Are Ethical Banks Different? A Comparative Analysis Using the Radical Affinity Index

This article studies the differences between traditional financial intermediaries (commercial banks, savings banks and cooperative banks) and ethical banks based on property rights, in which the owner decides the ideology, principles, standards and objectives of the organisation. In ethical banking, affinity centres on positive social and ethical values. The article consequently focuses on an index proposed both to differentiate ethical banks from other types of banks, and also to pinpoint the differences between the various ethical banks themselves. This is the Radical Affinity Index (RAI), which groups banks together in terms of their stance on ethical commitment, concentrating on ethical ideology and principles (information transparency, placement of assets, guarantees and participation) and using a sample of 114 European banks. The evidence shows that transparency of information and placement of assets are factors that differentiate ethical banks from other financial intermediaries. Guarantees and participation are characteristics specific to ethical banks; these variables, however, do not offer clear evidence to our analysis.     

Individual differences in price responsiveness within and across food brands

Various researchers have reported that in routine grocery shopping the quantity consumers buy varies little across shopping occasions. Even in the presence of promotions, the largest part of promotional sales peaks has been attributed to brand switching. Recent investigations, however, indicated that the quantity consumers buy may include complex intra- and inter-consumer and intra- and inter-brand choice patterns. Using panel data from more than 1500 British consumers purchasing four food products during 52 weeks, the present study examined whether such complex patterns occur and assessed their relative contribution to overall quantity elasticity. Results showed that consumers buy larger quantities when paying lower prices, both within and across brands, and that consumers who buy larger quantities tend to pay lower prices, both within and across brands. The results also indicated that intra-brand price variations, especially those associated with consumers switching across package sizes, account for the largest portion of changes in quantity. Methodological differences might explain discrepancies among previous findings such as the duration of the sample used, the number of brands examined, and the conceptualization of a brand as including or excluding different package sizes.     

Evaluating social welfare and redistributive effects of Spanish personal income tax reform

Spain has recently concluded a process of wide-ranging reform of its personal income tax (IRPF), in force since 1992. The new IRPF is applicable from 1999 onward. The aim of this article is to analyse the implications of this tax reform for the distribution of personal income, and additionally to provide a comparative evaluation in terms of social welfare of both taxes. Empirical analysis is performed by a simulation exercise, employing the microdata contained in the Institute of Fiscal Studies’?IRPF Panel of Taxpayers. The analysis shows that the new IRPF induces a redistributive effect slightly lower than the old IRPF. The greater redistributive potential of the progressive structure of the new tax proves to be insufficient to compensate for the contrary effect caused by reduction in the level of tax liability. However, this new tax unambigously permits, in an inequality-adverse society, a higher level of social welfare than that attained by the old tax.     

Repeated Dichotomous Choice Formats for Elicitation of Willingness to Pay: Simultaneous Estimation and Anchoring Effect

Repeated dichotomous choice contingent valuation data are generated from responses to a succession of binary questions regarding alternative prices for an environmental good. In this paper we propose a simultaneous equation model that allows for endogeneity and error correlation across the responses at each stage of the bidding process. The model allows us to study the evolution of anchoring effects after the second dichotomous choice question. Estimation involves the Bayesian techniques of Gibbs sampling and data augmentation, and the application focuses on the preservation value of a natural area. The results for a data set involving up to four successive dichotomous choice questions show that restricted multiple-bounded models are rejected by the data with the general model. In addition, willingness to pay tends to stabilize after the second stage in the elicitation process for the general unrestricted model. When taking anchoring effects into consideration, it is revealed that individuals’ responses in the latter stages are influenced by the sequence of bid prices offered in earlier questions. Nevertheless, they do not have a significant effect on welfare estimates.      

Applications of Fuzzy Regression in Actuarial Analysis

In this article, we propose several applications of fuzzy regression techniques for actuarial problems. Our main analysis is motivated, on the one hand, by the fact that several articles in the financial and actuarial literature suggest using fuzzy numbers to model interest rate uncertainty but do not explain how to quantify these rates with fuzzy numbers. Likewise, actuarial literature has recently focused some of its attention in analyzing the Term Structure of Interest Rates (TSIR) because this is a key instrument for pricing insurance contracts. With these two ideas in mind, we show that fuzzy regression is suitable for adjusting the TSIR and discuss how to apply a fuzzy TSIR when pricing life insurance contracts and property‐liability policies. Finally, we reflect on other actuarial applications of fuzzy regression and develop with this technique the London Chain Ladder Method for obtaining Incurred But Not Reported Reserves.     

Strategy and structure redux

Forty years on from Alfred Chandler's seminal book Strategy and Structure , in the following pages contemporary strategists examine the book's impact and Chandler's contribution to business theory.     

Disentangling Alliance Management Processes: Decision Making, Politicality, and Alliance Performance

abstract    Using a sample of 106 organizations engaged in strategic alliances, we develop and test a framework of alliance-related organizational decision-making processes and their impact on alliance performance. With regard to direct effects, our results show a negative impact of decision-making recursiveness and no significant relationship for openness and procedural rationality. Acknowledging the importance of the organization's micropolitical context in which these decision processes are embedded, we also test the moderating influence of politicality. Our findings provide support for our hypotheses that in a context of low politicality, the decision-making characteristics of openness and procedural rationality have a positive influence, whereas recursiveness negatively affects alliance performance. In a context of high politicality, however, openness and procedural rationality exert a negative influence, and the negative impact of recursiveness is aggravated. We suggest that alliance-related decision making cannot be adequately understood without explicitly considering the micropolitical context in organizations.     

LABOR INCOME DIFFERENTIALS WITHIN THE LATIN AMERICAN FREE TRADE AREA (LAFTA)

This article considers the major results of a study of relative wage structures in the LAFTA region. It first discusses the nature and methodology of the study, which was undertaken for ECIEL. Data on the size of labor income differences are introduced, and an attempt is made to determine the causes of such differences, and to relate them to various wage differentials. The main findings of the study are then summarized, with discussions of inter-country, intra-country, and occupational labor income differentials and their causes. Finally, the results of the study are updated to the end of 1970, and some conclusions are derived regarding the inter-temporal behavior of wages in LAFTA.