Choosing and using payment instruments: evidence from German microdata

Germans are still very fond of using cash. Of all direct payments transactions in 2008, cash accounted for an astounding 82 % in terms of number and for 58 % in terms of value. With a dataset that combines transaction information with survey data on payment behaviour of German consumers, we shed light on how individuals decide on their cash usage. We employ a two-stage empirical framework which jointly explains payment card ownership and the use of cash. Our results indicate that cash usage is compatible with systematic economic decision making. Consumers decide on the adoption of payment cards and then use available payment media according to transaction characteristics, the relative costs of cash and card usage, socio-demographic characteristics and their assessment of payment instruments’ characteristics. Importantly, older consumers use significantly more cash than younger consumers. We show that this difference in payment behaviour is not attributable to age as such but largely to differences in the characteristics of older and younger consumers. This suggests that the high cash intensity of older consumers cannot fully be attributed to the role of habit or to their slow adoption to new payment technologies.     

An exploration of consumers’ experiences in physical stores: comparing consumers’ and retailers’ perspectives in past and present time

Abstract

In this paper, we explore consumers’ in-store experiences and their components, from both a consumer and retailer perspective. This is a replication of a study we performed in 2006 and thus we also examine how the role of the physical store has changed over the last decade. We use the Critical Incident Technique (CIT) to improve our understanding of consumers’ in-store experiences. Moreover, we conduct in-depth interviews with Swedish retailers to achieve an understanding of how retailers use aspects of the store environment to enhance the consumer experience. Interestingly, our results suggest that consumers’ in-store experiences to a large extent are created by the same aspects today as ten years ago (e.g. personnel, layout, atmosphere). Furthermore, while retailers today emphasize the importance of fulfilling new and more advanced consumer demands, they often still accentuate the weight and use of traditional values (e.g. personnel and layout) ahead of advanced technology.     

CSR Business as Usual? The Case of the Tobacco Industry

Tobacco companies have started to position themselves as good corporate citizens. The effort towards CSR engagement in the tobacco industry is not only heavily criticized by anti-tobacco NGOs. Some opponents such as the the World Health Organization have even categorically questioned the possibility of social responsibility in the tobacco industry. The paper will demonstrate that the deep distrust towards tobacco companies is linked to the lethal character of their products and the dubious behavior of their representatives in recent decades. As a result, tobacco companies are not in the CSR business in the strict sense. Key aspects of mainstream CSR theory and practice such as corporate philanthropy, stakeholder collaboration, CSR reporting and self-regulation, are demonstrated to be ineffective or even counterproductive in the tobacco industry. Building upon the terminology used in the leadership literature, the paper proposes to differentiate between transactional and transformational CSR arguing that tobacco companies can only operate on a transactional level. As a consequence, corporate responsibility in the tobacco industry is based upon a much thinner approach to CSR and has to be conceptualized with a focus on transactional integrity across the tobacco supply chain. Guido Palazzo is Assistant Professor for Business Ethics at the University of Lausanne (Switzerland). He graduated in Business Administration at the University of Bamberg (Germany) and earned his PhD in Political Philosophy (1999) from the University of Marburg (Germany). His research interests are in Corporate Social Responsibility, Corporate Branding, Democratic Theory, and Organizational Ethics. Ulf Richter is a doctoral student at the University of Lausanne. He is writing his thesis on Corporate Social Responsibility, conceptualizing the concept from a multidisciplinary perspective. He has studied in Germany, Peru and the US, and graduated from the European Business School, Oestrich-Winkel, majoring in International Management and Real Estate.     

Solving and Testing for Regressor-Error (in)Dependence When no Instrumental Variables are Available: With New Evidence for the Effect of Education on Income

This paper has two main contributions. Firstly, we introduce a new approach, the latent instrumental variables (LIV) method, to estimate regression coefficients consistently in a simple linear regression model where regressor-error correlations (endogeneity) are likely to be present. The LIV method utilizes a discrete latent variable model that accounts for dependencies between regressors and the error term. As a result, additional ‘valid’ observed instrumental variables are not required. Furthermore, we propose a specification test based on Hausman (1978) to test for these regressor-error correlations. A simulation study demonstrates that the LIV method yields consistent estimates and the proposed test-statistic has reasonable power over a wide range of regressor-error correlations and several distributions of the instruments. Secondly, the LIV method is used to re-visit the relationship between education and income based on previously published data. Data from three studies are re-analyzed. We examine the effect of education on income, where the variable ‘education’ is potentially endogenous due to omitted ‘ability’ or other causes. In all three applications, we find an upward bias in the OLS estimates of approximately 7%. Our conclusions agree closely with recent results obtained in studies with twins that find an upward bias in OLS of about 10% (Card, 1999). We also show that for each of the three datasets the classical IV estimates for the return to education point to biases in OLS that are not consistent in terms of size and magnitude. Our conclusion is that LIV estimates are preferable to the classical IV estimates in understanding the effects of education on income. JEL Classification: C12, C13, C21, J3, M3     

Developing CSR in retail–supplier relationships: a stakeholder interaction approach

The purpose of this research is to explore how a stakeholder interaction perspective can add to the understanding of the dynamics of the process of corporate social responsibility (CSR) development in retail buyer–supplier relationships. Firstly, we find that interaction with suppliers and other stakeholders seems to have a pivotal role in the development towards sustainable retail supply chains. Secondly, and by addressing the phases of initiation, implementation and maturation of CSR development, we find that the role and intensity of interaction in stakeholder interaction changes over time and that the salience of particular stakeholders can be pivotal in the phases of the process of CSR development. Thirdly, we find that there is not necessarily one active and one passive party in the stakeholder interaction. Although suppliers in developing countries are typically asked to follow codes of conducts of retailers, suppliers are also acting and taking initiatives, and organizing themselves to better meet the demands on CSR.