Sei sulla pagina 1di 14

Stuck Between Surplus and Shortage: Demand for Skills in the Russian Industry

This article wants to discuss about this matters: Provide a general description
of the surplus and shortage of labor, determine what factors affect the likelihood of
overstaffing or under-staffing, analyze the costs for firms to deal with these
problems, study the association between surplus/shortage and firms' performance,
and analyze the effect of employment protection legislation (EPL) on the likelihood
of labor surplus/shortage. Also in this Journal article, this paper aims to shed light on
how optimal employment is in the Russian manufacturing sector and what the scale,
composition and factors of labor surplus and shortage are.
This paper is intended for the expert readers know the topic but wants to learn more or
be reminded about some fact, or is curious about this matter like economists, managers, and owners
of firms. Its written using technical language, but in order to understand this journal explained the
words that are not sufficiently understandable.
The problem that is being addressed in this article is labor shortage and
surplus. According to the researchers of this article, the major solution is seen in
creating the institutional conditions that would stimulate a more efficient
reallocation of labor. They proposed this based on the evidences from Russia
Investment Climate Survey (ICS) which provides detailed insights into these issues.
The main point that emerges from this study is that difficulties for firms in
maintaining the optimal employment mix are grounded in the institutional
environment, which does not allow for a quick reallocation of labor from pockets of
inefficiency to pockets with more efficient use. If this point is correct, then any
attempts to substitute a complex restructuring of market institutions with detailed
governmental intervention into vocational training will bring even more inefficiency
and a further deterioration of the competitiveness of Russian industry.
This article becomes an eye-opener and brought knowledge and contributions
for the firms on they addressed some difficulties in market particularly labor
shortage and surplus. They brought new insights on how to solve this issue.
Like the issue of shortage. It is strongly believe that the major reason for
widespread and loud claims of shortage in the modern Russian economy is not a
physical shortage of labor, but rather weak selection mechanisms. Thus the key
issue is not a shortage or excess of labor in the Russian market but an excess of

nonviable firms and a shortage of highly efficient firms. This excess/shortage

distorts the labor market.
This article built a good foundation because the evidences that are presented
are based on facts and can rely on to. Every data that are used are substantially
supported the whole article. It includes references that supports the article like the
Russia Investment Climate Survey (ICS), W. Easterley. The Cartel of Good Intentions:
Bureaucracy versus Markets in Foreign Aid. Center for Global Development. Working
Paper No 4. 2002 April and many more.
For me, the article was presented well. Because the research is
comprehensive and they present data that are truly important to support on what
they want to prove. The issues in the article are well-discussed by the authors by
explaining each issue comprehensively. Whats good about this article is the authors
do not actually conduct a simple research but a knowledgeable research, they
discusses every important details, they analyse the data, and make conclusions
based on their research. And this article can contribute to face some issues in
society especially in economic world.
Actually as I read the article, the questions that are include in the abstract
are all answered by the authors.
How will the solution suggest by the authors be applied?
Is it surely be solve the issue about labor shortage and surplus?
What will happen if the authors proposed solution be applied?



This paper discussed in brief significances of managerial economics in business

management decision making process or the application of economic theories to solve managerial
decision problems. This paper wants to emphasize whats the role of managerial economics in
society especially in business world. This article is intended for The knowledgeable reader has an

education in the topic's field but wants to learn about the topic itself like the business owners, and
even us ordinary people; students and family. It is written the way that everybody will understand.
The paper includes definition of terms for the people who are not familiar about this matter can
The problem is being addressed in this article is how business will business improve their
profitability by applying economic theories? Based on the article, they give some cases that support
the problem like Leading multinational players like Samsung, LG, Sony and Panasonic cornered a

