In defence of Adam Smith's theory of value

Abstract

This paper defends Adam Smith against his critics on his ‘additive’ theory of value as well as his theory of ‘falling rate of profits’. It argues that Adam Smith did not forget the raw materials, and so forth, in his resolution of the price into wages, profits, and rent, and that the constraint binding on the total income was also taken into account by treating rent as the residual. It further argues that there is no fallacy of composition in Smith's explanation for the ‘falling rate of profits’. It was explained on the basis of rising real wages and the farmers’ inability to shift the burden of the rise in wages from profit to rent in the context of a growing economy.     

Store format choice in an evolving market: role of affect,cognition and involvement

Store choice has been studied extensively in the literature, but store format choice has had limited research attention. The store format choice for bulk grocery purchase being a rational context is well conceptualized in the Theory of Planned Behavior (TPB) framework. Attitude behaviour linkages are well explored but there is rare consensus on the components of attitude, their interrelationship and resultant impact on conation. The Theory of Reasoned Action has evolved over time to incorporate perceived behavioral control and past behavior to improve its explanatory capability as TPB; however, it has maintained its unidimensionalist approach and has not tested affect and cognition independently for its impact on behavior. This paper explores a Converging framework of the Affect and Cognition components of attitude and tests their independent impact on store format choice behaviour. The results indicate that Affect operates independently and has stronger impact on format choice especially in more evolved and familiarized contexts whereas cognitive evaluation is strong in relatively newer formats. There seems to be an interplay between Cognition and Affect over time with cognition transitioning into affect as familiarity with choices increases.     

Are EC-Japan-US Trade relations at the crossroads?

The Uruguay Round negotiations are currently passing through a critical phase after four years of strenuous bargaining. The ultimate success of the negotiations largely depends on the attitudes of the USA, the EC and Japan. What are the main contentious issues between these three and how are their trade relations likely to develop in future?     

Endogenous,Intra‐household Decision‐making and its Impact on the Labor Supply of Couples in Rural India*

Using data for rural India, this paper analyzes households' labor supply decision‐making, taking into consideration non‐participation, endogenous intrahousehold bargaining and nutritional status. Analyses of unitary and collective models suggest that bargaining between household members forms the basis of households' decisions, and these decisions alter households' internal power balance. Analysis of households' internal bargaining process suggests that women's bargaining power increases when their wages are higher and they are better educated. The results indicate that it is crucial to account for the mechanics of decision‐making within households when studying the effects of changing labor market conditions or designing development policies to improve individual well‐being or to empower women.     

Dynamic Performance Benchmarking of Indian General Insurers

In India, competition scenario in the general insurance sector changed since the year 2000–2001 with the entry of several private sector players in the respective market. While a few studies attempted to benchmark the performance of Industry players using early data available from the market regulator, the existing research studies have a number of weaknesses. Against this backdrop, the present paper seeks to evaluate the performance of 15 general insurance companies for the period 2009–2010 to 2013–2014 using a two stage approach. In the first stage, the study uses the dynamic DEA model suggested by Tone and Tsutsui (Omega, 38(3–4):145–156, 2010) to evaluate the in-sample companies in terms of slacks based measure of technical efficiency. In the second stage, the efficiency scores have been explained by solvency performance of the insurers in terms of a panel data censored regression model with robust residuals. The results indicate a very strong association between efficiency and solvency.

     

Consumers' perceptions of promotional framing of price

This article focuses on consumer perceptions of transaction value when presented with deals that are equivalent on a unit‐cost basis but worded differently. Through an experimental design setting, it examines the effect of three such frames: one, stated in terms of a straight price promotion (“50% off”), the second, as an extra‐product or volume promotion (“buy one, get one free”), and a third as a “mixed” promotion (“buy two, get 50% off”). Four typical supermarket categories are considered which permit the investigation of the effect of two category‐based moderating factors: stock‐up characteristic and price level. Results show that the nature of framing appears to differentially affect consumer perceptions of value from “equivalent” deals. Also, perceptions of deal value from price versus extra‐product promotions are moderated by the stock‐up characteristic of the category. However, consumers' internal reference prices remain unaffected across one‐time price and extra‐product promotions. These findings provide some understanding of the role of deal framing on consumers' responses, and offer implications for industry practitioners interested in communicating the maximum value in their deals. © 2000 John Wiley & Sons, Inc.     

Sectoral Technical Progress and Aggregate Skill Formation

Recent studies discuss micro-transmission mechanisms to measure spillover effects of MNC (Multinational Corporations) activity on human capital in host countries. We develop an aggregate transmission mechanism to show that technology deepening in advanced sectors affect economy-wide skill formation, not analyzed in previous studies. Sector-specific advanced technological input and borrowing from local capital market at preferential rates dampens rate of skill formation if local firms are more skill-intensive. Liberal trade policies applied only to MNC sector may lower traditional export if credit subsidy offered to MNCs is simultaneously withdrawn.