Racial Earnings Disparities and Family Structure

One explanation for the widening of racial earnings gaps among family heads during the 1980s is that black families were increasingly headed by females during that period. This explanation is tested using data on black and white family heads in 1976 and 1985 from the Institute for Research on Poverty's Current Population Survey. Log-earnings equations, corrected for selection bias and for the endogeneity of labor force participation, are estimated for blacks and whites in 1976 and 1985. If the impact of rising female-family headship on labor force participation is ignored, one finds support for the family structure explanation. But support for alternative explanations is also found. There are substantial impacts of within-race gender discrimination and of market racial discrimination. When the endogeneity of family structure is taken into account, further support is found for the view that endowment differences only explain a modest portion of the rising gap in earnings between black and white family heads.     

The Effect of Friendly Persuasion and Gender on Tax Comliance Behavior

Friendly persuasion, in contrast to deterrent measures like tax audits and penalties on underreported taxes, is a positive and possibly a cost effective method of increasing taxpayer compliance. However, prior studies have failed to show that friendly persuasion has a significant impact on compliance (Blumenthal et al., 2001; McGraw and Scholz, 1991). In our study, in contrast to prior studies, we examine the impact of generating and reading reasons supporting compliance as friendly persuasion on individuals' income reporting behavior as well as control for gender effects. Specifically, we predict an interaction effect between friendly persuasion and gender on compliance behavior. We carried out a 2 (friendly persuasion and control) × 2 (men and women) full factorial experiment, where participants earned $30 by completing two questionnaires. Participants in the friendly persuasion group were required first to generate and second to read a list of reasons why they should comply fully. Afterwards, participants in both groups were asked to report the income they earned and pay tax on the reported income. The results show a significant main effect for gender as well as a significant interaction effect between gender and friendly persuasion on income reported. Women in the friendly persuasion group reported significantly higher income compared to men in that group. Other comparisons were not significant. Policy implications for increasing taxpayers' ethics and compliance are highlighted.     

Effect of Order of Contribution in a Sequential Public Goods Dilemma

This study examined how order of contribution in a sequential public goods dilemma affected cooperation. Under a sequential protocol of play, players of different levels of efficacy made decisions one after another. We contrasted a High-to-low versus Low-to-high Efficacy order in a nine-person game. Under a High-to-low order, high-efficacy players made decisions in positions 1–3, medium-efficacy players in positions 4–6, and low-efficacy players in positions 7–9. Under a Low-to-high order, the positions of high- and low-efficacy players were reversed. We hypothesized that cooperation rates would be higher in the High-to-low order that high-efficacy players (assigned in early positions), who would likely cooperate, would induce subsequent players to cooperate also. We found the anticipated effect that cooperation rate was higher in the High-to-low than the Low-to-high efficacy order. The efficacy order effect was the most prominent when people perceived that their group was becoming uncooperative. This study illustrates a new type of structural solution to social dilemmas that by systematically assigning people to different sequential positions, a group can be made more or less cooperative.     

Cross-national consumer research using structural topic modelling: Consumers' approach-avoidance behaviours

This study introduces structural topic modelling (STM), a sophisticated unsupervised machine-learning algorithm for text analysis, to compare Indonesian and Malaysian Muslim consumers' approach-avoidance behaviours toward Korean beauty products using social media data. The STM results revealed 16 topics for each country, including new common themes belonging to K-beauty culture and wannabe Korean skin. Intriguing differences were also observed between these countries. Korea-related constructs, such as Korea's image and wannabe Korean skin, were approach factors for only Indonesians. Korean cosmetic brand-specific topics were extracted for only Malaysians and were significantly associated with their behavioural responses. Unsuitable Korean beauty products and domestic product preferences were avoidance factors for Indonesians, but new product risks and conflicts between Muslim and Korean cultures for Malaysians. We demonstrate that STM is a helpful tool in cross-national research for corroborating and extending the existing theoretical frameworks. The practical implications are also provided for global marketers.     