large part of Indian consumer durables market in the late 1990s. So to solve this, they apply
principles in Managerial Economics wherein they resorted to product differentiation. These
companies introduced technologically advanced models with specific product features and product
styling so that they maintain their market share.This was possible because of global manufacturing
facilities and investment in technologies.
Managerial Economics is a discipline that combines economic theory with managerial practice.
Managerial Economics bridge the gap between the problems of logic that intrigue economic theorist and
problems of policy that plague practical managers. Managerial economics enriches the analytical skill,
helps in logical structuring of problems and provides adequate solutions to the economic problems.
Actually, theres no new contribution about this article because as far as I know, it have been discussed it
by our professors before it just supports the topic and make additional information that strengthens the
Managerial Economics deals with the economic principles and concepts, which constitute Theory of
the Firm. The subject is a synthesis of economic theory and quantitative techniques to solve
managerial decision problems. It is micro-economic in character.
I can say that this article is not comprehensive than other articles. The ideas are not really
actually new, they just simply repackage old ideas and perhaps give them a new name. But they
give adequate examples about the topic. I think they have to elaborate it more for more
comprehensive research.
Actually the problem that arise in the journal was answered by the authors. They focused more
on explaining the topic rather than solving some issues.
Does the role of Managerial Economics ends in managerial decision making to solve problems?

Is the application of the economic theories applicable all the time?

How are you confident that Managerial Economics can surely solve the economic problems?
The Time Value of Money:
A Clarifying and Simplifying Approach

The purpose of this teaching note is to present a more effective teaching approach to TVM by clarifying the
definition of one of the TVM variables; by eliminating the needless confusion surrounding annuities due; and by
emphasizing the use of multiple-step problems. Its focus is more effective teaching through clarification and
simplification. This note addresses pedagogical issues only, and does not suggest that theoretical changes should be
made or that equations should be derived differently. The authors just give suggestions on how to reduce confusion
and enhance understanding for the students.
This journal is intended for business students, financial managers, and anyone who deals with money. The authors
written it in the sense that giving readers an easy path for them to easily understand. They use definition

of terms to explain what they are wanted to point out.


The major concern of the authors is the widespread difficulty experienced by anyone who deals with money
in achieving real understanding of TVM concepts. Actually theres no theory had been used rather each of these
authors presents new procedures for teaching TVM concepts. To prove the solution, they provide examples that
support their suggested answer to the problem.
In order to help students become more comfortable and competent in the use of TVM, the reasearchers call on
authors of finance textbooks to revise their presentation of the TVM material such that the variable "n" in the PV(a)
and FV(a) equations and factor tables be defined as the number of payments, not the number of periods. This will
allow for all annuities, whether immediate, ordinary or deferred, to be analyzed with the same, straightforward
process. Researchers also call for more challenging end-of-chapter problems that require multiple-step solutions, and
for the complete elimination of the purely semantic discussion of whether a series of payments occurs "at the
beginning" or "at the end" of each period.

These are the contributions:
Define "n" As The Number Of Payments, Not The Number Of Periods
-it is important because Of course if one adopts a point of reference one period before the first annuity

payment (for ordinary annuities), or one period after the last payment (for annuities due), the argument can
be made that the number of payments equals the number of periods. However, this artificial process of
identifying appropriate points of reference in order that the number of payments of an annuity equals the
number of periods, becomes confusing for students, especially when dealing with deferred annuities. On
the other hand adopting the definition of "n" as the number of payments allows us to dispense with this
artificial "point of reference" issue altogether, and to focus on the important elements of the stream of
payments itself, for example, the number of payments, their size, and when the first and last payments
occur on the timeline. When dealing with the present or future value of annuities, defining "n" as the
number of payments, allows for similar treatment of all annuities whether they be immediate, ordinary or
deferred annuities.
Forget "Beginning" Or "End" Of Period
-the author has the point that we have to completely dispense with the pointless and purely semantic
discussion of whether payments occur "at the beginning" or "at the end" of the period, and focus instead on
a correct and complete understanding of each of the four standard TVM equations. The additional TVM
equations and factor tables that apply to annuities due are not needed to solve TVM problems, no matter
how difficult. They only serve to complicate the subject for students and prolong the effort needed to really
understand it.


This article does not build upon any foundation research.

This article is well-written by the authors. They give sufficient explanation to the problem they
want to address. They observe, analyse and conclude. The authors discuss everything they
promise in the article's introduction.
All of the issues stated in the article was discussed by the authors and answered it by giving their
suggestions and recommendations.

Why Is the Time Value of Money Important in Capital Budgeting Decisions?
What other suggestions may you recommend for more understanding about TVM?
In what other ways can we apply the TVM?

