• Journal of Korea Trade
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• v.23 no.8
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• pp.1-26
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• 2019

Purpose - This paper investigates the recent trade collapse, recovery, and prolonged slowdown to shed light on the discussions about whether the current slowdown is structural or cyclical. I examine structural, cyclical, and heterogeneous aspects of the recent trade trends using detailed statistics of a small open economy, South Korea, whose economic success and growth have been heavily dependent on exports. Design/methodology - I use both aggregated and disaggregated trade statistics of South Korea. I apply the following methodologies: 1) I decompose the trade growth into the extensive and the intensive margin and observe the effect of prices over time. 2) I estimate the trade-income elasticities focusing on the world's import demand, separately for goods from the world and from Korea. 3) I compare the drop in goods exports in slowdown and trade collapse, which are the two unusual periods in the recent history when world trade has substantially dropped altogether. Findings - I show that while the last drop of trade after 2015 has cyclical aspects, there is evidence that the continued slowdown from 2012 is structural: 1) the so-called 'China factor' is found in the analysis of trade-income elasticity of the world and China for imports from Korea. 2) The bilateral trade barriers between Korea and its principal trading partners are universally tightening. 3) Firm sizes, destination countries, and the mode of transactions affect disaggregated trade flows during the slowdown periods. Originality/value - This paper contributes to the debate regarding whether the current trade slowdown is structural or cyclical. I provide two concrete evidence that the export drop in 2015 stems from low oil prices: one is the divergence of Korean export value index from its export quantity index, which started in late 2014 when oil prices plunged. I also contribute to the literature by providing evidence that Korea's trade barriers with important trading partners are steadily increasing since 2012 as the protectionist measures toward Korea's export products are steeply increasing after the global financial crisis.

• Journal of the Korean Society of Food Culture
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• v.21 no.3
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• pp.254-261
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• 2006

The purposes of this study were to measure price elasticities of menu items of a family restaurant, identify differences of price elasticity between subgroups, and provide a comprehensive understanding on price elasticity. 3 menu items of a salad buffet family restaurant in Seoul were selected for analyses, and a questionnaire was developed through literature review and modified after pilot test. The questionnaires for main survey were distributed to 250 customers on their visit to the restaurant, and a total of 139 questionnaires were used for analyses (55.6%). Statistical analyses were conducted using SPSS Win (12.0) for descriptive analyses, t-test, ANOVA, and the main results of this study were as follows. The demands were expected very elastic to the changes in prices of all 3 menu items, and there were significant differences between groups of different company types. In addition, the changes in use were less affected by the changes in menu price when customers were satisfied with each menu item. On the basis of these results, it was concluded that price increases of menu items should be companied by quality improvement of products and services, and differentiated marketing strategy for each segments of customers would be helpful to profitability of the restaurant. Overall, measurement of price elasticity could help to predict customer behaviors on price changes, and give much useful information for managers and marketers of foodservice organizations in development of price strategies.

• Environmental and Resource Economics Review
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• v.13 no.4
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• pp.593-619
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• 2004

This study analyzes the interfuel substitution of energy demand in Korean manufacturing sector using static and dynamic linear logit models. For the period of 1981~2002, this study uses petroleum, electricity, natural gas and coal as energy sources. According to the empirical results, firstly, the own-price elasticity of coal has been increased steadily even though its elasticity is smallest compared with those of other energy sources. On the other hand, price elasticity of natural gas is largest, but its value has been decreased after 1997. Price elasticities of petroleum and electricity are very stable over the sample period. One of the main features in trends of interfuel substitution is as follows. Substitution effect of a change in price of natural gas on both petroleum and coal has been increased especially after 1997. The implication of the empirical results is summarized as follows: First, the fact of inelastic own-price elasticity of petroleum implies that the dependency of Korean manufacturing sector on petroleum and coal will be persistent even in a sharp fluctuation of petroleum price. Second, the effects of price increase in natural gas on demand for petroleum and coal are very significant. Thus, price decline of natural gas rather than price declines of coal and petroleum could be more effective as an energy price policy for the reduction of $CO_2$ emission. The assessment on this implication will remain for future researches.

• Environmental and Resource Economics Review
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• v.26 no.2
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• pp.257-286
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• 2017

This paper estimates the effects of imaginary repeated increases in excise duties on fuel oil consumption and on their income redistribution according to changes in consumer price index, if the inflation indexation system was introduced right after the second Energy Tax Reform ended in July, 2007 in Korea. In fact, nominal excise rates have not been adjusted since 2007. As a result, the real excise rates on fuel oils have been diminished inversely proportional to the consumer price index. Own- and cross-price elasticities of fuel oils such as gasoline and diesel oil are estimated under the general equilibrium framework based on the linear expenditure system. Counterfactual analyses through microsimulation in a static model are adopted to estimate the effects of introducing inflation indexation into the fuel tax in 2007 when the second Energy Tax reform ended on the fuel consumption and income redistribution in 2014. Microsimulations suggest that its introduction could have reduced the consumption of gasoline and diesel oil by 8.8% and 5.4%, respectively, ending up with increased excise revenue by 11.9%. The revenue increase in spite of decreased consumption is mainly because their demands are price inelastic. It could also have increased positive income redistributive effect by 0.01%p (from 0.12% to 0.13%), which is measured in terms of percentage decrease in Gini coefficient. In other words, the fuel excise on the two fuel oils decreased by 0.13% the Gini coefficient of before and after fuel tax income in 2014. This implies that the inflation indexation could have enlarged the income redistributive effect up to 0.13% in 2014, if it is introduced in 2007.

