Food risk and the poor

This article consists of two parts. The first is a theoretical linkage of the risky performance of food production with the risky incomes of consumers, especially poor people, to result in what is termed “food risk”. The second features some empirical estimates intended to illustrate and quantify these conceptual risks.     

THE MARKET FOR FRANCHISE OPPORTUNITIES*

Franchised distribution accounts for a substantial proportion of retail sales each year. This form of vertical integration is frequently found in the accompaniment of parallel distribution through company-owned establishments. Similarly, franchise contracts are characterized by mixed compensation strategies. This paper contains empirical models of the market for franchise opportunities where incentives for mixed distribution and compensation strategies are evaluated.     

Functional equivalence in cross-cultural consumer behavior: Gift giving in Japan and the United States

The functional equivalence of products and consumer activities across cultures is a largely unexplored area. Yet, the lack of functional equivalence that exists may suggest the need for modification of some concepts and theories of consumer behavior. The study reported in this paper explores the functional equivalence that exists between U.S. and Japanese consumers in an important consumer activity—gift giving. The results suggest a lack of functional equivalence of this activity and illustrate how researchers should give explicit consideration to this issue in the development and testing of consumer concepts and models.     

Regulating Financial Services: How Severe are the Dangers?

The Financial Services Act has been variously criticised for obstructing competition and increasing operating costs for the producers of financial services in Britain. Robert R. Davis, Commissioner at the Commodity Futures Trading Commission in Washington DC, argues that there are 'public-goods' considerations to justify the imposition of the Act, and that its internal guarantees will check the growth of regulation. Len Ross, Principal Lecturer in Economics at the Polytechnic of Central London, maintains his earlier charge that the Act will do immense damage to British trade in financial services.     

INTEREST RATE RISK HEDGING FOR DUE-ON-SALE MORTGAGES WITH EARLY TERMINATION

The impact of random early termination on the interest rate elasticity and the related implications of hedging a mortgage security are examined. The common approach to computing duration using average mortgage life is shown to be biased and insufficient. Because the prepayment distributions of mortgages tend to have wide dispersions, substantial errors result from using average mortgage life. These results are also applicable to other financial obligations subject to prepayment.