Import prices and the distribution of personal income

An indirect translog utility function is estimated for U.S. expenditure on domestically produced non-durables, durables, services and consumer imports. Empirical tests lead to the rejection of homogeneity and linear logarithmic utility as valid functional forms. Estimates of expenditure elasticities indicate that imported varieties of consumer goods are luxuries. An exogenous decrease in the price of these goods, which would occur when tariff barriers are relaxed, would be especially beneficial to upper income consumers. Finally, a redistribution of expenditure from upper income consumers to lower income consumers will increase expenditure on domestically produced goods and reduce expenditure on consumer imports.     

Demand complementarities and cross‐country price differences

Empirical studies document that markups vary across destinations. This paper proposes a novel mechanism to explain variation in markups: consumers’ utility from final goods and services depends on their consumption of complementary goods and services. In countries with more complementary goods and services, consumer demand is less elastic, enabling monopolistically competitive firms to charge higher prices. The paper provides empirical evidence documenting a dependence of prices on demand complementarities.     

Should refusal to sell be illegal?

We analyse a private firm's decision of whether to refuse to sell to a particular group of consumers whose interaction with other consumers generates negative externalities. The literature has rarely incorporated this motive directly into the firm's profit-maximisation problem. Discriminatory refusal-to-sell policies can increase profits and consumer utility among those affected by the negative externality. Of course it also reduces utility among consumers who are refused, raising the possibility of an indeterminate effect on social welfare. We obtain a stark and rather surprising result: The refusal-to-sell policy is socially optimal whenever it is individually optimal for a profit-maximising firm to adopt such a policy. No legislation or regulation is required from a social-welfare perspective (under the assumptions used in the specification of the social welfare function). We prove this result analytically for the case of linear demand functions. Numerical simulations show that the result also holds for constant-price-elasticity demand functions.     

Deregulation,competition, and the network size in the market for telecommunication services

This paper analyzes the networking aspect in telecommunication services and the recent divestiture and increased competitiveness of the industry. The product considered is the right to access the network. The utility of a consumer from having access to a network depends on the network's quality, defined by the number of other local and long-distance consumers which can be reached. Network services are provided in two layers; On the lower layer consumers within a local access and transport area (LATA) are connected to a central office which provides the basic switching facility for local telecommunication. On the upper layer, LATAs are connected together by an interLATA carrier, to enable long distance communication from different localities.It is shown that relative to the choices of an unconstrained monopolist, larger networks at both layers may be obtained by imposing quality controls, while price controls may have the opposite effect. A divestiture policy in which all local carriers are connected to a single long distance carrier is likely to reduce the quality of services at both layers. Introducing competition among long-distance carriers further reduces the quality of long distances services but may improve the local service.     

Low-income consumers and payment choice

Low-income consumers are not only constrained with spending, but also with the type and variety of payment methods available to them. Using a representative sample of the U.S. adult population, this short article analyzes the low possession (adoption) of credit and debit cards among low-income consumers who are also unbanked. Using a random utility model, I simulate the potential consumer welfare gains associated with policy options suggested in the literature to provide unsubsidized or subsidized debit cards, or subsidized prepaid cards to this consumer population. Simulation results show the relative improvement in consumer welfare among all three policy options.     

Quality upgrading in Ethiopian dairy value chains: dovetailing upstream and downstream perspectives

Abstract

In this article, we analyze opportunities and constraints for upgrading product quality in the dairy value chain in Ethiopia. Our analysis is based on an integrated understanding of supply chain performance both from producer and from consumer perspectives. We outline as main drivers for quality upgrading: (a) factors that influence producers’ willingness to invest toward intensification by smallholder dairy farmers and cooperatives and (b) factors that induce consumer’s willingness to pay for healthy and nutritious dairy products delivered at specific retail outlets. Since there are large gaps between upstream producers incentives and downstream consumers motives, possibilities for dairy quality upgrading remain fairly limited. Given this market structure, decisive policy support is required for better tailoring producer’s investments with consumer preferences.     

Usage of formal financial services in India: Demand barriers or supply constraints?

Estimating the role of both demand-side and supply-side factors in financial inclusion and its distribution is important for policy making. However, existing literature has primarily focused on supply-side factors. In this context, this paper estimates relative importance of removing demand-side barriers and eliminating supply constraints to enhance financial inclusion in India. It also measures the extent of concentration of usage of formal financial services among richer households. Results suggest that, while availability of banking services has a significant positive effect on usage of formal financial services, its contribution in inducing households to use formal financial services is very small compared to the contribution of factors, such as education, income, employment status, gender and social norms, that influence the demand for formal financial services. It highlights the importance of placing greater emphasis on addressing demand-side barriers, rather than on improving physical availability of banking services, to promote financial inclusion in India.     

