Melbourne Institute of Applied Economic and Social Research - Research Publications

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Author: LOUNDES, JOANNE ELIZABETH × Start date: 2000 × End date: 2000 ×

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    Dynamic Relationships in the Australian Labour Market: Heterogeneity and State Dependence
    Knights, S. ; Harris, M. N. ; Loundes, J. ( 2000-03)
    In this study, individual labour market dynamics are analysed using the Australian Longitudinal Survey. A random utility framework for analysing discrete choices is adopted. In this context, a model incorporating a state dependent relationship between employment outcomes is estimated. The influence on individual employment outcomes of additional variables including education, gender and unemployment benefits is also investigated. It is found that, even after controlling for observable and unobservable differences between individuals, there is strong evidence of state dependence. In certain key respects, the findings of this study differ markedly from those of other Australian labour market studies. It is expected that these findings will provide further insight into the causes of contemporary unemployment, and may constitute further evidence of a 'scarring' effect of unemployment.
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    A dynamic panel analysis of the profitability of Australian tax entities
    Feeny, S. ; Harris, M. N. ; Loundes, J. ( 2000-11)
    This paper investigates the determinants of profitability of Australian tax entities over the period 1993/94 to 1996/97 for each of 91 three-digit ANZSIC industries. The theoretical model is based on that of Cowling and Waterson (1976). However, it is augmented by the inclusion of lagged profitability to allow for habit persistence in entity profitability. The so-called operational Wansbeek-Bekker estimator is used to control for endogeneity of this lagged dependent variable, whilst simultaneously controlling for observed and unobserved entity heterogeneity. Aggregate results suggest that profitability in the previous year, entity capital intensity, and barriers to entry have the expected positive association with current profitability measured by the price-cost margin. Entity market share-and to a lesser extent concentration-are found to have a U shaped relationship with profitability.
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    Consumer Sentiment and Australian Consumer Spending
    Loundes, J. ; Scutella, R. ( 2000-11)
    There is a growing literature that seeks to analyse the relationship between consumer sentiment and economic variables, primarily because of the pervasive belief that consumers' opinions and expectations can influence the direction of-or signal changes in the direction of-the economy. There has been little previous empirical work on Australian consumer sentiment, either in determining its explanatory power, or examining the factors that influence consumer sentiment. This research aims to fill part of this gap by providing a clearer understanding of the relationship between consumer attitudes and 'real' economic variables. Specifically, the predictive power of the consumer sentiment index for consumption will be examined using the methods proposed in Carroll, Fuhrer and Wilcox (1994). Private consumption expenditure accounts for a large proportion of GDP; hence, early detection of possible shifts in consumer spending could assist policy makers in smoothing out the business cycle. Our results suggest that the causal relationship between consumption and sentiment in Australia is more complicated than what Carroll et al suggest, and that the behaviour of consumption in Australia looks more like the permanent income hypothesis than it does in the US.