Village banking development model: FINCA Costa Rica

The village banking institution, Fundacion Integral Campesina (FINCA) in Costa Rica implements an innovative village banking model in its effort to create financially-sustainable solidarity groups. FINCA trains small community groups in a 22-module program to form Community Credit Enterprises (CCE). These small enterprises, or companies, permit members to buy shares as shareholders and generate capital to offer sustainable credit and business models. FINCA has great success with this model locally and regionally and wonders how best to use its gained experience to expand the program in order to continue creating sustainable businesses through training, business and microfinance services.     

The under-exploration issue in territorial networks: the moderating effect of the involvement of supporting organisations

The aim of this paper is to provide a better understanding of the effect of social networks on innovation through the analysis of territorial systems of firms. Although industrial districts enjoy a number of advantages, they also present some relevant limitations. We have labelled the difficulties that have been identified as the exploring concern. However, periphery actors, such as supporting organisations, playing the role of intermediary agents allow districts to escape from exploring restrictions, since they can monitor what is happening outside the district and, in consequence, the involvement of supporting organisations has a positive effect on innovation. The study reported in this paper is based on a sample of 154 manufacturing firms that belong to industrial districts in the Valencia Region (Spain). Findings support the positive association between local institution involvement and innovation of companies.     

Mainstreaming sustainable tourism with user-centred design

Abstract

Efforts to design and communicate sustainable tourism products have been based on the premise of explicit market demand for sustainability. This study tests whether it is possible to design mainstream sustainable tourism products that circumvent customer scrutiny of their sustainability features, by making sustainability implicit (as part of quality product design) and communicating hedonistic benefits instead. This is akin to using the peripheral route of communication, as explained in the Elaboration Likelihood Model, as the central route emphasises the consumer-driven message of overall quality of experience; the approach lessens the need for customers to be conscious of the sustainability consequences of their actions. The methodology proposed to achieve this is user-centred design (UCD), which places insights into customer needs, values and demands at the heart of new product design. We designed sustainable tourist activities using UCD and then appraised customer demand for them. Although this may seem counterintuitive, the results show that it can be more effective than traditional methods in mainstreaming sustainable activities, through choice-editing of unsustainable ones and normalising the appearance and communication of sustainability, provided a focus on sustainability is maintained by the product provider.     

Household internal and external electricity contract switching in EU countries

Using a representative sample of more than 13,000 households from eight countries in the European Union (EU), this article empirically studies the factors related to household electricity contract switching by distinguishing between internal switchers (households that switched contracts but stayed with the same supplier) from external switchers (households that switched to a new supplier). The econometric analysis includes individual preferences, household structural factors and socio-demographic characteristics, as well as electricity market characteristics. The study explicitly explores the role of risk and time preferences on switching behaviours, with risk and time preferences elicited through incentivized experiments as well as self-assessment scales. The main results suggest that internal and external switching are not related to the same factors, that risk and time preferences affect switching behaviours, and that renters are less likely to switch than homeowners; further, electricity market characteristics are found to affect household electricity contract switching.     

INEQUALITY AND HAPPINESS

In recent years there has been an accumulation of empirical evidence suggesting that individuals dislike inequality. The literature has built upon estimating the degree of this dislike as well as its causes. The use of self‐reported measures of satisfaction or well‐being as a proxy for utility has been one of the empirical strategies used to this end. In this survey, we review the papers that estimate or examine the relationship between inequality and self‐reported happiness to conclude that inequality correlates negatively with happiness in Western societies. Some of the surveyed papers identify particular sources of heterogeneity on preferences over inequality. The evidence for non‐Western societies is more mixed and less reliable. Notwithstanding that, trust in the institutions seems to play an important role in shaping the relationship between income inequality and subjective well‐being. We conclude with suggestions for further research.     

Consumption Externalities,Habit Formation and Equilibrium Efficiency*

We analyze the welfare properties of the competitive equilibrium in a capital accumulation model where individual preferences are subject to both habit formation and consumption spillovers. Using an additive specification for preferences, according to which the argument in the utility function is a linear combination of present and past values of own consumption and consumption spillovers, we analyze the circumstances under which these spillovers are a source of inefficiency. It is shown that consumption externalities have to interact with habits in order to generate an inefficient dynamic equilibrium. Finally, we characterize optimal tax policies aimed at restoring efficient decentralized paths.     

Commodity money in the presence of goods of heterogeneous quality

Summary The aim of this paper is to demonstrate that uncertainty about the quality of a particular commodity does not necessarily exclude it from emerging as commodity money. This is shown in the context of the model of a simple economy with specialized agents and decentralized trade described in Kiyotaki and Wright (1989). In order to derive this result, considerations about marketability of the different goods are taken into account.I wish to thank Pierre de Trenqualye for many helpful conversations and ideas. For their comments and suggestions I am also very grateful to G. de Fraja and P. J. Simmons. Special thanks are due to Randall Wright for his kind advice. The usual disclaimer applies. Financial support was provided by CIRIT (Generalitat de Catalunya, Spain).