The Application of Porters Five Forces Model on Organization

Performance: A Case of Cooperative Bank of Kenya Ltd
The purpose of the study was to assess the application of the five forces
model in terms of its benefits and limitations, and how it can be modified to cope with the Kenyan banking
industry. This study would be of great significance in enriching the body of knowledge on Porters five forces
model and providing a meaningful and contextual evaluation of the Kenyan banking industry consequently
coming up with useful insights. This article was intended for industries and businesses on how to apply the Porters
five forces. It is written in technical form because some terms cannot be changed. But there are other terms that are
substitute by common terms that are understandable.
The problem in this study is that the failure to use and under-utilisation
of the five forces by banks has led to poor performance. As a way of covering their poor performance, the banks
settled on high interest rates to make them retain their profitability. This poor performance and reverting to high
interest rates as a way of covering up for the dwindling market share, reduced sales, reduced profitability,
increased costs of operation, efficiency and effectiveness-related challenges has led to outcries from buyers of
banking services and withdrawal of some clients to Savings and Credit Cooperative Societies (SACCOS).
Equal employment opportunity employment and promoting gender parity exercised by Cooperative Bank of
Kenya should applied by all organizations that wish to retain their employees as no employee can withstand
unjust employment policies.
Other than the use of M-banking only for checking of balances and transferring money from the bank accounts
to MPESA accounts and vice versa, Cooperative bank should go towards the step made by Commercial bank of
Africa in offering M-SHWARI.
Owing to the fact that substitutes are posing challenges to the banks products, the bank should constantly study
the steps taken by the firms that offer substitutes and integrate them within their system as partners or be
proactive in modifying their products to avoid losing clients to substitute products.
In response to the increasing number and strength of competitors this study recommends that Cooperative bank
increases its product diversity and customize its products in a way that suits and retains the already existing
customers as well as increasing efficiency and effectiveness in service provision.
As a way of maintaining high quality services and good working environment, this study recommends that
Cooperative bank should use their bargaining power of consuming such services to engage high quality service
providers at the lowest possible cost as such a step could be cost effective and reduce the rates that the bank
charges its clients.
They come up with solutions based on the findings theyve observed and analysed.
This study deals with the Literature Review which has been sub-divided into Review of the Five Forces Theory,
Theoretical Framework, Conceptual Framework, Criticism of Porters Five Forces Model and Empirical Review.
It also includes the Knowledge Gap that relate to Porters Five forces model and its application to the banking
industry in Kenya, the Five forces model of competitive analysis in the light of the contemporary challenges of
rapidly changing environment, the missing sixth force (complements), challenges that face the model and how
these impact on organizational performance.
Actually theres no fresh contribution from the article because almost of the industries use this analysis for effective
This article uses Five Porters Analysis and its applied in a case in cooperative bank in Kenya.

For me, it is well-discussed, well-presented, and comprehensive. They present data and facts that support their topic.
They carefully observe, critically analyse to come up with their solutions to the problem. It helps in the way that
industries may become more aware to become more competitive in the business world.
The issues arise from the journal are solved by the authors by giving recommendations to the stated problems.
Is it necessary to completely rely on Five Porters model? Why?
What are your criticisms in using Five Porters model?
Is there an assurance that your business will be profitable in conducting Five porters analysis?

A Price Floor Solution to the

Allowance Surplus in the EU ETS

This paper provides a survey of policy responses under

consideration and brings into focus the option of
introducing a price floor. The journal is intended for their trading companies to
become aware of whats happening about EU ETS. It is written in technical form that
only those people who have knowledge in this matter will understand. I think it
should not be simplified because articles should not "tell lies to children" in the sense of giving
readers an easy path to the feeling that they understand something when what they then understand
is wrong.
The issue they want to address is oversupply in the EU ETS. The commission has
presented six structural
options to address the oversupply of allowances on a
long-term basis:
a) increasing the EU reduction target to 30 percent in 2020;
b) retiring a number of allowances in phase 3 permanently
c) revising early on the linear reduction factor that defines
the annual change in the emissions target;
d) extending the scope to other sectors;
e) limiting access to international credits; or
f) using discretionary price management mechanisms
g.) the price floor.
But they prefer the price floor. Given an