Explaining participation in the undeclared economy in Central and Eastern Europe: a demand-side approach

To explain participation in the undeclared economy, the conventional supply-side approach evaluates the reasons people work in this sphere. This article, for the first time in Central and Eastern Europe, explains the undeclared economy using a demand-side approach which evaluates citizens’ motives for purchasing undeclared goods and services. Here, three potential explanations for purchasing undeclared goods and services, grounded in rational economic actor, social actor and institutional imperfections theoretical perspectives, are evaluated. Reporting data from 11,131 face-to-face interviews conducted in 11 Central and Eastern European countries in 2013, the main finding is that all three explanations are used by consumers, demonstrating the need for a synthesis of these approaches. A multinomial regression analysis identifies the specific groups variously using the undeclared economy to obtain a lower price, for social or redistributive rationales, or due to formal institutional imperfections. The implications for theorising and tackling the undeclared economy are then explored.     

IN SEARCH OF THE BEST BUNDLE: HILL-CLIMBING CONSUMERS AND THE MICRODYNAMICS OF CONSUMER CHOICE

Abstract. The paper considers the consequences of hill-climbing consumer behavior in the presence of nonconvex utility, and considers the optimal reactions of nonmyopic firms and governments to such behavior. Both firms and governments have an incentive to induce consumers to start consuming goods subject to nonconvexities by offering introductory price discounts. Monopolists appear to offer smaller introductory discounts than is optimal; competitive markets may never be able to supply such goods at all.     

消费者选择生鲜农产品零售终端的行为分析——基于消费者效用的理论解释

已有的实证研究显示,消费者选择超市和农贸市场这两个生鲜农产品零售终端的频率存在差异。许多学者分析了造成这一差异的影响因素。但消费者选择不同零售终端的频率安排决策是如何做出的,这种频率安排又说明了什么等问题仍需深入探讨。从消费者效用角度出发,对这一频率安排差异进行理论解释,得出消费者效用最大化的层次还有待提升的结论,并提出提升这一层次的措施。     

Public Sector Rationing and Private Sector Selection

We study the interaction between nonprice public rationing and prices in the private market. Under a limited budget, the public supplier uses a rationing policy. A private firm may supply the good to those consumers who are rationed by the public system. Consumers have different amounts of wealth, and costs of providing the good to them vary. We consider two regimes. First, the public supplier observes consumers’ wealth information; second, the public supplier observes both wealth and cost information. The public supplier chooses a rationing policy, and, simultaneously, the private firm, observing only cost but not wealth information, chooses a pricing policy. In the first regime, there is a continuum of equilibria. The Pareto dominant equilibrium is a means‐test equilibrium: poor consumers are supplied while rich consumers are rationed. Prices in the private market increase with the budget. In the second regime, there is a unique equilibrium. This exhibits a cost‐effectiveness rationing rule; consumers are supplied if and only if their cost–benefit ratios are low. Prices in the private market do not change with the budget. Equilibrium consumer utility is higher in the cost‐effectiveness equilibrium than the means‐test equilibrium.     

Web2.0环境下网络效应对价值共创的影响机理研究

Web2.0环境下,众多网络平台注重用户参与、交流互动与开放共享,为生产者、消费者等多主体协同参与价值共创提供了条件。为了深入探究网络外部性效应对Web 2.0价值共创模式的影响,研究构建了考虑网络效应的网络平台双边用户参与价值共创的理论模型,模型均衡解表明,消费者参与Web2.0网络平台进行价值共创会增加产品或服务的附加价值,提升消费者满意度,提高消费者对产品或服务的认知价值,进而吸引更多消费者参与价值共创,而消费者数量的增加会进一步提高该服务的价值,并吸引更多商户参与,由此产生正向网络外部性效应。建立了分析消费者剩余的经济模型,剖析了Web2.0环境下消费者无法参与价值分配却仍愿意参与价值共创的内在驱动因素。     

分权的“悖论”：“省管县”改革对居民医疗服务满意度的影响

财政分权是否有助于提高与本地居民偏好更加匹配的公共服务水平未有定论。借助“省管县”改革这一准自然实验,文章旨在从微观需求角度考察地方分权对公共服务改善的效果。采用2005年的县级宏观数据和 CG S S2005居民调查数据,本文对“省管县”改革与公共医疗服务满意度的关系进行了实证分析。 Logit模型结果表明,“省管县”财政体制的实施未能使当地政府提供让居民更加合意的医疗服务,反而恶化了居民对公共医疗服务的满意度。在排除了“改革错觉”、“预期效应”以及“滞后效应”的干扰后,这一结论依旧稳健。文章认为,财权扩大加剧了地方政府间竞争,使得县级政府有更大的激励将财政资金投入到基建领域而非民生领域,这将导致医疗服务供给相对不足,进而引起满意度的下降。中介分析证实了这一推理。文章研究有助于从微观视角评析分权改革的公共福利效应。     

ELECTRICITY CONSERVATION: CONSUMER RATIONALITY VERSUS PROSPECT THEORY

Research supports the efficacy of prospect theory over utility maximization for consumer investment in electricity saving equipment. The findings have implications for designing electric utility programs to promote electricity conservation. Prospect theory describes, explains and organizes consumer behavior that is contrary to consumers maximizing a stable utility function. The results are similar across three ethnic groups.     

