Consumer durables,economics of information and public policy

The economic concept of the value of the last dollar spent is used to analyse market failure associated with the energy requirements of appliances. A model is developed which focuses on the information problem concerning the energy used to derive service flows from durables. Economic perspectives based upon the model are offered as to (1) why the private sector did not correct the problem, (2) why events in the 1970s prompted public intervention, and (3) how Energy Guide labels enhance the exchange process. But can consumers use the information contained on Energy Guide labels? The results of a study of high school students in the United States suggest that many consumers with problem solving skills comparable to these students would be unable to use the labels effectively. The study also indicated that effective education materials have been developed to help consumers use the labels.     

The neglect of the older consumer

This review of the literature concerning the older consumer discusses the reasons for the neglect of this large, lucrative and growing market by practitioners and academics in the fields of consumer affairs, marketing and gerontology. The authors consider the effects of continuing to ignore these ‘forgotten consumers’, and the possible benefits of recognizing and supplying the important market they constitute.     

Quality control in overseas apparel manufacturing

The purpose of this study was to identify quality control problems and causes of these problems associated with overseas apparel manufacturing. Apparel exporters and fabricators in seven Asian countries were visited. Through content analysis, four major problem categories were identified, which included construction, finishing, materials and fit. These problems appeared to be due to seven causes: (i) not following specifications, (ii) production method, (iii) management, (iv) facilities and equipment, (v) skills of workers, (vi) governmental structure and resource availability, and (vii) culture.     

RESIDETIAL ELECTRIC APPLIANCES: DETERMINANTS OF OWNERSHIP

The Appliance Stock Index, a composite index based on average wattages, was devised to represent the total number of appliances owned by a household. Eight indices for different categories of appliances were also developed. The effects of selected household characteristics on the ownership of appliances in terms of the developed indices were examined. Recommendations for future research were stated.     

Shaping Liquidity: On the Causal Effects of Voluntary Disclosure

Can managers influence the liquidity of their firms’ shares? We use plausibly exogenous variation in the supply of public information to show that firms actively shape their information environments by voluntarily disclosing more information than regulations mandate and that such efforts improve liquidity. Firms respond to an exogenous loss of public information by providing more timely and informative earnings guidance. Responses appear motivated by a desire to reduce information asymmetries between retail and institutional investors. Liquidity improves as a result and in turn increases firm value. This suggests that managers can causally influence their cost of capital via voluntary disclosure.     

Evaluating the Impact on Pharmacy Practices of a Law Requiring the Posting of Drug Prices

Posting price lists of most frequently purchased retail drugs under Section 4333 of the California Pharmaceutical Law offers consumers the opportunity to make more effective price comparisons. The same information also permits examination of the pricing structure of an entire local market, and it was just such an examination which was undertaken in the present study for 100 items on sale at 24 pharmacies in the northern region of the San Francisco Bay area. Wide price differentials were found to exist. Pharmacies charging higher prices were found to do so across their entire product line: the higher prices were not related to better service but primarily to monopolistic practices. It was also concluded that if posting has so far failed to bring about lower prices, it may be due to token compliance. The study examined computer simulation techniques for measuring the effectiveness of small, unsophisticated pharmaceutical price surveys, and the accuracy of such surveys was shown to be extremely high.