A study on the military alliance of South Korea–United States with the existence of threat from North Korea: a public good demand approach

The military alliance between South Korea and the USA is examined in the context of the North Korean threat. The findings are as follows: First, South Korea is more sensitive to the North Korean threat than the USA. Second, defense goods are affected more by national income and own price than by the...

Full description

Saved in:
Bibliographic Details
Published inEmpirical economics Vol. 36; no. 3; pp. 597 - 610
Main Authors Goo, Young-Wan, Kim, Seung-Nyeon
Format Journal Article
LanguageEnglish
Published Berlin/Heidelberg Springer-Verlag 2009
Springer Nature B.V
Subjects
Alliances
Consumption
Defense
Defense spending
Econometrics
Economic theory
Economic Theory/Quantitative Economics/Mathematical Methods
Economics
Economics and Finance
Elasticity
Elasticity of demand
Expenditures
Finance
Government spending
Insurance
Joint products
Management
Original Paper
Public good
Statistics for Business
Studies
United States > US
South Korea
North Korea
C30
Consumed defense goods
Elasticities
H41
Military alliance
H56
Spill-in
Purchased defense goods
Online AccessGet full text

Cover

More Information
Summary:The military alliance between South Korea and the USA is examined in the context of the North Korean threat. The findings are as follows: First, South Korea is more sensitive to the North Korean threat than the USA. Second, defense goods are affected more by national income and own price than by the North Korean threat. Third, the spill-in elasticity of demand for defense goods in South Korea is increasing in absolute value. The policy implications are that South Korea needs to strengthen the military alliance with the USA and to put emphasis on national income growth in defense budget planning.
ISSN:0377-7332
1435-8921
DOI:10.1007/s00181-008-0213-2