Niche products, generic products, and consumer search

We endogenize product design in a model of sequential search with random firm-consumer match value à la Wolinsky (Quart J Econ 96:493–511, 1986) and Anderson and Renault (RAND J Econ 30:719–735, 1999). We focus on a product design choice by which a firm can control the dispersion of consumer valuations for its product; we interpret low-dispersion products as “generic” and high-dispersion products as “nichy.” Equilibrium product design depends on a feedback loop: when reservation utility is high (low), the marginal customer’s match improves (worsens) with more nichy products, encouraging high (low) differentiation by firms. In turn, when firms offer more nichy products, this induces more intense search; depending on search costs, this could raise or lower consumers’ reservation utility. Remarkably, when the match distribution satisfies a hazard rate condition, firm and consumer interests align: equilibrium product design always adjusts to the level that maximizes utility. When this condition is not met, either multiple equilibria (one nichy, the other generic) or one asymmetric equilibrium (generic and nichy firms coexist) can arise; we argue that the former is more likely for common specifications of consumer preferences.     

A Review of Issues Pertinent to Liquid Fuel Policy*

This paper provides a schematic review of economic issues pertinent to liquid fuel policy, with emphasis on the Australian setting. Pricing and depletion are considered in the context of possible disruption of import supplies. Subsequent sections deal with substitutes, R & D and exploration, storage, and demand-side intervention. Consideration is given to the arguments that conservation is intrinsically desirable or, conversely, that domestic energy supplies ought to be priced ‘reasonably’ to consumers. Concluding remarks address the efficiency-equity conflict in domestic oil pricing, oil as a ‘political’good, and the relation between political and economic costs of import dependence.     

品牌体验、信任与满意

本文探讨了消费者品牌体验对消费者品牌满意的影响,同时探讨了消费者品牌体验各维度之间的关系。品牌信任在消费者品牌体验对消费者品牌满意的影响中起中介作用。本文采用了结构方程模型。建议企业多增加品牌体验的措施以增加消费者的品牌体验,从而提升消费者对品牌的满意度。     

Consumer attitudes toward low stake risk in food markets

Consistency of quality is viewed as important for producers of consumer goods. However, there is no literature testing the importance of quality consistency on consumers’ willingness to pay for consumer goods. We use an experimental auction market to investigate how inconsistency in tenderness affects consumers’ willingness to pay for beef. We find that most consumers are risk averse with respect to sensory quality. Both the average tenderness and the variance of tenderness affected the consumers’ willingness to pay for beef. Reducing the uncertainty of the sensory quality by categorizing the beef into three tenderness classes increased the total value of the beef by 8%.     

Product recall with symmetric uncertainty and multiunit purchases

A common view in retail electricity markets is that retailers discriminate based on consumers’ loyalty: loyal consumers pay more and switchers can (and do) select the cheapest offers) when they switch. The premium is colloquially known as a “loyalty tax” or “loyalty premium”. Reflecting this understanding Australia’s governments, regulators and consumer advocates have encouraged consumers to switch electricity retailers. Using a sample of 47,114 household electricity bills we test whether consumers that had switched in the previous 12 months (“switchers”) pay less than consumers who remained with their retailers (“remainers”) in the previous 12 months. We find that the annual bills of switchers are expected to be AU$48 (4%) lower than remainers and that the median switcher could reduce their bills by 21% by selecting the cheapest offer. Classifying retailers into tiers however provides some nuance to the main conclusion: the third tier of retailers (the new entrants with market shares of less than 3%) impose higher loyalty taxes than the other two tiers (incumbents and mid-sized retailers). The middle tier of retailers impose the lowest loyalty tax, and in fact for many consumers they may reward loyalty. These findings suggest that the loyalty tax is (typically) smaller than widely considered, it varies across tiers of retailers and even engaged consumers typically do not select the lowest priced offer. This raises the question of whether switchers are motivated by lower bills as well as other factors or whether the main challenge is search difficulties.

     

TARIFF POLICY AND WELFARE IN AN INTERNATIONAL DUOPOLY WITH CONSUMER‐FRIENDLY INITIATIVE

The purpose of this paper is to explore how strategic tariff policy and welfare are affected by the consumer‐friendly initiative of foreign exporting firms. We define a firm that is consumer‐friendly or non‐profit‐based if it considers both its own profit and consumer surplus. This paper extends Brander and Spencer by taking the consideration of consumer‐friendly firms into an international duopoly, and within such context examining the tariff policy and welfare. The consumer‐friendly initiative that leads to trade liberalization is a ‘Win‐Win‐Win’ solution in the sense that it is not only beneficial for foreign exporting firms, but also for the government and consumers of the importing country.