The Role of the Advertising Agency in the Cultural Message Content of Advertisements: A Comparison of the Middle East and the United States

ABSTRACT

This study compared responses of advertising agencies located in the Middle East and the United States to an email survey examining their approach in designing advertisements. The survey examined whether the advertising agency incorporated area-specific cultural values and advertising appeals in the execution of their advertisements. Results indicate that indeed advertising agencies do use, or at least report to use, different cultural values and advertising appeals. Advertising agencies in the Middle East tend to focus more on filial obedience, customs and traditions, loyalty to one's group, honor, and patience. In addition, agencies in the Middle East reported that they tended to portray women in a more modest fashion than their counterparts in the United States.     

An investigation into the demand for alcoholic beverages in Canada: a choice between the almost ideal and the Rotterdam models

In this article I investigate the historical pattern of interactions in the demand for three categories of alcoholic beverages in Canada, using both the differential Almost Ideal and the differential Rotterdam demand systems. I evaluate these models based on several decision criteria including model encompassment (based on the J-test), structural stability, conformity with demand theory and the credibility of the estimated price and income responses, in an attempt to determine which of these models is better suited for explaining the demand for alcoholic beverages. The results reveal that both models satisfy the restrictions of demand theory and of structural stability but the Rotterdam model is preferable on grounds of the remaining two criteria.     

Finance and poverty: Evidence from fixed effect vector decomposition

In this paper we attempt to distinguish the direct effect of financial development on poverty reduction from its indirect effect through economic growth. Using an efficient estimator called fixed effect vector decomposition (FEVD) we employ a set of panel data from 54 developing countries for the period 1993–2004. Our results indicate that on average financial development is conducive for poverty reduction but the instability accompanying financial development is detrimental to the poor. The major policy recommendations suggested by the paper indicate that financial sector reforms should be directed at easing credit restrictions while taking into consideration the effects of financial instability on the poor.     

The association between non-financial performance measures in executive compensation contracts and earnings management

Executive compensation, especially cash bonus compensation, has come under fire by the Securities and Exchange Commission (SEC), the US Federal government, and the media for its role in the current economic crisis. Specifically, the SEC has argued that some compensation packages provide incentives for risk-taking that may undermine shareholder value over the long-term. Short-term incentive payments to executives in the form of cash bonuses are mostly contingent on reaching targets of accounting-related measures or financial performance measures (FPMs). However, the incentives from these payments may lead to accrual manipulation and earnings management (EM). Alternative measures are non-financial performance measures (NFPMs). We expect that firms that employ NFPMs in bonus contracts will have a lower prevalence of EM, since these measures tend to focus executives on the long-term. In this paper, we examine the type of performance measures used by firms in the S&;P 500 index in their cash bonus compensation. We find that firms that use both FPMs and NFPMs have lower discretionary accruals compared to firms that use only FPMs, consistent with lower income-increasing EM. However, we do not find evidence of a reduction in EM behavior using the incidence of meeting or just beating analyst earnings benchmarks, another common EM proxy. In additional tests on a subset of firms with equity offerings, in which incentives for income-increasing manipulation are likely high, we find that firms with NFPMs have lower discretionary accruals. The implication is that NFPMs can be used in compensation contracts to reduce EM behavior and mitigate erroneous executive compensation. This is important to investors as well as regulators, especially in light of the recent debate on compensation reform.     

Weighing what’s practical: proxy means tests for targeting food subsidies in Egypt

