Along with providing educational programmes, the Econometric Institute serves as centre for research in econometrics, management science and related fields. One of their mission statements is to enable the faculty of the Erasmus School of Economics to do fundamental and applied research. This research sometimes has an interesting approach on subjects. For example: How can you recover inflation data with post stamps? And how do tourism and crises such as terror and war relate? In our new subject, 'REIsearch', we publish interesting articles regarding these unusual questions or problems. Want to know the answer? Then read further!
Recovering historical inflation data from postal stamps prices
In this study, Ph.H.B.F. Franses (Philip Hans) and E. Janssens (Eva) developed a method to estimate the historical inflation data reliably through an examination of a single product’s price. As a product which has hardly changed since its first use, postal stamp is found to be the suitable product for this study. Focusing on developing countries which has started to collect inflation data only recently, they illustrated their model with postal stamp prices in Suriname to recover annual inflation rates since 1873.
Two econometric models are used to argue the predictive power of the postal stamp prices; a simple regression model and a “so-called” MIDAS regression. As they show the strong connection between inflation and changes in stamp prices using the data they are available together, they use this relationship to estimate the inflation rates in the previous years, using only the postal stamp prices. In their conclusion, they discuss the method’s abilities and the possible causes of various inflation patterns in the data they recovered. An interesting conclusion is that “high inflation periods each time last for usually 1 or 2 years and at most 4 years.”
Click here to read the full article.
Tourism Stocks in Times of Crises: an Econometric Investigation of Non-macro Factors
Investigating the quantifiable impact of instability incidents such as terrorist attacks and financial crises on tourism, this paper by A. Zopiatis (Anastasios), C.S. Savva (Christos), N. Lambertides (Neophytos) and M.J. McAleer (Michael) deals with a highly discussed topic of the recent years. In the study, the effects of 150 incidents on 5 different hospitality/tourism stock indices are measured econometrically. The empirical findings in the study suggest various interesting conclusions about such incidents. According to the study, terrorist attacks have statistically the most significant impact, while war conflicts (day of declaration) has an insignificant effect on four of the five indices studied.