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It is widely known that in the exchange rate market there are three factors influential to determine the currency exchange rate between the related countries in theory; i.e., the interest rate, inflation, and expectation on the exchange rate. This paper aims to find how the exchange rate between U.S. dollar and Japanese Yen, both of which are widely recognized as major currencies in the international financial market, are affected by the four key variables selected here in this paper related to these three factors under the recent inflationary economic environment; i.e., interest rate yield of the two year treasury bond, inflation rate, and the two moving average of the exchange rate to be considered as rational expectation on the movement of the exchange rate. As result it is our discovery that the selected predicator variables have been influential to the daily volatility and monthly movement of the exchange rate of the Japanese Yen /US $ with evidence the two different models of the regression analysis are able to show the exchange rate are significantly correlated with these four key variables and strongly affected by them. Also, over 30-month study period, the interest rate parity or the purchasing power parity did not hold because of the strong US dollar and the continuous increase in interest rate yield during the rapid inflation in the US economy.

Across a series of 10 laboratory and online studies, Allard, Hardisty, and Griffin (2019) demonstrated an increased preference for premium, higher-priced products over standard products when consumers were presented with the additional cost of the higher-priced option (i.e., differential price framing; e.g., “for $20 more”) rather than with its total price (i.e., inclusive price framing; e.g., “for $60 total”); a phenomenon referred to as the differential price framing effect. In this paper, we conceptually replicate this effect in a field experiment that focuses on the application of a differential price framing strategy to a specific product format; namely, multipacks of identical products. Consistent with the differential price framing effect, the present study shows—based on 45,626 add-to-cart events and 30,426 completed product purchases on an online retailer’s website—that the choice shares of higher-priced options increase when a differential price framing strategy is used. However, compared to non-consequential add-to-cart activities, this bias is considerably less pronounced in actual purchase patterns.

PurposeThe objectives of this paper are to analyze the drivers of smoked marine fish prices and examine the challenges along the value chain to inform policy.Design/methodology/approachThe study relies on cross-sectional data from 158 fish smokers, 100 wholesalers, and 120 retailers in Ghana. The challenges faced by the actors along the chain are identified and ranked using Kendall's coefficient of concordance. The three-stage least square estimation approach is employed to control for endogeneity resulting from the simultaneous equations for prices of different fish types and their substitutes.FindingsThe results reveal that marketing experience, the extent of competition, price of substitutes, payment terms, and variable cost items, such as transportation cost and storage charges, are key determinants of smoked fish prices along the value chain. Lack of access to credit is the main constraint to the marketing of smoked marine fish, irrespective of the actor or the fish type.Originality/valueMany studies have established the linkages between fish consumption, prices, and food security in the literature. However, there is a dearth of information on the responsiveness of fish prices to changes in the market and seller-specific factors to drive policy to stabilize prices along the value chain.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-09-2021-0566

We show that the oil market has become closer to “one great pool,” in the sense that price differentials between crude oils of different qualities have generally become smaller over time. We document, in particular, that many of these price differentials experienced a major structural break in or around 2008, after which there was a marked reduction in their means and volatilities. Differentials between residual fuel oil, a low-quality fuel, and higher-valued products, such as gasoline and diesel, experienced similar breaks during the same time period. A growing ability of the global refinery sector to process lower-quality crude oil and the U.S. shale boom, which has unexpectedly boosted the supply of high-quality crude oil, are two factors consistent with these changes. Differentials between crude oils of similar quality in general did not experience breaks in or around 2008, although we do find evidence of breaks at other times.

Introduction: Increased taxation is one of the most effective tobacco control measures. Price differentials across tobacco product types may undermine the effectiveness of taxation policies by providing the option to switch to cheaper products rather than to quit. The aim of this study was to use commercial data to compare prices and price differentials of both cigarette and non-cigarette products across countries from all geographical regions. Methods: We analyzed 6920 price data points (i.e. product brands) from Euromonitor Passport 2016 for 12 types of tobacco products across 79 countries from the six WHO regions: Africa (n=5), Eastern Mediterranean (n=6), Europe (n=39), the Americas (n=15), South-East Asia (n=3), and Western Pacific (n=12). For each product and country, a price differential was computed as the percentage of minimum price to the median. Results: Median cigarette prices (US$) were highest in Western Pacific countries (4.00; range: 0.80 – 16.20) and European countries (3.80; range: 0.80 – 14.00), but lowest in African countries (2.00; range: 0.80 – 2.20). The medians of cigarette price differentials were largest in the Eastern Mediterranean (48.33%) and African regions (50.00%), but smallest in Europe (82.35%). Pipe tobacco and fine-cut tobacco were generally less expensive than cigarettes while cigars were the most expensive. However, there were wide variations in prices and price differentials across regions and tobacco products. Conclusions: We found substantial variations in prices and price differentials between countries and world regions across tobacco products, likely reflecting differences in taxation policies and structures. Findings identify types of tobacco products in specific geographical regions where price differentials are highest, thereby highlighting areas where taxation policies need improvement, for example through implementing specific excise taxes.