A Conjoint/Logit Analysis of Consumers’ Responses to Genetically Modified Tofu in Taiwan

We use data collected from a consumer survey of face‐to‐face interviews to determine consumer demand for genetically modified (GM) tofu attributes in Taiwan. Conjoint analysis using logit models reveals that, on average, brand is the most important attribute in terms of influence on consumers’ preferences, followed by price, with GM content having the least influence. However, the analysis also reveals three distinct market segments for tofu. Apart from the largest segment (which reflects the average lack of concern about GM food), the remaining two segments are split according to their preference or antipathy towards GM tofu. This result suggests that GM labelling is helpful to Taiwanese tofu consumers.     

Revisiting the valuation of deposit insurance

This study proposes a framework for pricing deposit insurance that evaluates the effect of depositor preference laws and the issuance of contingent capital bonds. Four main findings emerge from this study. First, traditional option pricing models of deposit insurance overestimate insurance premiums. Second, only large issuances of contingent capital bonds decrease deposit insurance premiums under depositor preference. Third, the issuance of contingent capital bonds can partially offset banks' excessive risk-taking caused by regulatory forbearance. Finally, although large banks have implied too-big-to-fail risks, the deposit insurer's costs from large banks are not nearly as high as reported in previous studies.     

Predicting Consumer Avoidance of Native Advertising on Social Networking Sites: A Survey of Facebook Users

Abstract

As a result of constant efforts to improve consumers’ online advertising experiences, native advertising has started to gain popularity on social networking sites (SNSs). This survey study examined antecedents of avoidance of native advertising on SNSs and the moderating role of consumer skepticism toward native advertising. Our findings suggest perceived intrusiveness and perceived informative and entertainment advertising value as major antecedents of consumer advertising avoidance. Additionally, the number of brands that consumers are following on SNSs and negative communication among peers on SNSs were found to be factors affecting native advertising avoidance. Finally, consumer skepticism toward native advertising was found to be an important moderating variable in the mechanism of advertising avoidance on SNSs.     

Occupational Segregation and Gender Wage Differentials: Evidence from Malaysia

In Malaysia, the participation of women in the labor market has increased over time. However, occupational segregation and wage differentials continue to be prevalent between men and women in the labor market. The present paper investigates gender‐related occupational segregation and wage differentials based on data collected from 7135 working households in Peninsular Malaysia in 2011. The wage decomposition model introduced by Brown et al. (1980) is used to examine the determinants of gender‐related wage differentials. The results suggest that differences within occupations account for the largest portion of the wage gap between men and women. The results also indicate that wage discrimination within occupations plays an important role in the gender wage gap, while sample selection bias plays an important role in the examination of gender wage gaps.     

Arbitrage opportunities,liquidity provision,and trader types in an index option market

This study examines the impact of arbitrage in put–call futures parity (PCFP) violations on option market liquidity and explores the liquidity provision process by trader type during periods of arbitrage exploitation. Using a unique data set comprising the complete history of transactions, we find that PCFP violations contain toxic arbitrage opportunities. Hence, more frequent toxic arbitrage opportunities can cause liquidity to deteriorate because arbitrageurs create adverse selection costs and order imbalances in the option market. In addition, when the law of one price breaks down, market makers dominate by providing liquidity compared with individual, domestic, and foreign institutional traders.     

American option valuation under stochastic interest rates

By applying Ho, Stapleton and Subrahmanyam's (1997, hereafter HSS) generalised Geske–Johnson (1984, hereafter GJ) method, this paper provides analytic solutions for the valuation and hedging of American options in a stochastic interest rate economy. The proposed method simplifies HSS's three-dimensional solution to a one-dimensional solution. The simulations verify that the proposed method is more efficient and accurate than the HSS (1997) method. We illustrate how the price, the delta, and the rho of an American option vary between the stochastic and non-stochastic interest rate models. The magnitude of this effect depends on the moneyness of the option, interest rates, volatilities of the underlying asset price and the bond price, as well as the correlation between them. This revised version was published online in June 2006 with corrections to the Cover Date.