Facing a Biased Adviser While Choosing a Retirement Plan: The Impact of Financial Literacy and Fair Disclosure

Buying a retirement saving plan in Israel involves meeting with an agent whose interests may differ from those of his or her customers. The aim of the present study was to explore the effect of the advice given by the agent, along with that of two further factors: a fair disclosure statement regarding the agent's conflict of interest, and the customer's degree of financial literacy. Two experiments conducted among undergraduate students in Israel showed that customers mostly follow the agent's recommendation, even against their best interest, and despite the presence of a fair disclosure statement. Only participants with high financial literacy, who received a disclosure statement, did examine the alternatives closely and rejected the advice when the recommendation was damaging. We also ruled out the existence of a negative psychological reactance response to a disclosure statement that would work to the detriment of financially literate participants.     

A Review of “Raj Rhapsodies: tourism,heritage and the seduction of history”

Many researchers have used stage-based and life cycle models to describe destination development and local residents’ changing reactions to tourism. Typically, they report that resident attitudes towards tourism, and its perceived outcomes for host populations, worsen with increasing experience and involvement in tourism. However, stage-based models traditionally focus on mature destinations in developed countries. In contrast, scholarship on ecotourism derives largely from developing countries and suggests that increased participation leads to more favourable outcomes and attitudes towards tourism. This paper breaks new ground by exploring attitudes to tourism in an emerging destination in a developing country and linking that exploration to a revised stage-based model. It uses ethnographic data to evaluate responses to recent tourism development in Nicaragua. While findings are complex and do not support a linear relationship between the level of experience in tourism and the attitudes of local residents, they do indicate a relationship between these two theoretical perspectives that can be used to inform one another. Notably, workers in tourism are more critical of the tourism industry than residents are. Important amendments to stage-based models are suggested that will assist tourism planners with the creation of more sustainable, community-centred development.     

Strategic Responses: A Survey Experiment on Opposition to Pension Reforms*

The responses given in opinion polls on future policy reforms reflect both subjective expectations and preferences. We disentangle these factors using data from a controlled survey experiment conducted in Germany. At the time of the experiment, an increased retirement age had been proposed as part of a pension reform. Thus, the survey respondents faced an incentive to give biased responses. By understating their expected work ability at the age of retirement, they could make the increase of the retirement age a less attractive policy option. We find evidence for such strategic response behavior, and this strategic bias appears to be stronger in former communist East Germany.     

Sign reversal in LIVE treatment effect estimates: The effect of vocational training on unemployment duration

We use administrative records in Israel to identify the treatment effect of vocational training for the unemployed on the duration of unemployment. We randomize training using data on the availability of courses in and around the time of becoming unemployed. This assumes that the timing of entry into unemployment is random, and course availability around the time of entry is independent of current labor market conditions. According to naïve estimators, which ignore self-selectivity, training reduces unemployment durations. The same applies to linear (IV) estimators, which control for self-selectivity. However, the opposite is found when non-linear IV estimators are used, i.e. training prolongs unemployment durations. Sign reversal depends on how the first stage is specified. A non-nested test indicates that the nonlinear estimate of the treatment effect is preferable to its linear counterpart, in which case training prolongs unemployment spells.     

The dynamics of wealth,profit, and sustainable advantage

This paper shows how idiosyncratic resources can drive sustained profitability and persistent heterogeneity under competitive conditions. Generic inputs purchased in the market become idiosyncratic resources as the result of firms' investments in customization. Analytically, we show how heterogeneous firms coexist in equilibrium as a function of customization costs. Computationally, we show that sustainable profits can emerge without ‘monopolistic’ imperfections. We consider how capability heterogeneity, resource customization cost, and ease of expansion interact to drive short-run and sustainable profits. Our results illustrate that sustainable profits may represent a small part of the total wealth created over time by a firm or industry, and that changes in factors shaping a sector's evolutionary trajectory may be more important than changes in factors that determine profits' ultimate sustainability. Copyright © 2012 John Wiley & Sons, Ltd.     

Economic restructuring and state intervention in Holdenist suburbia: understanding urban poverty in Australia

From the mid-1940s to the mid-1960s a particular conjuncture of capital-state relations formed in Australia, leading to the development of a distinctive urban form —‘Holdenist suburbia’: built by government; of a large scale and uniform appearance; constructed of poor quality, cheap materials; home to relatively high percentages of public renters; comprised of predominantly working-class families; adjacent to manufacturing employment; and stigmatized. An examination of one such Holdenist suburban estate in 1966 and 1991 illustrates how certain aspects of economic restructuring and state intervention have forged such spaces as sites of urban poverty. With the broad aim of connecting Australian urban studies to ongoing international debates about the nature of contemporary urban poverty, it is noted that distinctive characteristics of Australian urban and welfare state development render the application of concepts derived from different cultural settings problematic. This paper makes two points. First, a ‘finer-combed’ interpretation of Australian postwar suburban development is required to delineate the role of the state in shaping a particular urban form during this period — the Holdenist suburban form. Second, this delineation is particularly important to understanding contemporary urban poverty in Australia, for the social provisions of state policy have, in contradictory fashion, both prevented the full development of outcast ghettos (Marcuse, 1996) and, in conjunction with the processes of economic restructuring, forged sites of urban poverty.