PRODUCT QUALITY AND MARKET SIZE*

Do larger markets offer better products? The question has implications for theories of cities and theories of market organization. We document that in the restaurant industry, where quality is produced largely with variable costs, the range of qualities on offer increases in market size. In daily newspapers, where quality is produced with fixed costs, the average quality of products increases with market size, but the market does not offer much additional variety as it grows large. These results are consistent with IO theories of endogenous product quality and with theories that emphasize the consumption advantages of cities.     

Comparative study of phosphate and non-phosphate detergents

A comparison of three different detergents was made by evaluating their properties of soil removal, soil redeposition and calcium carbonate deposition. The detergents included a phosphate granular detergent, a non-phosphate, carbonate built granular detergent and an unbuilt liquid detergent. The local water conditions were moderately hard and clay type soils were used. Detergency was evaluated on the basis of both visual and instrumental colour changes. In effecting soil removal, clay stained fabrics laundered with the phosphate detergent retained only a small amount of soil, while fabrics laundered with the two non-phosphate detergents showed heavier staining. In preventing soil redeposition, the phosphate detergent produced almost no visible redeposition; the unbuilt and carbonate built detergents ranked correspondingly lower. In assessing calcium carbonate deposition, the phosphate and unbuilt detergents showed little or no change, while the carbonate detergent continued to build up deposits with laundering. In summary, the phosphate detergent ranked highest in overall performance, with correspondingly lesser performance from the unbuilt and carbonate detergents.     

Disclosure Quality and the Excess Value of Diversification

For a sample of U.S. firm years from 1980 through 1996 we document a positive association between the excess value of diversification as defined by Berger and Ofek [1995] and security analyst ratings of voluntary disclosure as developed by the Association for Investment Management and Research. We also examine an alternative proxy for disclosure quality that captures the degree of segment disaggregation and document a positive association between this measure and excess value. Our results are robust to controls for firm performance and information environment. Taken together, these phenomena suggest that disclosure plays a monitoring role in disciplining management's investment decisions. However, tests of the association between disclosure and the value of firms' investment spending yield mixed results.     

Loan Commitment Contracts,Terms of Lending,and Credit Allocation

This paper analyzes the structure of loan commitment contracts and the interrelationships among their component parameters. Lenders offer borrowers a set of loan “packages,” from which the latter may choose that “package” found to be most appealing. Borrowers may “trade off” changes in any loan parameter in exchange for other adjustments. The borrower, at this time, may “purchase” a larger credit ration for a price. Supporting empirical evidence is presented.     

Determinants of Household Expenditures on Alcohol

This paper examines the determinants of household alcohol expenditures by using a nonnormal and heteroscedastic double-hurdle model to accommodate zero observations in the sample. The model is a generalization of the double-hurdle model estimated in previous studies of alcohol consumption. We also examine the effects of explanatory variables by calculating and decomposing the elasticities. Findings support the use of a more generalized error distribution. Income, region, education, and household demographics are among the significant determinants of alcohol expenditures.     

Does Vanity Describe Other Cultures? A Cross‐Cultural Examination of the Vanity Scale

Vanity is a psychological construct that describes a person's excessive concern with physical appearance or achievement. A scale, recently developed to measure this construct, has been psychometrically validated using data from U.S. respondents. The goal of this paper is to determine if this scale can be used cross‐culturally. If the scale has cross‐cultural applicability, it can be used as a counseling device to guide and alert individuals to certain tendencies. The scale also can be used to track foreign cultures as they adopt a consumerism ethos more aligned to Western consumer culture. Based on data from 475 young adults in China, India, New Zealand, and the U.S., the scale was found to have similar dimensionality and factor structure, internal consistency, discriminant validity, and metric invariance. Implications and future directions for research are discussed.     

Local Consumer Information Systems for Services: A Test

This paper reports on a survey of consumers' experiences with local services firms that was conducted by the Montgomery County, Maryland Office of Consumer Affairs and supported by an FTC grant. Over 1,200 individuals evaluated auto repair, heating and air conditioning, home remodeling, roofing, and insulation contracting firms on three dimensions: satisfaction with work performed, price in relation to quality, and strength of recommendation. Results for the heating and air conditioning category were published and widely disseminated.