unpredictable price path, find that a price floor independently or in

combination with a price cap significantly improves welfare and the
performance of a trading program. Another important aspect of the price floor

is its potential to reduce uncertainty for investors regarding expectations of future

allowance prices. If implemented in phase 4 of the EU ETS, starting in 2020, a price
floor would be likely to influence the minimum price for the later years of phase 3
because of the opportunity for banking (Neuhoff et al. 2012). It is noteworthy that a
price floor has two effects: it can be expected to reduce the variance in allowance
prices and to increase their expected value, both of
which have a positive influence on the decision to invest in low-emitting
technologies. In addition, a price floor would reinforce auction revenues for

recirculation in low carbon innovation and address the risk of member states
introducing complementary policies that undermine the functions of the ETS.

One of the most challenging issues in the design and implementation of marketbased approaches to
regulation is managing uncertainty. This uncertainty stems from new information
about both the benefits and costs of emissions reductions. Updating a program to
assimilate new scientific information about benefits may take years as science and
economic research move toward consensus. In introducing the price floor in the EU
ETS would provide a nondiscretionary, rule-based approach that can be anticipated
by market participants and thus would have a positive effect on investments in nonemitting technologies and increase the overall welfare of the program.
A price floor has been mischaracterized as a tax, an instrument that has historically
faced political opposition, and the commission states that an explicit carbon price
objective would alter the nature of the EU ETS being a quantity-based market
instrument. But in fact, it is widely viewed as a successful design feature that has
stabilized prices and enhanced environmental outcomes, and in one program it
prevented a collapse of the trading market as a result of serendipitous changes in
the power system outside the market
This article does not build upon any foundation research.
I think it is a good article because it answered the problem that is stated in the
journal. It is also make us realized about the misconception about price floor. They
suggest new ideas on how to address the issue about the oversupply in EU ETS.
They explained it well and discuss it comprehensively.
They addressed the problem in the article. As you checked the article, it stated
several solutions to the problem.
Do you believe that the price floor is the appropriate solution to the problem? Why?
If not, among the 7 solutions stated except the price floor, what will you choose?
How will you apply it?

Demand for Gasoline Is More PriceInelastic than Commonly Thought

For the purposes of government policy concerning energy security, optimal taxation,
and climate change, precise estimates of the price elasticity of gasoline demand are
of principal importance.
The intended audience for this article is the government sectors for them to know
about this matter. It is written that uses very technical terms that the people who
have knowledge about this can only understand. It is written also in quantitative

The problem in this journal would be the meta-analysis indicates that the literature
suffers from publication selection bias. The researchers employ recently developed
meta-analysis methods to test for publication bias and estimate the corrected
elasticity beyond. They conduct analysis of data about elasticities and make
computations to prove their developed method.
They conduct a quantitative survey of journal articles estimating the price elasticity
of gasoline demand. In contrast to previous meta-analyses on this topic, they take
into account publication selection bias using the mixed-effects multilevel metaregression. Publication bias in this area is strong; when they correct for the bias,
they obtain estimates of short- and long-run elasticities that are approximately half,
compared to the results of the previously published meta-analyses and also to the
simple mean of all estimates in our sample of literature. If the simple mean reflects
our professions impression about the magnitude of the price elasticity of gasoline
demand, the impression exaggerates the true elasticity twofold.
Concerning future research, authors interested in figures for individual countries
may collect more estimates from working papers, dissertations, and other
mimeographs, which should provide enough degrees of freedom to estimate the
price elasticity of gasoline demand for each country using the methodology
described in this paper. Next, since previous meta analyses suggest that study
design may affect results in a systematic way, researchers could define bestpractice methodology and estimate price elasticities conditional on such best
practice to filter out the effects of misspecifications. Finally, given the number of
studies conducted on this topic each year, in the meta-analysis framework it is also
possible to test whether the price elasticity of gasoline demand changed during the
last decade when the prices of petroleum products surged.
This article does not build upon any foundation research.
In this article, I can say that it is very well-studied. They cite examples and data to
support their topic. It is complete, from the observation, analysis, and conclusions. It
includes all-around information about the topic.
The authors discuss everything they promise in the article.
Can you control the price you pay for gasoline?
When can you say that the price of gasoline can be elastic?
How much assurance can you get in conducting meta-analysis?

