https://www.um.edu.mt/library/oar/handle/123456789/5179 2026-04-15T08:24:31Z https://www.um.edu.mt/library/oar/handle/123456789/5033 Title: The European Commission proposal for the introduction of a Financial Transaction Tax (FTT) and its potential effects on Malta Abstract: In November 2011, the European Commission put forth a proposal for the introduction of a financial transaction tax (FTT). The proposal is intended to compel the financial sector to make a fair contribution towards EU fiscal consolidation after having benefited from significant financial support during the financial crisis that was triggered by the failure of the Lehman Brothers Holding Inc. The FTT is also intended to discourage speculative trading activities that lead to the destabilization of financial markets. The Commission backs its proposal by means of an Impact Assessment which assesses the effects of its proposal for the EU as a whole, but not for the individual Member States. Hence, this study seeks to examine the potential impact that the FTT would have on Malta's economy and in particular on its attractiveness as a financial domicile. The analysis undertaken in this dissertation starts by an overview of the three proposals put forth by Keynes, Tobin and Spahn, respectively, and proceeds to carry out a review of the literature that teases out the main underlying issues of an FTT. It then analyses the Commission's proposal in light of the findings of the literature review, and assesses its potential geographical application. The study examines the impact of the FTT on the Maltese economy and in particular weighs the potential new revenue stream against the economic costs of such a tax. Given the highly politicized nature of the topic, the study takes a brief look at the political perspective of the FTT from the national as well as from the overall EU perspective and places this against the prevailing EU financial crisis. It then concludes by recommending the proper examination of alternative policy instruments to the FTT. Description: B.COM.(HONS)ECONOMICS 2012-01-01T00:00:00Z https://www.um.edu.mt/library/oar/handle/123456789/5032 Title: An analysis of the effect of trade liberalisation on Malta's trade performance 1995 - 2010 Abstract: The study analyses the effects of trade liberalisation on Malta's trade performance. It focuses particularly on the liberalisation of trade from 1995 onwards. An analysis of the relevant literature on trade liberalisation is included. The study takes a mixed methodological approach. Econometric work in the form of regression analysis tries to garner a macroeconomic view of the impact of trade liberalisation on Malta's trade performance. This is supported with interviews to obtain a more microeconomic view. A trade freedom index is used as a proxy for trade liberalisation. The general aim is to evaluate the effects trade liberalisation, and the policies inherent with it, on Malta's trade performance. The major effect of trade liberalisation is that it causes imports to grow more than it does exports. Liberalisation in other economic sectors must be undertaken, implying increased investment to accommodate such ventures. Trade liberalisation forces businesses to be more efficient and cost-effective, or otherwise risk closing down. Description: B.COM.(HONS)ECONOMICS 2012-01-01T00:00:00Z https://www.um.edu.mt/library/oar/handle/123456789/5010 Title: The fiscal impact of a seasonal increase in the rate of VAT on restaurant meals Abstract: The purpose of this dissertation is to analyse and estimate the effects that an increase in the VAT rate on meals in restaurants, only for the summer months, would have on public finances. 'Summer months' for this dissertation are assumed to be the months of July, August and September. Using the Ordinary Least Squares (OLS) method, the price elasticity of demand for locals to restaurant meals was estimated at -0.54. This is the case in the long-run. Using an Error Correction Model (ECM), it was shown that in the short-run, the VAT increase would have no effect on demand. Using the -0.54 long-run estimate, it was concluded that a VAT rate increase from 18% to 25% for the summer months would generate around €7.5million in revenue for the government. It was also estimated that such a VAT increase would contribute 0.37% to the overall inflation rate. These results were based on two major assumptions. Primarily, it was assumed that foreign demand is perfectly price inelastic to changes in restaurant meal prices. Secondly, there is no inter-temporal substitution, i.e. local diners do not substitute relatively expensive summer meals with cheaper winter meals. Description: B.COM.(HONS)ECONOMICS 2012-01-01T00:00:00Z https://www.um.edu.mt/library/oar/handle/123456789/5009 Title: Contingent valuation of ambient air quality in Malta : the effect of proximity to pollution. information and time - preferences Abstract: The aim of this dissertation is to quantify individual willingness-to-pay (WTP) for increased air quality in Malta by means of the Contingent Valuation Method (CVM). The thesis examines the implications of information provision, proximity to a pollution source, and time-preference among other determinants of WTP. This dissertation draws from literature in the field of environmental and behavioural economics pertaining to the CVM including that which explores the effect that time-preferences may have on WTP for future benefits, and the effect that provision/framing of information may have on WTP for present benefits. Few studies have focused on these environmental economic issues within the context of ambient air quality. The thesis employs primary data collected by means of survey questionnaires, involving more than one treatment. Analysis is conducted using both the Ordinary Least Squares method and Binary Choice methods making use of the Probit and Logit models. This analysis finds that economic agents are willing to pay for improvements in ambient air quality (on average Euro 109 as a one-time surcharge in water and electricity bills). It also finds that proximity to a pollution source has significant positive effect on willingness-to-pay. Whilst providing information to respondents did not significantly affect willingness to pay, delaying benefits of policy to the future resulted in a significant reduction in WTP. Indeed, economic agents seem also to discount future benefits hyperbolically rather than exponentially. This also provides a useful insight on time-preferences by inferring the discount rate function based both on information and proximity from respondents' WTP contributions. Description: B.COM.(HONS)ECONOMICS 2012-01-01T00:00:00Z