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AbstractUsing grocery price data for over 100 urban locations across the US and Canada from the 1920s, we show that deviations from the law of one price (LOP) were strongly related to climate differences. The effect of climate has a large impact on the elasticity of deviations from LOP with respect to distance, while having no impact on the border effect. We then test a counterfactual to show that the relationship between deviations from LOP and temperature does not hold when historical temperature data are replaced with contemporary. This is evidence that climate impacts production.

Over the years, tourism has emerged as the world's largest peacetime industry employing approximately 221 million people worldwide. According to the UNWTO, the tourist traffic rose to a record 1.087 billion arrivals in 2013 and this surge is expected to continue through 2030, in annual increments of 3.8 percent. Much of this unprecedented boom may be attributed to newly-affluent Asian nations such as Taiwan, South Korea and Malaysia as well as the huge populations of China, India and Indonesia - the first, second and fourth most populated countries in the world. Many analysts worry that the Asia Pacific region - a collection of dissimilar states squeezed between the Indian Ocean and the Pacific - could potentially be gaining market shares at the expense of their older rivals. We disagree with such a notion and will argue instead that the boom in East Asian tourist traffic is attributable to local factors primarily. Our examination of tourism data from the World Development Indicators database comprising a total of 92 countries covering a 16-year period (1995-2011), provides strong empirical support for our claim that the regional variation in tourism growth does not imply that some destinations are gaining at the expense of the rest. We examine changes in tourist arrivals among all relevant bilateral country pairs to test for a link between changes in tourist arrivals in Southeast Asian nations with Europe and North America. We do find that growth in tourist arrivals to countries of Southeast Asia has been particularly strong, but at the same time, tourism growth to Eastern Europe and to the Middle East has also been strong. This suggests that tourism is driven at least partly by economic growth of a destination, and it may also drive that growth. In examining changes in tourist arrivals by bilateral country pairs we find that for the vast majority of cases there is no support for the hypothesis that growth of tourism in one location comes at the expense of tourist arrivals to other countries. The tourism industry is dynamic and growing, and the success of new destinations does not come at the expense of traditional destinations. Rather countries seem to be establishing niches for themselves in terms of tourist offerings and as such may well be more complementary to each other than competitive. All countries—both developed and developing—may be able to stake a claim in the ever expanding global tourist trade.

Purpose– Empirical evidence on the relation between happiness (life satisfaction) and corruption is barely perceptible in the literature. The purpose of this paper is to contribute to closing this gap by presenting some estimates using a large cross-section of countries over the period 1996-2010.Design/methodology/approach– The empirical model allows both corruption and per capita income to enter as arguments of a happiness "production function". The correlation between happiness and corruption is presumed to be non-linear.Findings– While the results do not support the existence of a Kuznets-type trajectory, the study finds that the level of per capita income determines whether happiness and corruption are related and in what way. The authors estimate cutoff income levels at which corruption has a discernible effect on happiness. The results show that corruption reduces happiness, but only for high-income countries – roughly the upper half of the income range in the sample.Practical implications– Results nullify the oft-asserted statement that happiness is negatively linked to corruption in all countries. The nature of correlation is more complex.Originality/value– The paper goes beyond simply testing whether happiness is related to corruption. It conjectures that the relationship between the two variables is non-monotonic. Thus, the analysis considers the notion that the association between happiness and probity is income dependent. A novel feature of the empirical model is that the estimated income cutoff levels are endogenously determined. That is, income thresholds are not pre-determined. The authors also test for the robustness of the results by addressing the issue of potential endogeneity of corruption.

PurposeStudies on the determinants of remittances focus primarily on a single country or undertake cross‐country analyses using aggregate data. By comparison, there is a dearth of empirical evidence on the determinants of remittances from multiple host to multiple destination countries. To address this deficiency, the purpose of this paper is to use a novel dataset which captures these bilateral flows.Design/methodology/approachThe paper concentrates on three sets of explanatory variables: those which characterize the pair relationship, those that pertain to migrants' host country, and those related to the migrants' home country.FindingsCultural and political factors play a fundamental role. Altruism is not key in migrant remittances; investment motives are more important. Bilateral aid inflows bear a direct relationship to remittances. The marginal effect of happiness (in migrants' host and home countries) on remittances is positive for a large percentage of countries in the sample.Practical implicationsResults nullify the oft‐asserted role of remittances in assisting with adverse economic conditions, such as inflation. They also identify a possible nexus between remittances and foreign aid – a link that heretofore has not been identified or discussed in the literature or recognized by policy‐makers.Originality/valueThe contribution of the paper is its use of bilateral data to present evidence on remittances capturing not only North‐South, but also South‐South flows. The paper also contributes to the literature by considering, for the first time, some additional variables as potential determinants of remittances, chief among them the level of happiness of migrants' host and home countries, as well as the level of aid disbursed to migrants' home country.