The Income Elasticity of the Value per

Statistical Life: Transferring Estimates
between High and Low Income Populations
This article explores by assessing the income elasticity appropriate for transferring
VSL estimates between high and low income populations. We review related
research and recommend changes in the

approach typically used for extrapolation. We focus on providing practical advice for
policy analysts working within the traditional benefit-cost analysis framework, based
on currently available research. This journal is intended for the expert readers who
have known about this topic and even working individual but the way the article is
written, it is too difficult for an ordinary person to relate. Aside from that, they
present data that is too complicated for them.

This study addressing lower income countries often instead assume that the
change is proportional to income, applying an elasticity of 1.0. However,
recent research suggests that higher elasticities may be appropriate. While
these higher values result in VSL estimates that appear more reasonable in
relationship to income, for very poor countries they may result in estimates
that are smaller than future earnings and consumption. In the research
literature, five approaches have been used to varying degrees to
estimate the income elasticity of the VSL: (1) cross-sectional analysis of
variation from contingent valuation surveys; (2) meta-analysis of
(primarily) wage-risk studies; (3) longitudinal analysis of wage-risk estimates
within a particular population; (4) comparisons of VSL estimates across
with differing income levels; and (5) quantile analysis of wage-risk data. By
this, and the presented data, they know how to address the issue.
As noted earlier, this article is primarily concerned with the approach used to
estimate the VSL in lower income countries where the value of small
risk reductions has not been well studied. When assessing the benefits of
policies in these areas, analysts generally use the benefit transfer method
to extrapolate values from studies conducted in higher income countries.
These newer studies indicate that the income elasticity of
the VSL varies depending on the income level, providing an explanation for
divergent results of the studies discussed earlier. At higher incomes, the
elasticities found in the contingent valuation studies and wage-risk metaanalyses
appear sensible. At lower incomes, the elasticities found in the longitudinal
studies and cross-country comparisons may be more reasonable.
Actually they just used approaches in conducting the study like (1) crosssectional analysis of withinsample
variation from contingent valuation surveys; (2) meta-analysis of
(primarily) wage-risk studies; (3) longitudinal analysis of wage-risk estimates

within a particular population; (4) comparisons of VSL estimates across

with differing income levels; and (5) quantile analysis of wage-risk data.
This article is well-presented. It discusses all of the important aspects and issues

in its domain. There were also adequate and appropriate examples and illustrations.
And they contribute new ideas.
As stated earlier, the concerns in the article were solved by the authors
because of their comprehensive study. This will help a lot to address some concerns
in the society especially in the economic world.

One issue that is not explored in detail above, but where more research
also may be desirable, involves determining how to best measure income
consumption when performing these types of extrapolations, given data
constraints. The VSL studies generally rely on earnings when estimating both
VSL and its elasticity, whereas policy analyses vary in the income measures
when determining changes in the VSL. Estimates of annual per capita GDP or
GNI, while plentiful, do not reflect income variation over the lifecycle, and are
likely to exceed personal earnings and consumption due to the effects of
taxes and
other factors.

Is this study only applicable in income elasticity? If not, what else?

How important is VSL parameter for policy analysis?
In your own opinion, how will you address the issue in this article?

Inflation and Economic Growth: Evidence from Pakistan

This study has the central objective to investigate growth-inflation relationship
empirically while focusing Pakistan economy. Second, the study seeks to observe
the short-run and long-run effects of inflation on economic growth of Pakistan and
vice versa. Thirdly, out of this study may be able to resolve an issue regarding
finding out the best level of inflation rate for Pakistan economy. Finally, the study
has special purpose to provide an efficient and active policy for future. This study
explores the connection between inflation and economic growth in the context of
Pakistan economy. This journal is intended for the readers who have knowledge
about this matter and they are the economists. This paper is too technical for the
readers who are unaware regarding to this topic. But the authors define the
complex words in this article.
This study has been an attempt to empirically explore the effects of inflation on
economic growth of Pakistan and vice versa.