• Food Science and Preservation
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• v.6 no.2
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• pp.167-172
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• 1999

The noodle making characteristics were investigated for both eleven varities of Korean wheat, such as Chokwangmil, Geurumil, Eunpamil, Tnpdongmil, Woorimil, Oigeurmil, Alchanmil, Cobunmil, Geumgangmil, Seodunmil and Suwon 265, and two varieties of imported wheat, DNS(Dark Northern Spring Wheat) and ASW(Australian Standard White). After cooking of dry-noodle, the elasticities were 0.59-0.79 in the native wheat and 0.55-0.57 in the imported wheat. Among the varieties showing the highest value in the various texture properties of cooked dry-noodle, Alchanmil was highest in gumminess, Geungangmil in cohesiveness, Olgeurumil in adhesiveness, Geurumil in fimmess, Chokwang in chewiness, Tapdongmil in tensile strength Gobunmil in breaking strength. After cooking the wet-noodle, Tapdongmil in elasticity, Geurumil in adhesiveness, Geumgangmil in gumminess, cohesiveness, firmness and chewiness, and Suwon 265 in tensile strength showed the highest values in the respective textural properties. From the sensory evaluation of the cooked dry-noodle, the significant differences (p<0.05) among wheat varieties were observed in color, texture and overall quality. As a result, ASW was excellent in our all qualities of cooked dry-noodle followed by Tapdongmil, Alchanmil and Geumgangmil. The cooked wet-noodle also showed the high sensory scores (p<0.01) were showing the best in Tapdongmil, followed by Eunpamil, Geumgangmil and Woorimil.

• Journal of Labour Economics
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• v.29 no.1
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• pp.129-152
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• 2006

The purpose in this study is to analyze the effect of expected public pension assets (or social security wealth) and retirement incentives on retirement behaviors of two wage earners households. For the purpose of the study, an empirical analysis was conducted. In the empirical step, it was found that the empirical results were significant for men, but not for women namely, statistically asymmetric if behaviors of two couples are interdependent. The cause for the statistically asymmetric results were then determined. The Bivariate Probit model was used for estimation in the first step and the KLIPS(Korean Labor and Income Panel Study) was used as data for estimation. According to the empirical analysis, the results showed statistically significant asymmetry for men, however not for women, in expected public pension assets and other retirement incentives, non-wage assets, age difference, spouse's health status, spouse's monthly wages per hour and aging of their spouse In this study, cause of statistically asymmetric result in asymmetric complementarities of leisure of couples were found, then explained through different methods of comparison from the most recent studies. First, spouse's cross wage elasticity of self leisure demand(retirement) was calculated and determined whether complementarities of leisure of couples is positive or negative. Then, the degree of complementarities of leisure was distinguished in comparison with the relative size of two cross elasticities. Thus, men have relatively strong complementarities of leisure. But for women, it may roughly cancel out due to the substitution effect and the income effect. Therefore, women have relatively weak complementarities of leisure.

• Korean Journal of Agricultural Science
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• v.10 no.2
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• pp.393-405
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• 1983

The demand for livestock and poultry products including beef, pork, chicken, egg and milk whose income elasticities are relatively higher than other staple foods, has been increased significantly during the past two decades in response to the remarkable increase in per capita GNP. This trend will be continued during the fifth and the sixth five year economic development plan period beginning with 1982. The annual GNP growth rate will be 7.5% on the average during the next 10 years. It is greatly needed to estimate the demand for beef, pork, chicken egg and milk and to study the feasibilities of domestic production of livestock products for the formulation of adequate policies in order to equate the consumption and the production during the 1980s. So this study reviewed the possible changes in the food consumption patterns during the 1980s, estimated the demand for beef, pork, chicken, egg and milk by using empirical demand functions and finally made suggestions for the formulation of long term price stabilization policies for each livestock, poultry and dairy products through the equilibrium of the quantity of demand for and supply of the products. There are many factors affecting the demand for meats, but this study considered own price, prices of supplements and substitutes and per capita income as the independent variables in the demand equations. It was found that it's own price and income were most significantly affecting factors among others and the degree of substitution effects were remarkably different among the products. According to the meat demand derived in this study, per capita consumption of beef, pork and chicken in the base year 1982 was 11.2kg for total meat, 2.5kg beef, 6.0kg pork and 2.5kg chicken, 106 pieces egg, 15.1kg milk respectively, while those in 1991 were 19.3kg for total meat, 4.8kg beef, 9.6kg pork, 4.9kg chicken, 133pieces egg and 44.1kg milk. It is also predicted through this study that, when the level of production costs be maintained, the domestic production of pork and chicken will meet the demand for them during the fifth and sixth five year economic plan period. However, there will be chronic shortage of beef supply during the coming years. The annual import requirement will be 30,000tons to 40,000tons during the period. In order to stabilize the domestic livestock and poultry and dairy products market, the government should introduce measures to curb the increase in beef consumption by encouraging the consumption of pork and chicken. For this, the livestock production policy measures should be concentrated on : 1) the improvement of infrastructures of beef production by introducing advanced feeding and management technology, subsidies for the establishment of facilities and price support programs for farmers : 2) the development of dairy beef : 3) the reinforcement of the forecast systems for pork and chicken production and consumption.

