Motives for purchase decision-making: combining attribution and functional approaches

The motivations which lead to consumer decisions have been given relatively little research attention, since motivations are difficult to quantify. The four part typology developed by Katz,¹ when combined with self-perceived attributions, provides a useful method of examining the motivational underpinnings of consumer-purchase decisions. This study involved an experimental design to evaluate self perceptions of the four functional motives—ego defensive, value expressive, knowledge and utilitarian. A sample of 105 undergraduate students attributed their use or purchase for each of 52 items to one of the four functional motives. Using these responses as self-perception attributions, two research questions were examined: (i) would the four part typology be useful in explaining self-perceptions of past behaviour? and (ii) would one function of the typology dominate these reports for each item? An across-subject analysis suggested the four part typology could be meaningfully employed within a self-perception context. However, one functional motive dominated attributions for only six of 52 items. Since motivations and consumer behaviour are clearly linked, this research offers a method of providing additional insight into that linkage. The paper concludes with further research possibilities that integrate the functional motive approach and self-perception attributions.     

Changes in Union Wage Effects by Industry: A Fresh Look at the Evidence

Unions suffered a modest decline in their capacity to increase wages over nonunion levels between the late 1970s and the middle 1990s according to evidence presented here. The decline in relative wages was significant in only 13 (of 78) industries examined; in 11 industries the differential increased significantly. The industrially disaggregated econometric evidence is broadly consistent with institutional evidence about developments in particular industries; however, more industry-grounded research is clearly warranted.     

ECONOMIC LIBERALIZATION AND CHANGES IN CORPORATE CONTROL IN LATIN AMERICA

This article analyzes ownership restructuring and changes in corporate control in four large Latin American countries—Argentina, Brazil, Chile, and Mexico—during the 1990s. Drawing on original firm‐level data, this is a comparative study aimed at identifying cross‐country differences and regularities. It focuses on transactions associated with privatizations and private mergers and acquisitions (M&As)—their evolution, relative importance, and sectoral incidence—as well as the role played by different types of investors: local, foreign, and joint ventures. A specially built database was used in the analysis, comprising 3,085 private M&As and 329 privatization transactions. Although similar to processes occurring elsewhere, it is argued that ownership restructuring in Latin America was facilitated and fostered by specific changes in policy‐associated institutional framework conditions. That is, the wide‐ranging process of ownership restructuring is strongly associated with economic liberalization, which has become the main feature of Latin American national regimes of incentives and regulation.     

Credit Card Debt and Default over the Life Cycle

This paper solves an empirically parameterized model of life cycle consumption, which allows for uncollaterized borrowing and the possibility of default. The simulation results show that: (i) "social stigma " and credit limit have a very large impact on default rates; (ii) education level also has a significant effect on the probability of default, namely, through differences in the shape of lifetime labor income profiles; and (iii) the response of simulated default rates to labor income shocks is determined by the nature of labor income uncertainty (temporary versus permanent). Additionally, the model generates simultaneous consumer holdings of credit card debt and liquid assets.     

ASYMMETRIC DYNAMIC PRICING IN A LOCAL GASOLINE RETAIL MARKET*

Asymmetric‐price adjustment is a common phenomenon in many markets around the world, particularly in retail gasoline markets. This paper studies the existence of this phenomenon in the retail gasoline market in the city of Santiago, Chile, using a data set of weekly gas station prices that covers a period of almost four years. We found that prices adjust asymmetrically, and the asymmetry is different for branded gas stations and unbranded stations. In addition, we found that the asymmetry for high‐margin stations is statistically equivalent to that for low‐margin stations. This evidence is suggestive of collusion as a rationale for the asymmetric pricing policy observed.     

Investigating the Disconnect between Financial Knowledge and Behavior: The Role of Parental Influence and Psychological Characteristics in Responsible Financial Behaviors among Young Adults

Financial knowledge is an essential component in financial decision making; however, knowledge is insufficient to ensure responsible financial behavior. We investigate the weak association between financial knowledge and behavior by simultaneously testing the roles financial knowledge, parental influence, and individual psychological characteristics (self‐discipline and thoroughness) play in young adults' financial behaviors. Results from 2,712 respondents from the 1997 National Longitudinal Survey of Youth confirm there is a weak association between financial knowledge and behavior. Parental influence and self‐discipline positively associate with responsible financial behavior. We also investigate the moderating role of gender and observe that financial knowledge and parental influence improve women's financial behavior more than men, whereas being thorough has a larger impact among males. These findings suggest that considering social and individual psychological factors in financial education programs could improve program efficiency. The results also highlight the importance of adopting tailored financial education to suit gender differences.     

Fiscal Decentralization and Political Budget Cycles

We analyze a problem à la Rogoff where incumbents can distort fiscal policy to signal their competency, but where fiscal policy can be centralized or decentralized. Our main focus is on how the equilibrium probability that fiscal policy is distorted in any region (the political budget cycle, PBC) differs across fiscal regimes. With centralization, there are generally two effects that change the probability of a PBC. One is the possibility of selective distortion: the incumbent can be reelected with the support of just a majority of regions. The other is a cost diversification effect, which is present unless costs are perfectly correlated across regions. Both these effects work in the same direction, with the general result that the PBC probability is lower under centralization when decentralization also involves PBC. Welfare analysis shows that voters tend to be better off when the PBC probability is lower, so voters prefer centralization when decentralization involves PBC. Our results are robust to a number of changes in the specification of the model.