An examination of the effects of partitioned country of origin on consumer product quality perceptions

This paper deals with the effects of partitioned country‐of‐origin associations on consumer product quality evaluations. The main objective of this research is to examine the cognitive processes by which country‐of‐origin information influences the consumer's evaluation of a product. To study the psychological process by which the country‐of‐origin associations are integrated in the formation of related behavioural deliberation, a hypothetical structural model was developed. The model contains seven theoretical constructs, i.e. country of design, perceived product sophistication, country of assembly, perceived manufacturing excellence, country of parts, perceived product quality and perceived product design. Data were analysed via structural equation models using Analysis of MOment Structures (AMOS) 5.0. Results show that countries that already have positioned themselves around a reputation for technological innovation related to product development and manufacturing may expect consumers to transfer those associations to new products from the country.     

Media preferences among young consumers in Bangladesh: a multidimensional approach

Generally, preference toward an advertising media is judged by company-driven effectiveness assessment parameters such as reach, frequency, sales and return on investment. This paper, on the other hand, by using structural equation modeling offers a three-dimensional 20-item ‘media effectiveness assessment model’ based on the quantitative judgment of young consumers. After that the preferences of male and female consumers toward seven different media with respect to the assessment criteria of the model have been captured and compared. Item-wise results of the study show that radio received highest priority by male consumers, whereas, TV and newspaper are the second priority. Female respondents on the other hand put highest preference toward magazine followed by radio. Popularity of radio among young consumers is noticeable. Dimension-wise comparisons revealed that men and women consumers preferred radio and billboard, respectively as the best media for ‘customization’ ability. However, for advertisement ‘positioning’ men and women prioritized TV and magazine, respectively. Finally, billboard and radio were found to be most ‘interactive’ as opined by male and female, respectively. The methodology of this study is based on 783 samples collected from the young executives (both male and female) of Bangladesh during September–November, 2014.     

Nonparametric estimation of conditional distribution functions with longitudinal data and time-varying parametric models

Nonparametric estimation and inferences of conditional distribution functions with longitudinal data have important applications in biomedical studies. We propose in this paper an estimation approach based on time-varying parametric models. Our model assumes that the conditional distribution of the outcome variable at each given time point can be approximated by a parametric model, but the parameters are smooth functions of time. Our estimation is based on a two-step smoothing method, in which we first obtain the raw estimators of the conditional distribution functions at a set of disjoint time points, and then compute the final estimators at any time by smoothing the raw estimators. Asymptotic properties, including the asymptotic biases, variances and mean squared errors, are derived for the local polynomial smoothed estimators. Applicability of our two-step estimation method is demonstrated through a large epidemiological study of childhood growth and blood pressure. Finite sample properties of our procedures are investigated through simulation study.     

Is the Hybrid New Keynesian Phillips Curve Stable? Evidence from Some Emerging Economies

This paper primarily examines whether the ‘hybrid new Keynesian Phillips curve’ (HNKPC) holds for four important emerging economics viz., Brazil, Russia, India and South Africa. This has been done after testing for the structural stability of this relationship. Econometric issues like the test of unit roots in presence of a structural break and estimation of output gap have also been done appropriately. Our findings suggest that the HNKPC is not stable for all the four countries. However, the analysis based on the two sub-periods thus formed clearly shows mixed evidence in respect of holding of this relationship.

     

Implied Risk Aversion Parameter from Option Prices

This paper estimates the representative investor's coefficient of relative risk aversion using option price data. Estimation is carried out using the method of simulated moments. Employing the following assumptions: a) agents have constant proportional risk averse preferences, b) complete markets exist, and c) asset returns are distributed lognormally, an objective function is constructed within the equivalent martingale measure framework. Unlike the case of equity markets, the implied risk aversion parameter from option prices is quite low and stays between zero and one.     

The Behaviour of the Real Exchange Rate: Evidence from an Alternative Price Index

Although the long–run purchasing power parity (PPP) hypothesis is expected to hold across tradable goods, all price indices available to researchers for testing the validity of PPP contain some proportion of non–tradable goods prices, which may generate substantial persistence in the real exchange rate. We construct time series for quarterly price indices that minimize the presence of non–tradable goods for six major economies. Applying recently developed nonlinear econometric techniques to the resulting five US dollar real exchange rate series for the recent floating exchange rate regime, we provide evidence that the nonlinear mean reverting properties of these real exchange rate series are stronger than the mean reverting properties of real exchange rate time series constructed using the consumer price index (CPI). In turn, these results have a natural economic interpretation.
(J.E.L.: F31).     

Inefficiencies in a Model of Team Formation

We consider a two period model with complete information involving three agents, two on one side of the market, and one on the other. The agents on the same side of the market bargain, among themselves, over whether to form a team or not, and also with the other agent, either singly or as a team, regarding the payoffs. We characterize the subgame perfect Nash equilibrium of this game. We find that the behavioral assumptions regarding the agents play a critical role in the outcome. If the agents are combative then the outcome is efficient. Whereas if the agents are peace loving, and the discount factor is large, then the outcome may involve delay, as well as (inefficient) team formation.     

Wealth inequality, entrepreneurship and industrialization

The paper shows that in a two-good economy with a basic and a luxury good sector inequality is indeed a hindrance to provide sufficient incentive for entrepreneurship to low-wealth economic agents. In contrast to the literature it uses both demand and supply-side explanations for the analysis. An entrepreneurial subsidy policy to encourage entrepreneurship in autarky financed by a lump sum tax on the rich is not very effective in unequal economies since it hardly impacts the welfare. When trade is opened up in the luxury good sector of such an economy the sector might cease to exist. In such a scenario, the rich people being the sole consumers would reap the entire benefits of globalization via low price of the imported luxury good. The paper highlights that the crucial question is: ‘how to globalize’ rather than ‘whether to globalize’ and suggests policy measures to make globalization inclusive.     

FIRM SIZE AND PRICING POLICY

We relate pricing policy of firms to their size, where firm size is interpreted as the size of the clientele served by the concerned firm. We argue that a firm with a large clientele faces a more severe reputational backlash if it ‘reneges’, i.e., deviates from its earlier price offer. This allows the firm to effectively commit to its offers, leading to a unique equilibrium without delay. Interestingly, this equilibrium corresponds to the equilibrium of the related model that does not allow for reneging possibilities. For smaller firms, however, the reputational effects are much less intense, and consequently the equilibria may involve deviation possibilities. In this case, the equilibria are non‐unique and may involve delays as well.