Service recommendations and customer evaluations in the international marketplace: Cultural and situational contingencies

As the international service market continues its phenomenal growth, understanding the nature of effective interpersonal interactions between service providers and their customers is increasingly important. However, cross-national theory and research on this topic remain limited. In response, the following study employs data from China and the United States to test whether the cultural congruency of benefits emphasized by the service provider interacts with the customer's value orientation and/or consumption objective to affect evaluations of service quality. Results indicate that the cultural congruency of provider recommendations affects evaluations. Preliminary evidence also suggests that this effect is moderated by consumption objective.     

Impact of narrative versus factual print ad copy on product evaluation: The mediating role of ad message involvement

The relative impact of narrative versus factual message strategies on product evaluation was explored. The role of ad message involvement (AMI) as a mediator was also investigated. Narrative versus factual print ad copy resulted in more favorable product evaluations for two fictitious brands, one each from the cell phone and sunglasses product categories. Narrative print ad copy also elicited higher ad message involvement which, in turn, mediate the differential effect of narrative versus factual copy on product evaluations. The study demonstrated one of the major pathways through which the relatively more persuasive effects of narrative versus factual print ad copy appears to operate. © 2007 Wiley Periodicals, Inc.     

Deposit insurance and banking system risk: Some empirical evidence

This paper examines the effect of federal deposit insurance on the riskiness of the commercial banking system. It is generally acknowledged that a system affixed rate deposit insurance creates incentives for banks to increase their risk-taking activities. Yet very little empirical evidence exists confirming or refuting this supposition. The coefficient of variation of bank profits and the standard deviation of profits are used as measures of bank risk. How these measures of bank risk are affected by deposit insurance coverage, and other variables thought to affect bank risk, is examined. Deposit insurance is found to have a statistically significant positive effect on bank risk. This result provides empirical support for the FDIC Improvement Act requirement of risk related deposit insurance premiums starting January 1994.     

Functional equivalence in cross-cultural consumer behavior: Gift giving in Japan and the United States

The functional equivalence of products and consumer activities across cultures is a largely unexplored area. Yet, the lack of functional equivalence that exists may suggest the need for modification of some concepts and theories of consumer behavior. The study reported in this paper explores the functional equivalence that exists between U.S. and Japanese consumers in an important consumer activity—gift giving. The results suggest a lack of functional equivalence of this activity and illustrate how researchers should give explicit consideration to this issue in the development and testing of consumer concepts and models.     

The Economics of Minimum Pricing for Alcohol

This article explores a wide range of issues that proponents of setting minimum prices for alcohol must resolve before they can safely claim their proposals improve public health and decrease public health care costs. Problems range from inability to know ‘correct’ prices and why tacking on pricing regulations to markets already taxed makes sense, to various unintended adverse consequences such as generating higher demand for illegal drugs and alcohol. It also remains unclear why advocates would not prefer to raise taxes since this is the typical method that economists propose to correct markets in which harm spills over to innocent parties.     

COMPARING ECONOMIC WELL-BEING AMONG ELDERLY AMERICANS

Income-only and income-net worth measures of elderly economic well-being are derived from a single public welfare function-optimizing model of household production and intertemporal resource allocation. These measures are estimated with data on United States elderly in 1984 from the Survey of Income and Program Participation. The income-net worth measure also incorporates independently estimated work-life expectancies and earnings replacement rates. Under both measures, minority, moderately disabled, and unmarried female elderly are the poorest sub-populations. Increasing poverty with age is found under the income-only measure, but not the income-net worth measure.     

Evaluation strategies of American and Thai consumers

The effects of two factors (congruity of product information with consumer expectations and perceived risk associated with the product) on strategies used by consumers to evaluate products are tested in the United States and Thailand. When product information does not match expectations, consumers in both cultures increase evaluation effort and shift from using summary representations stored in memory to evaluation based on actual product attributes. Perceived risk also enhances evaluation effort in both cultures, but does not result in a similar shift from category-based to attribute-based processing. © 1994 John Wiley & Sons, Inc.     

The Effects of Purchases of Mortgages and Securitization by Government Sponsored Enterprises on Mortgage Yield Spreads and Volatility

In this paper, we investigate the effects of GSE (government sponsored enterprise) activities on mortgage yield spreads and volatility. Using various regression procedures (i.e., vector error correction (VEC) and GARCH models) and controlling for default and prepayment risk, we find that securitizations and purchases of mortgages by GSEs reduce mortgage yield spreads and volatility. In particular, we find that the yield spread between conforming and 10-year constant maturity treasury (CMT) rates decreases by 8.0 bp per $1billion increase in the level of GSE securitizations. Similarly, if GSEs increase mortgage purchases, the yield spread decreases 10.5 bp per $1billion increase of purchases. In addition, we hypothesize and find that GSE activities have a spillover effect to the non-conforming mortgage market; via investor substitutions, GSE purchases and securitizations of conforming loans reduce non-conforming loan rates. Thus, the measured influence of GSE activities is biased downward when measured using the spread of non-conforming loans over conforming loan rates. We also find that purchases of mortgages by GSEs significantly reduce mortgage yield volatility. In sum, our findings show that GSE activities reduce and stabilize mortgage market rates.