They may be able to observe movements in economic growth and inflation in

different decades of Pakistan economy during the period 1961-2006. It is a fact that
concrete conclusions could not be drawn out of visual examination of the figures
given but an inverse relationship between economic growth and inflation rate could
easily be inferred throughout the period under study. Mubarik also suggests that
growth-inflation relationship could be easily understood through portraying their
trends over time. Hence, we decomposed the data for the period (1961-2006) within
7 grouped observations. The data of inflation has been selected while utilizing the
technique of maxima and minima. A judgment of the empirical evidence has been
obtained through the co-integration and error correction models to examine the
long-run and short-run dynamics of the inflation-growth relationship.
The outcome of the estimated model (1a) and (1b) is presented in Table (5)
and (6). These results imply that there is positive relationship between inflation and
economic growth for Pakistan. Inflation is positively related to economic growth but
up to what level, we shall determine further. The coefficients are statistically
significant and positive for both regressions (1a) and (1b). Furthermore, Table (5)
illustrates that, over the period 1960 to 2006, Gross Domestic Product increased
annually at the rate of 0.3 percent. Table (6) illustrates that, an increase in Gross
Domestic Product of 1 percent, on average, leads to about 0.50 unit increase in
inflation. These findings imply that both variables affect each other positively and
have significant impact. It also implies that inflation is beneficial for economic
growth in Pakistan in our sample period and economic growth is also increasing the
rate of inflation in Pakistan.
The study discovers an interesting policy issue of what is the threshold level
of inflation for the economy. The empirical evidence suggests that there is positive
relation between inflation and economic growth in Pakistan. Malik and Chowdhury
also establish a positive connection between inflation and economic growth. This
result is different from the predictions of Mubarik. He finds negative association
between inflation and economic growth. But the authors findings imply that both
variables affect each other positively and have significant impact. In fact, their
results can be justified as the Tobin portfolio-shift effect i.e. high inflation rate leads
people to invest more in physical capital and cut their real balance holdings. The
Granger test employed to check the linear causation implies that inflation affect
growth at lag three while there is no reverse causation from out put growth to
inflation. Their empirical findings also demonstrate that there is significant
relationship between the two variables in the long-run. Furthermore, the estimated
threshold model suggests that 9 percent threshold level (example: structural break
point) of inflation above which inflation starts to lower the economic growth in
Pakistan. This result is consistent with Mubarik who also recommended 9 percent
threshold level of inflation for economic growth. The results of this study also
suggest that below the estimated level of 9 percent is conducive for economic
growth in Pakistan. Khan and Senhadji find little bit different results from our study
for example,. 11-12 percent threshold level of inflation for developing countries in
their cross-country study. Sarel also recommended that below 8 percent inflation
may have a slightly positive effect on growth. So, to sum up the results of this
study, it can be concluded that inflation-growth relationship is positive and above 9
percent level of inflation, it slows the economic growth.

These findings have some policy implications for the policymakers and development
partners. This study is inconsistent with policy suggestions by international
agencies. Efforts to minimize inflation to a very low level (or zero) are likely to
adversely affect economic growth. However, attempts to achieve faster economic
growth may overheat the economy to the extent that the inflation rate becomes
unstable. The economy is on a knife-edge. The real challenge for the government of
Pakistan is to achieve a growth rate which is consistent with a stable inflation rate,
rather than beat inflation first to take it to a path of faster growth. Pakistan must
need inflation for growth, but too fast a growth rate may also accelerate the
inflation rate. Policymakers throughout the world during the last decade or so have
recognized that lowering inflation is conducive to improved growth performance. So,
the goal that the government of Pakistan has to achieve is of keeping inflation to
single digit, or close to single digit.


This article does not build upon any foundation research.

As you read the article, they discussed everything they promise in the article
introduction. They proved what they want to prove that theres a positive
relationship between economic growth and inflation. They also give appropriate
examples by presenting data of Pakistan economy during the period 1961-2006 and
other data. It contributes new idea because in economics, economists thought that
theres a negative relationship between inflation and economic growth but its
possible to have a positive relationship between the two. Thats why this article is
Like what Ive observed, everything they want to discuss was explained by the
authors. And they give suggestions to solve the issues.

