Accounting for heterogeneity in cross‐country bank efficiency comparisons

In this article, we investigate the significance of the heterogeneity problem in banking efficiency research by using stochastic frontier techniques. The cost frontier function is estimated on a sample of banks from new European Union members from Central and Eastern Europe and the Baltics (CEEB) for the 1998–2007 period. The results imply that environmental variables can only partly control for the presence of heterogeneity in the sample. By employing the ‘true’ random‐effects model as originally proposed by Greene (2005a, 2005b) , the unobserved heterogeneity that is typically associated with the complexity of the banking environment is additionally taken into account. This approach is found to result in considerably smaller differences in average country efficiency levels, which implies that CEEB countries represent a relatively homogeneous group in terms of bank performance.     

Analysing the fulfilment of service recovery paradox in retailing

The literature dealing with the Service Recovery Paradox (SRP) is vast, but some results are confusing and contradictory. In addition to this, scarce attention has been paid to service recovery in the context of retailing. This paper aims at verifying the compliance of the SRP in the context of retailing. Considering a sample of consumers that experienced a failure in the service delivered by a retailer and are very satisfied with the solution provided by the store employee, we test first the fulfilment of the SRP in the context of retailing. Secondly, we test the existence of significant differences in the customer satisfaction levels with the store before and after experiencing the problem considering several factors potentially influencing the impact of service recovery on customer satisfaction, therefore providing an encompassing analysis of the SRP and its main influencing variables, including some potential factors not previously explored. While we do not find evidence of the fulfilment of the SRP in retailing, differences in customer satisfaction before and after service recovery are highly related with consumer sociodemographic characteristics and shopping experience. Findings raise some practical implications.     

Local time and the pricing of time-dependent barrier options

A time-dependent double-barrier option is a derivative security that delivers the terminal value φ(S _T ) at expiry T if neither of the continuous time-dependent barriers b _±:[0,T]→ℝ₊ have been hit during the time interval [0,T]. Using a probabilistic approach, we obtain a decomposition of the barrier option price into the corresponding European option price minus the barrier premium for a wide class of payoff functions φ, barrier functions b _± and linear diffusions (S _t ) _t∈[0,T]. We show that the barrier premium can be expressed as a sum of integrals along the barriers b _± of the option’s deltas Δ _±:[0,T]→ℝ at the barriers and that the pair of functions (Δ ₊,Δ ₋) solves a system of Volterra integral equations of the first kind. We find a semi-analytic solution for this system in the case of constant double barriers and briefly discus a numerical algorithm for the time-dependent case.     

Emotionally Based Strategic Communications in the Process of Societal Deradicalization

Pervasiveness of extreme negative emotions, especially anger, hatred and humiliation, as well as negative appraisal style, has a significant impact on the process of societal radicalization. Dominance of such emotions, and the corresponding appraisal style, very often threaten societal security. Emotionally Based Strategic Communications (EBSC), proposed in this article, can be used as a communications strategy for mitigating negative and promoting positive emotions within societal groups exposed to radicalization processes. Essentially, EBSC as mechanisms of positive emotional regulation strategy are based on reshaping the (re)appraisal style of radicalized groups. Grounded in the appraisal theories of emotions, EBSC are entirely non-coercive, and applicable to a wide variety of groups. Such communications strategies are also extendible to Internet-based social media networks, opening new possibilities in deradicalization processes using sentiment analysis, cognitive computing, botnets and other ICT-based methods and techniques.     

Temperatures,cleanliness and food storage practises in domestic refrigerators in Serbia,Belgrade

Consumers’ knowledge about proper household practises during food handling and storage are deemed insufficient. Therefore, the aim of our study was to investigate the conditions of food storage in refrigerators (temperature, hygienic and storage conditions) and consumer knowledge about good practises. This study included 100 households from the Belgrade area. All participants were interviewed using a standardized questionnaire. The internal temperature of refrigerators was measured at three points: the top and bottom shelves and the refrigerator door. The average temperature in the refrigerators was 9.3°C. The average temperature recorded in the refrigerator doors was significantly higher (P < 0.01) than temperatures recorded on the top or bottom shelves. The age and design of refrigerators, and potential heat source near refrigerator can impact the refrigerator temperature. In 50% of the surveyed refrigerators, food storage practises were incorrect. More than a half (56%) of the surveyed consumers were aware of the recommended refrigerator temperature, but measured temperature in their refrigerators was considerably higher. The results from our study indicate that knowledge of recommended behaviour about good food safety practise do not always translate into practise in the home.     

Optimal Management of Environmental Externalities with Time Lags and Uncertainty

Many environmental externalities occur with time lags that can range from a few days to several centuries in length, and many of these externalities are also subject to uncertainty. In this paper, we examine the key features of an optimal policy to manage environmental externalities that are both lagged and stochastic. We develop a two-period, two-polluter model and obtain closed-form solutions for optimal emissions levels under different combinations of damage functions and stochastic processes. These solutions show that it is not obvious whether greater control should be exerted on polluters that generate externalities with longer lags or on polluters that generate externalities with shorter lags. We find that the optimal ranking of polluters with respect to the length of the time lag associated with their externality will depend on (a) the discount rate, (b) conditional expectations of future states of the polluted resource, (c) persistence of the pollutant, and (d) initial conditions.     

Nutrition in socioeconomic planning in LDCs

Nutrition should be seen as an integral part of the national planning effort. The author examines longterm determinants of food consumption in developing countries and shows that progress in improving nutrition is closely related to raising productivity and efficiency in the national economy. Optimum programmes in nutrition should be part of the design of appropriate social and economic development. This should be done at national and regional levels, with particular emphasis on the regional level.     

A New Cluster-Based Financial Vulnerability Indicator and Its Application to Household Stress Testing in Croatia

In this paper, we propose a new approach to household financial vulnerability analysis employing cluster technique in the identification of potentially vulnerable households. The cluster-based vulnerability indicator is applied to stress testing with the specific aim of assessing the extent to which the prolonged economic downturn following the Great Recession of 2008–9 hurt indebted households in Croatia. We compare the results based on the new approach with those based on traditional methods. Interest rate shocks have a stronger effect on household vulnerability in the traditional approach, whereas decrease in employment is found to be more disruptive in the cluster-based approach.