by the Philippines are compared with exports to the Philippines by trade partners to measure smuggling. Domestic consumption fell short of tax-paid sales for all survey years. The magnitude of these differences and a comparison with a prevalence survey for 2009 suggest a high level of survey under-reporting of smoking. In the late 1990s and the mid 2000s, the Philippines experienced two sharp declines in trade discrepancies, from a high of $750 million in 1995 to a low of $133.7 million in 2008. Discrepancies composed more than one-third of the domestic market in 1995, but only 10 percent in 2009. Hong Kong, Singapore, and China together account for more than 80 percent of the cumulative discrepancies over the period and 74 percent of the discrepancy in 2009. The presence of large discrepancies supports the need to implement an effective tax marking and tobacco track and trace system to reduce illicit trade and support tax collection. The absence of a relation between tax changes and smuggling suggests that potential increases in the excise tax should not be discouraged by illicit trade. Finally, the identification of specific trade partners as primary sources for illicit trade may facilitate targeted efforts in cooperation with these governments to reduce illicit trade. Classification-JEL: F10, F14, H26 Keywords: tobacco, illicit trade, tax evasion Journal: Philippine Review of Economics Pages: 83-96 Volume: 51 Issue: 2 Year: 2014 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/911/811 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:51:y:2014:i:2:p:83-96 Template-Type: ReDIF-Article 1.0 Author-Name: Kristine Laura S. Canales Author-Workplace-Name: Department of Economics, Texas A&M University Title: The effects of a minimum wage on employment outcomes: an application of regression discontinuity design Abstract: In this paper, I ask whether a minimum wage increase results in adverse employment outcomes in terms of work hours and the probability of gaining or retaining employment. Regression discontinuity design (rdd) is employed on a household-level panel survey dataset, using the minimum wage as the forcing variable that determines whether a sample is assigned to either the treatment group (minimum wage worker) or the control group (above minimum wage worker). The rdd graphs and the regressions seem to point to a negative effect of a higher minimum wage on work hours, not only for workers earning the minimum wage but also for workers earning 50 percent more than the minimum wage. The probability of gaining/retaining employment is lower for minimum wage workers and for workers earning 50 percent above the minimum wage. Classification-JEL: J31 Keywords: minimum wage, regression discontinuity design, employment Journal: Philippine Review of Economics Pages: 97-120 Volume: 51 Issue: 2 Year: 2014 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/912/812 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:51:y:2014:i:2:p:97-120 Template-Type: ReDIF-Article 1.0 Author-Name: Phim Runsinarith Author-Workplace-Name: United Nations Development Programme in Cambodia Title: The impacts of microcredit on poverty reduction: evidence from Cambodian rural villages Abstract: This paper attempts to assess the poverty impact of microcredit for a panel of 827 households surveyed in 2001, 2004, and 2008 using propensity score matching (psm) and the difference-in-difference (did) method. The result shows that the poverty headcount in the microfinance institution (mfi) sample, which was highest in 2001, dropped faster compared to those in two other samples. This finding suggests that using loans from mfis may have a positive effect on poverty reduction. The result of regression analysis based on the sample with the common support using the did approach confirms the same results reflecting in higher per capita consumption expenditure, higher food expenditure, higher education expenditure, and higher healthcare expenditure over 2001-2004. Over a longer term 2001-2008, however, the effect of using mfi loan is still found to be significant and positive on only per capita consumption and per capita food consumption. Classification-JEL: I30, O17 Keywords: microcredit, poverty reduction, propensity score matching, difference-in-difference method Journal: Philippine Review of Economics Pages: 121-150 Volume: 51 Issue: 2 Year: 2014 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/913/813 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:51:y:2014:i:2:p:121-150