Purchasing power

About: Purchasing power is a research topic. Over the lifetime, 2714 publications have been published within this topic receiving 36866 citations. The topic is also known as: adjusted for inflation.

Real Product and Price Comparisons for Latin America and Other World Countries

Abstract: Latin American prices and purchasing power parity (PPP) comparisons with the United States, with Europe, and with other developing countries are undertaken in this article. While comparing Latin American price structures and the purchasing power of its currencies with those of the rest of the world, estimates of gross domestic product in real terms are derived for the Latin American countries. These are then compared with the U.S. real GDP and with those of countries in Europe, Asia, and Africa. This is done using the results of an effort by ECIEL to undertake such comparisons in Latin America;' and by the U.N., the World Bank, and the University of Pennsylvania to compare these concepts for a set of developed and developing countries in different regions of the world.2 During the early stages of the latter project (ICP), an understanding was reached with Brookings and the corresponding ECIEL project by which the results of the world comparisons and of the Latin American comparisons could be linked. This was accomplished by joint work on the U.S.-Colombia comparisons, which were included in the ICP project, and its use as a bridge for comparing the rest of Latin America to the United States. Apart from this collaboration, the two studies were conducted independently. The methodologies followed were quite similar though. The comparisons in this article refer only to total gross domestic product and its main components: private consumption, public consumption, and investment. Both the prices and purchasing power for total gross domestic product are considered, and their structure at the level of these three categories is explored. From the intercountry GDP purchasing powers, the PPP rates are calculated. The same exer-

Perceptions of the customers towards insurance companies in bangladesh-a study based on the survqual model

Abstract: This is the law of nature that people have to live and play with hazards and to some extent insurance policy can free people from those frustrations. Even if this is true, people of Bangladesh still don’t prefer to insure themselves. One may think that the people of Bangladesh are risk lover; on the other hand other may contradict by saying that their low purchasing power doesn’t permit them to avail insurance policy. This paper will highlight those issues relating to non popularity of insurance companies in Bangladesh. To find marketing side problems, Gap-model of service marketing will be fitted to the insurance industry of Bangladesh.

Distributional impacts of greenhouse gas emissions trading: alternative allocation and recycling strategies in california

Abstract: I. INTRODUCTION Thirty U.S. states have completed or are in the process of drafting climate action plans. Emissions trading, or "cap and trade," features are integrated into most of these plans, including collaboration among states in regional greenhouse gas (GHG) trading consortia (Regional Greenhouse Gas Initiative--RGGI 2007). Forward movement has been slowed by the current recession, but cap and trade remains attractive to many state governments because it provides a much-needed source of additional revenue when GHG emission allowances are auctioned to the highest bidder. Revenues can be used for a variety of purposes such as cutting state budget deficits, offsetting existing distorting or burdensome taxes, investment in research and development of clean technologies, and compensating key groups adversely affected by the policy. The distributional impacts of policy alternatives are important for two reasons. First is the normative goal of equity, or fairness. Of special concern is the impact of GHG mitigation on low-income households because they tend to be more vulnerable to economic losses. Lower income groups spend a higher proportion of their income on necessities, such as electricity and gasoline, and these goods are among those most likely to have their prices affected by climate policy (Parry and Williams 2010). Revenue recycling can help overcome negative income impacts. Second, distributional impacts are important for reasons of positive economics of predicting the outcome of the policymaking process (Parry and Williams 2010; Rose, Stevens, and Davis 1988). This perspective typically shifts many policy makers' attention to powerful special interest groups. It has led to greater willingness to consider the free granting of GHG emission allowances to emitters, mostly businesses. A fairness aspect arises here as well in that many emitters see free granting as a way of compensating them for potential economic losses from undertaking GHG mitigation. The distributional impacts are complicated by the workings of climate action plans. GHG mitigation polices will have a major effect at the site of their implementation. Some of the options, such as energy efficiency, can result in cost savings directly to businesses, households, non-profit institutions, and government operations that implement them, and they can also provide gains to business and household customers if the savings are passed on in the form of lower prices. It is likely that other options will incur costs to businesses or households, thereby affecting their competitiveness or purchasing power. Many entities will try to recoup these cost increases by raising their prices and passing the burden on to their customers. Net impacts will be affected by various types of indirect effects stemming from economic interdependence. Increases in demand ripple through the economy generating a set of successive rounds of positive multiplier effects on suppliers. Cost savings are passed along to several rounds of customers to add further to the stimulus. Cost increases and decreases in demand in other sectors will have their own ripple effects on different sets of suppliers and customers. The interactive sum of all of these price and quantity effects for the entire economy represents a set of macroeconomic effects whose outcome cannot easily be predicted a priori. In this study, we analyze four GHG emission allowance allocation/recycling alternatives for the California Global Warming Solutions Act for the target Year 2020. We adapt the Regional Economic Models, Inc. (REMI) Policy Insight Plus (PI+) model (REMI 2010), and supplement it with a Multisector Income Distribution Matrix (MSIDM) to update and heighten the resolution of income distribution considerations. First, we examine the recycling of revenues through proportional income tax relief and a per capita dividend (lump sum transfer). Then we examine the distributional impacts of free allocation under conditions where the opportunity costs of free allowances can and cannot be passed on to purchasers of products generating the emissions. …

When More Poor Means Less Poverty: On Income Inequality and Purchasing Power

Abstract: We show theoretically that the poor can benefit from price changes induced by higher income inequality. As the number of poor increases, the market for products aimed toward the poor grows, and such products become more profitable. As a result, there are circumstances where an increase in income inequality associates with higher purchasing power of the poor. Using cross-country data on the price of one kilogram of rice and the price of a Big Mac hamburger, we confirm a negative association between income inequality and the price of inferior goods, robust to the inclusion of a large set of control variables. Results are also robust to a first difference specification and to a two-stage instrumental variables approach. Examining economic well-being, it is thus important to analyze not only the incomes of households, but also the prices of the products and services that they buy.

Inflation's Impact on Life Insurance Costs: Brazilian Indexed and Nonindexed Policies

Abstract: Analytical models are applied to measure the extent of inflation's impact upon life insurance costs in Brazil, an environment characterized by endemic inflation. Indexed and nonindexed policies are examined and compared using capital budgeting valuation techniques. The analysis demonstrates that indexed policies do not fully hedge purchasing power erosion, and that financial protection available through indexed and nonindexed policies is more expensive in real terms under inflation than under stable prices. However, obtaining protection through nonindexed whole life policies is considerably more expensive than through their indexed counterparts. One of the economic institutions that is most susceptible to the effects of inflation is life insurance. In an effort to mitigate the inflation-produced erosion of values specified in life insurance contracts, several countries have adopted index-linked life insurance policies. In such contracts, the nominal values of the insurance premiums, cash values, and indemnification payments are linked to a price index and adjusted periodically in accordance with changes that have transpired in the index. This approach has been taken in countries such as Brazil, Finland, and Israel.