How much possible that it can be happen also to other countries? In what
Will this positive relationship between economic growth and inflation benefit
everyone? How?
Is there a chance for some other countries which have unstable inflation rate
that they will have same condition with Pakistan?
Is the Lottery Product an Inferior Good in Higher Income Countries?
Abstract Do the populations of low per-capita income countries participate with a
stronger desire to win and spend relatively more money on lottery products? Is such
a desire to buy lottery products constant, or does it decrease when the country
reaches a higher per-capita income class? To answer these questions, this paper
uses econometric models with significant explanatory variables. The results confirm
the hypothesis that the lower income-class countries spend more than the higher
income-class countries. However, the results do not confirm the hypothesis that
lottery products may be considered an inferior good in countries belonging to the
higher per-capita income class. The results also show that for all countries, there is
an inverted U relationship between per-capita sales and per-capita GDP and up to a
specific value, the per-capita lottery sales decrease as per-capita GDP increases,
becoming an inferior good as a result.

The paper tests the hypothesis that lottery sales increase together with increases in
per-capita GDP up to a point, and then decrease.. The main purpose of the present
paper is to deepen the study of Garrett and answer the question whether lottery
products are an inferior good when it considers different income-class countries.
This article is intended for The knowledgeable reader has an education in the topic's
field but wants to learn about the topic itself. Like economics students. This journal have too
technical words that general readers with average reading ability will not fully understand. But this
paper discusses the topic as understandable as possible.
The problem that this article wants to address would be whether lottery products are
an inferior good when they consider different income-class countries.
In this case, when they consider the income as a continuous variable, there is
an inverted U relationship between per-capita sales and per-capita GDP and up to a
specific per capita income people will spend a declining percentage of their income
on gambling as their income increase. As there are other determinants of the
expenditure on lottery products, the paper introduces in the regression analysis
other explanatory factors, such as education and the male-female ratio. To test the
hypotheses that are formulated, the paper uses data vc
The paper tests this hypothesis and finds an inverted U relationship between
per-capita sales and per-capita GDP. Unlike Garrett, this study has not found a
negative elasticity for the highest income-class countries. Hence, this paper cannot
conclude that lottery products may be considered an inferior good in countries
having the highest levels of per-capita GDP.
According to the results, that in the first regression equation and for all countries,
the changes in a countrys income always produce a positive, but decreasing effect
on lottery sales. There may be a point at which lottery sales reach their maximum
and then start to decrease. The results show that countries in which the percentage
of males is higher than that of females reveal higher lottery sales.
This study has incorporated a number of factors that affect lottery ticket-buying
behaviour. Nevertheless, numerous issues remain beyond the scope of the present
study, yet still merit investigation. For example, this paper does not consider the
presence of substitute gambling products and does not control for the effects of
price changes in these differentiated goods, ceteris paribus, on the demand for
lottery products. If they introduce a new parameter to be estimated - the elasticity
of substitution between lottery products and other gambling products - the elasticity
of demand for lottery may be affected. However, since the market is characterised
by product differentiation they feel that this shortcoming does not affect
significantly the elasticity of demand for lottery products.
This paper tests some theoretical hypotheses, namely, the hypothesis that percapita lottery sales vary among income classes and the hypothesis that the income
elasticity of demand for lottery products varies across income-class countries. The
underlying theoretical explanation is that lottery products may be considered an
inferior good in countries having the highest levels of per-capita GDP (an inferior
good being defined as one for which purchases decrease as income increases).

When income increases, the income elasticity of demand for this good becomes
negative and lottery sales decrease.
I think the authors made a good job in this article. The way they discussed the
introduction up to the conclusions were connected. They conclude based on the
evidences they have. They used appropriate examples and data to justify what they
want to prove. Like the data for 80 countries in 2004. Theyve discussed everything
they want to prove like whether lottery products are an inferior good when they
consider different income-class countries. And as a result, this paper cannot
conclude that lottery products may be considered an inferior good in countries
having the highest levels of per-capita GDP.
This study has fulfilled the stated objectives and the results confirm the hypothesis
that lottery sales vary across income classes.
What other products are related to this topic? How it is related?
Is it possible that a normal good becomes an inferior good? In what way?
In your own opinion, what other factors affect lottery ticket-buying behaviour?