• Health Policy and Management
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• v.17 no.2
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• pp.1-17
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• 2007

Limited coverage for health care services of National Health Insurance(NHI) in Korea has been ongoing policy issue but additional NHI financing through raising contribution or taxes in order to improve coverage faces substantial obstacles. Private health insurance(PHI) is often considered as an alternative financing source to improve coverage. Recent reform that attempted to stretch the role of PHI allowed life insurance companies to provide complementary PHI, indemnity plan which will pay for uncovered services by NHI and out-of-pocket spending for covered services. Although complementary PHI may relieve financial burden of patients, it may significantly raise NHI spending as well as total health expenditure since little out-of-pocket spending may increase utilization of health care. So far, there has not been enough discussion about concerns of potential adverse effect resulting from extended role of PHI. This study investigated potential increase of NHI spending followed by extension of complementary PHI through sensitivity analysis. The amount of NHI spending for services that would be covered by complementary PHI was calculated using 2005 NHI statistics and expected complementary PHI enrollment rate by age and sex. Expected utilization increases were obtained based on price elasticities$(-0.2{\sim}-0.5)$ from previous studies and expected coverage rate$(50{\sim}80%)$ of complementary PHI and then converted to monetary figures. Because coverage rate of complementary PHI has not been determined yet, we employed the sensitivity analysis using coverage rate of $50{\sim}80%$. Findings demonstrate that additional spending for health care services is expected to be $426{\sim}1,702$ billion won, corresponding amount payed by NHI $298{\sim}1,192$ billion won. In conclusion, since complementary PHI may raise NHI spending significantly, there should be an agreement whether this additional cost would be accountable and acceptable in our society. Potential inefficiency resulting from extended role of complementary PHI should be considered since public and private financing do not operate in isolation and there should be more discussion on proper role of PHI in Korea.

• KDI Journal of Economic Policy
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• v.26 no.2
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• pp.281-314
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• 2004

This paper theoretically formulated and empirically explored the relationship between exchange rate pass-through (ERPT) for (average) market price and an individual country's price, using steel products data in the US market, with special reference to two major steel exporting countries, Korea and Japan. It was found that the direction of market ERPT can be different from that of individual ERPT that each exporter experiences, due to strategic interactions among producers and different parameters. Vector error correction (VEC) models and impulse response analysis were used with the statistical inference based on the bootstrap-after- bootstrap of Kilian (1998) for short-run, and the fully modified estimation of Phillips and Hansen (1990) was used for long-run. Empirical results indicate that market ERPT in the US market due to changes in Korea-US exchange rates is different from those due to changes in Japan-US exchange rates. The framework developed in this study indicates that this phenomenon is attributed to either (i) the two countries have individual ERPTs of different magnitudes and directions for the products in the US market, or (ii) the pricing strategies of the other exporters' (to the US steel market) respond differently depending on whether the price of the product from Korea changes or that from Japan does. As each exporter's ERPT can be significantly different, and market response to each country's ERPT can be also different, this study concludes that it is crucial for an exporter to understand how competitors in the market respond to changes in its price, as well as to understand how its price changes when the relevant exchange rate fluctuates.

• Journal of Korean Society of Forest Science
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• v.90 no.3
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• pp.373-379
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• 2001

The objectives of this study were to assess implementation on tariff quotas and tariff cuts committed in the WTO as result of Uruguay Round(UR) negotiations and to examine impacts of reductions in agricultural protection agreed in the UR on major non-timber forest products markets. The implementation of WTO Agreement on Agriculture was analysed based on the relevant data and statistics. The impacts of implementation on tariff cuts and tariff quotas on non-timber forest products markets were estimated by using supply and demand elasticities from previous studies and data on production, consumption and trade after UR. The quantities of Chestnut, Pine nut and Jujube imported by the system of tariff quota did not exceed the committed quotas over the five years from 1995 to 1999. The current level of applied rates on imports of non-timber products is much lower than that of bound rates, which will be maintained until the year 2004. It is estimated that increase in imports after UR reduced prices and that reduction in prices led to decrease in expenditure and to increase in consumer surplus. It is estimated, however, that production level significantly decreased due to rise in imports and that the negative effects on production exceeded positive effects on consumption. Exports of most non-timber forest products decreased after UR even though non-timber forest products could gain access to the export markets at the lower tariffs as a result of UR.