Non-Conscious Influences on Consumer Choice

While consumer choice research has dedicated considerable research attention to aspects of choice that are deliberative and conscious, only limited attention has been paid to aspects of choice that occur outside of conscious awareness. We review relevant research that suggests that consumer choice is a mix of conscious and nonconscious influences, and argue that the degree to which nonconscious influences affect choice is much greater than many choice researchers believe. Across a series of research domains, these influences are found to include stimulus that are not consciously perceived by the consumer, nonconscious downstream effects of a consciously perceived stimuli or thought process, and decision processes that occur entirely outside of awareness.     

Framing Effects in Risk Perceptions of Aids

This paper examines a boundary condition of the ease-of-retrieval effect shown to affect risk perceptions of AIDS (Raghubir and Menon 1998; R&M). R&M had shown that when AIDS-related behaviors were difficult (vs. easy) to recall, people reduced their estimates of contracting AIDS, based on an inference that the more difficult an item was to recall, the smaller the population of behavioral experiences in memory, from which it was drawn. In this paper, we show that when people can attribute recall difficulty to task contingencies (i.e., the difficulty is not informative about their own behavioral experience), the content of the information recalled from memory, rather than the ease with which such information was recalled, affects judgments. In such a scenario, framing the recall task as one that causes AIDS leads to perceptions of higher risk versus one that prevents AIDS. Theoretically, these results show that the use of information accessibility as a cue is based on inferences about the population from which the information is drawn. Managerially, the results suggest that risk perceptions are based on contextual cues that affect content and accessibility of memory-based information.     

THE QUALITY AND EFFICIENCY OF PRIVATE AND PUBLIC EDUCATION: A CASE-STUDY OF URBAN INDIA†

Recent evidence of a substantial link between quality of schooling and individual productivity suggests that, from an economic efficiency perspective, quality aspects of education deserve attention. This paper presents empirical evidence on the relative quality and efficiency of private and government-funded schools in urban India, using data from Uttar Pradesh. The results suggest that standardizing for home background and controlling for sample selectivity greatly reduces the raw average achievement advantage of private school students over public school students, but does not wipe it out. Private schools' standardized achievement advantage (or better quality) is complemented by their lower unit costs to enable them to be more efficient. The results support much of the existing international evidence on the relative efficiency of private and public schools.     

Mandatory Corporate Social Responsibility: The Indian experience

The question we raise is what to do when companies fail to keep pace with societal expectations with respect to their corporate social responsibility (CSR). The response of the Indian government was to make it mandatory for large corporations to spend funds on CSR activities. In this paper, we investigate the success of this legislation both for the companies and the intended beneficiaries. We find that the impact of the legislation has fallen short of expectations both in terms of the volume of CSR expenditure generated and the activities to which it has been directed. In particular, we find that the legislation has had a negative corporate profitability which can impact on the willingness of companies to spend in this area. We conclude that greater care must be taken when implementing mandatory CSR if it is to be effective.     

Labour Market Flexibility,Wages and Incomes in Sub‐Saharan Africa in the 1990s

Abstract: This paper provides an overview of how African labour markets have performed in the 1990s. It is argued that the failure of African labour markets to create good paying jobs has resulted in excess labour supply in the form of either open unemployment or a growing self‐employment sector. One explanation for this outcome is a lack of labour market ‘flexibility’ keeping formal sector wages above their equilibrium level and restricting job creation. We identify three attributes of labour market flexibility. First, whether real wages decline over time; secondly, the tendency for wages to adjust in the face of unemployment; and thirdly, the extent of wage differentials between sectors and/or firms of various size. Recent research shows that real wages in Africa during the 1990s may have been more downwardly flexible than previously thought and have been surprisingly responsive to unemployment rates, yet large wage differentials between formal and informal sector firms remain. This third sense of the term ‘inflexibility’ can explain a common factor across diverse African economies — the high income divide between those working in large firms and those not. Those working in the thriving self‐employment sector in Ghana have something in common with the unemployed in South Africa — both have very low income opportunities relative to those in large firms.     

Tariff Rates, Tariff Revenue, and Tariff Reform: Some New Facts

This article compares the statutory ad valorem tariff rates(official rates) with the ratio of tariff revenues to importvalues (collected rates) for Jamaica, Kenya, and Pakistan. Itidentifies four general features of the tariff codes, considerswhether these features apply to all developing countries, anddiscusses four implications of these features for tariff reform.First, the collected rate for any given item in the tariff codeis only weakly related to the official rate for that item. Second,the variation of collected rates around the official rate increaseswith the level of the official rate. Third, the collected rates,on average, increase much less than the official rates. Fourth,the relation between official rates and collected rates is nonlinear,because the slope is lower at higher levels of the officialrate.     

Teacher unions, teacher pay and student performance in India: A pupil fixed effects approach

This paper examines the relationship between teacher unionization, student achievement and teachers' pay using a cross-section of data from private schools in India. We use differences in student mark across subjects to identify within-pupil variation in achievement and find that union membership of the teacher is associated with reduced pupil achievement. We find no evidence this could be due to the unobservables not controlled for by this procedure. A school fixed effects equation of teacher pay shows that union membership raises pay and in this case too we find that remaining unobservables are unlikely to explain this outcome. We discuss the policy implications of the findings and show that the effectiveness of teacher credentials in improving teacher performance is linked to unionization.     

The impact of formal financial inclusion on informal financial intermediation and cash preference: evidence from Africa

This paper examines the effect of formal financial intermediation (inclusion) on informal financial intermediation and the use of cash for economic activities. Using data from the Global Findex 2014, we examine whether the use of formal financial intermediaries reduces cash preference and the use of informal financial intermediaries. Our empirical results show that informal financial intermediation is positively associated with formal financial inclusion. This indicates that the relationship between informal and formal financial intermediation is complementary rather than a trade-off, which demonstrates the importance of informal finance plays in the financial system of Africa. Moreover, the use of formal financial intermediaries significantly reduces the preference for holding cash, implying that a robust financial system infrastructure has the potential of mobilizing excess liquidity in the informal economy of Africa for growth and development.     

Technology and Firm Size-Wage Differentials in Colombia, Mexico, and Taiwan (China)

In many economies, studies have found large wage differentialsnot accounted for by work force characteristics, collectivebargaining, or market power. Researchers attribute these differentialsto either unobserved worker quality or pay incentives designedto elicit worker effort. This article finds empirical supportfor an alternative explanation: These wage differentials resultfrom firms' technology-generating activities. Using firm-leveldata from Colombia, Mexico, and Taiwan (China), the articlecompares the effects of research and development, worker training,and exports by employers on the wages of skilled and unskilledworkers. The results suggest that technology investments leadto large wage premiums for skilled workers but not for unskilledworkers. These wage premiums are primarily the result of investmentsin research and development and in training, while exportingis relatively less important except in Colombia.     

Race and the Incidence of Unemployment in South Africa

South Africa's unemployment rate is one of the highest in the world, and it has important distributional implications. The paper examines both entry into and duration of unemployment using data for the mid‐1990s. A probit model of unemployment shows an important role for race, education, age, gender, home‐ownership, location, and numerous other variables, all of which have plausible explanations. The large race gap in unemployment is explored further by means of a decomposition analysis akin to that normally used to analyze wage discrimination. There remains a substantial residual which might represent unobserved characteristics, such as quality of education, or discrimination.