Despite achieving a significant cost reduction over the past two decades, the absolute cost of food subsidies in Egypt is still high relative to the benefits received by the poor. There is scope for better targeting these food subsidies, in particular for targeting cooking oil and sugar ration cards, both because reforms in this area are perceived to be far less politically sensitive than adjusting subsidy policy for bread and wheat flour and because higher income groups presently receive a significant percentage of the benefits. Targeting the high-subsidy green ration cards to the poor and the low-subsidy red ration cards to the nonpoor will require identification of both poor and nonpoor households. An International Food Policy Research Institute research team in Egypt, in collaboration with the Egyptian Ministry of Trade and Supply, developed a proxy means test for targeting ration cards. The paper describes the process of moving from the optimal income-predicting model to the final model that was both administratively and politically feasible. An ex-ante evaluation of the levels of accuracy of the proxy means testing model indicates that the model performs quite well in predicting the needy and nonneedy households. An effective and full implementation of this targeting method would increase the equity in the ration card food subsidy system, and, at the same time, the total budgetary costs of rationed food subsidies would decline. Moreover, the experience gained under this reform would facilitate targeting future social interventions to reduce and prevent poverty in Egypt.     

Preference uncertainty in contingent valuation

In this paper, the results of empirical studies that applied two widely used methods - numerical certainty scale (NCS) and polychotmous choice (PC) - for estimating preference uncertainty adjusted willingness to pay (WTP) in contingent valuation (CV), are summarized. For this review, a number of conclusions are reached. First, there is a lack of consensus about which method is more appropriate for measuring preference uncertainty. Second, although preference uncertainty information has been found useful in detecting the incidence of hypothetical bias in CV studies, a consensus about a standard certainty threshold (or treatment mechanism) at which hypothetical behaviour converges to real behaviour is yet to emerge. Third, insufficient empirical evidence exists about the causal relationship between preference uncertainty scores and the theoretically expected explanatory variables. Finally, the preference uncertainty adjusted PC and NCS models fail to provide a consistent and more efficient welfare estimate compared to the conventional dichotomous choice certainty model.     

Foreign direct investments in developing countries: The openness hypothesis and policy implications

A cross-sectional time series model was estimated to explain the influence of the openness of an economy and political instability on gross inflow of foreign direct investments into developing countries. Results indicate positive relation between the openness of developing economies and the inflow of foreign direct investments and negative relation between political instability and the inflow of foreign direct investments. Research findings and policy implications are presented.     

The Influence of Cultural Orientation and Communication Style on Consumer Behavior: A Comparative Study of the Arab World and the United States

ABSTRACT

Hall (1976) argued that “Culture is communication and communication is culture” (p. 169). Because cultures are dynamic, they are subject to change due to a variety of influences, and while cultural change is usually slow and takes years or sometimes generations to materialize, the authors believe the new media technologies may shorten this time of change. The purpose of this report is to examine the cultural orientation of the Arab world and the communication styles used there as they relate to advertising persuasion and compare it to that of the United States. The results suggested the some changes in the well-known Arabic culture may be taking place.     

Have structural changes eliminated the out-of-sample ability of financial variables to forecast real activity after the mid-1980s? Evidence from the Canadian economy

This article evaluates how consistently reliable the information content of individual financial variables is for Canada's future output growth. We estimate the timing of structural changes in linear growth models and check robustness to specification changes, multiple breaks, and business cycle asymmetry. Our simulated out-of-sample forecast evaluation strategy, using the Mean Square Error F-type (MSE-F) and the new encompassing (ENC-NEW) tests, shows that the leading information content of most financial variables for Canada's future Gross Domestic Product (GDP) growth has deteriorated substantially after 1984:04, but the 1–3-year term spread exhibits a consistently reliable predictive ability at the 1 and 2 quarter horizons and has significant forecasting ability at the 8 quarter horizon. Also, the real M1 money growth has regained its ability to forecast output growth since 1991:01.     

Higher education enrolment in Bangladesh: does the wage premium matter?

This paper empirically examines the decisions of individuals to enrol in a course of tertiary education in Bangladesh, focussing on the period 1999 to 2009. Of particular interest is whether the wage premium―the gap in wage earnings between tertiary and secondary school graduates―is associated with decisions to enrol in tertiary education. The analytical framework used here is the human capital theory, which is tested through a discrete choice model. Using data from Bangladesh Labour Force Surveys, empirical results suggest that the wage premium is positively associated with decisions of males to enrol in tertiary education, while for females there appears to be no such association. A battery of robustness tests supports our results.