How do buyers judge prices? How do they know whether a product or service is priced reasonably, is a good deal or is too expensive? Do buyers perceive all price increases and all price promotions? Do price promotions and price increases necessarily change buyer behavior? How do buyers process the plethora of price information they encounter each day? Economists contend that price primarily represents the monetary sacrifice to obtain a product or service. Behavioral price researchers argue that more complex phenomena are involved. Buyers have individual, internal norms against which they judge prices. There are threshold points below which buyers do not perceive price changes. There are also specific ranges of prices buyers find acceptable for a particular product. Despite over four decades of behavioral price research, we know little about the root causes of these buyer responses to price information. This article is the first of several planned essays that will review the historical, theoretical and empirical developments in the field of behavioral price research. In this first review, we examine the core concepts behind buyer responses to price as well as the complex way that people process numbers. The objective of these essays is to bring focus to, clarify conceptual definitions, examine empirical developments and raise future research questions for this field of study.

Crypto arbitrage, the exploitation of currency-exchange arbitrage is a low-risk trading strategy which succeeds by leveraging market inefficiencies. By executing frequent buy and sell transactions on two different (fiat) currency exchanges to accumulate profits, the strategy employs the USA and South African Bitcoin price differential and the accompanying exchange rate between the countries. The approach is found to exhibit remarkable stability over the observation period (June 2021 to August 2023), yielding an arbitrage of a roughly 2% return, even after various fees have been accounted for. Higher returns would have been real-ised if the approach had been implemented earlier, e.g., in 2016, when the arbitrage gap was closer to 6%. The framework is hampered by South African regulations (which amongst other things impose a ZAR 11mn annual cap on cash leaving the country). This can, however, still be circumvented by definitional loopholes and the establishment of shell companies in the different jurisdictions.

This paper examines the impact of pipeline capacity constraints on the discount of Canadian oil prices relative to U.S. benchmark oil prices. Using a panel of monthly data for Canadian oil exporting pipelines, we estimate that price differentials between U.S. markets and Western Canada would increase by 3.6% for 1% increase in pipeline capacity constraints. Pipeline capacity constraints in Canada have resulted in an average loss of $5.53 for every barrel of crude oil exported to the U.S. between 2009 and 2017. In 2015 and 2016, the losses due to insufficient pipeline capacity were equivalent to 3%–5% of the Canadian oil and gas industry’s sales revenue and 69%–102% of its royalty payments to provincial governments. Western Canadian oil refiners and refined products’ consumers benefit from the depressed crude oil prices. However, the total gains captured by local refiners and consumers are much smaller than the losses of the upstream sector.

We study the co-evolution of the dynamics or co-movement of two electricity markets, the Italian and Greek, by studying the dynamics of their wholesale day-ahead prices, simultaneously in the time-frequency domain. Co-movement is alternatively referred as market integration in financial economics and markets are internationally integrated if the reward for risk is identical regardless the market one trades in. The innovation of this work is the application of wavelet analysis and more specifically the wavelet coherence to estimate the dynamic interaction between these two prices. Our method is compared to other generic econometric tools used in Economics and Finance namely the dynamic correlation and coherence analysis, to study the co-movement of variables of the type related to these two fields. Our study reveals valuable information that we believe will be extremely useful to the authorities as well as other agents participating in these markets to better prepare the national markets towards the European target model, a framework in which the two markets will be coupled.

In vein with the new energy market rules drafted in the EU this paper presents and discusses two contract types for hedging the risks connected to long-term transmission rights, the financial transmission right (FTR) and the electricity price area differentials (EPAD) that are used in the Nordic electricity markets. The possibility to replicate the FTR contracts with a combination of EPAD contracts is presented and discussed. Based on historical evidence and empirical analysis of ten Nordic interconnectors and twenty bidding areas, we investigate the pricing accuracy of the replicated FTR contracts by quantifying ex-post forward risk premia. The results show that the majority of the studied FTR contain a negative risk premium, especially the monthly and the quarterly contracts. Reverse flow (unnatural) pricing was identified for two interconnectors. From a theoretical policy point of view the results imply that it may be possible to continue with the EPAD-based system by using EPAD Combos in the Nordic countries, even if FTR contracts would prevail elsewhere in the EU. In practice the pricing of bi-directional EPAD contracts is more complex and may not always be very efficient. The efficiency of the EPAD market structure should be discussed from various points of view before accepting their status quo as a replacement for FTRs in the Nordic electricity markets.