Does crime deter South Africans from self-employment?

The very high crime rate in South African cities is often argued to be the main reason for the country's small share of business ownership and self-employment. This paper revisits this hypothesis. We estimate the effect of crime on business ownership and performance using a matched dataset of census, survey and police data. In contrast to previous studies, which take into account perceived rather than actual crime and often focus on specific geographic areas, we do not find robust evidence that high crime rates have a negative impact on business ownership. Even though our estimate of the effect of crime is statistically significant and negative, it is economically small. Further, we find no evidence for a negative effect of actual crime on sales, profits and investment of informal businesses. This may imply that the low share of business ownership and self-employment in South Africa must have other reasons. These results may also suggest that crime may not be in general a serious threat for small businesses in low and middle-income countries, however, this needs further empirical research.     

Patterns of psychological contract and their relationships to employee well-being and in-role performance at work: longitudinal evidence from university employees

Abstract

This study identified patterns of psychological contract (PC) and examined how these patterns were related to employee well-being and in-role performance over time (T1–T3). PC was measured at T1 based on cross-sectional data and well-being and performance longitudinally in two consecutive years (T1?T3) among university employees. Latent profile analysis revealed six different patterns of PC at T1. These were labelled (1) strong and balanced (n = 131), (2) average and balanced (n = 382), (3) employer-focused (n = 79), (4) employee-focused (n = 59), (5) balanced transactional (n = 224) and (6) employee-focused relational (n = 322). The longitudinal findings showed that the employees in PC patterns 1 and 2 experienced more vigour at T1–T3 than those in pattern 5, while the employees in pattern 2 reported higher proficiency at work at T1–T2 than those in pattern 6. Employee job satisfaction did not vary between patterns. Altogether, the PC pattern that included many different obligations on the part of both employee and employer seemed to result in better employee well-being and in-role performance.     

Consumer spirituality

ABSTRACT

Consumers increasingly turn to the marketplace in search of spiritual well-being. In this introduction to the special issue, we unpack the concept of consumer spirituality. We define consumer spirituality as the interrelated practices and processes engaged in when consuming market offerings (products, services, places) that yield 'spiritual utility'. The market offerings are purposely designed to quench consumers’ thirst for meaningful encounters with one’s inner self or a higher external power. We identify three vehicles – materiality, embodiment, and technology – that consumers engage with to access consumer spirituality. By unpacking the concept of consumer spirituality along three themes - (1) shaping markets for consumer spirituality, (2) the means for accessing consumer spirituality, and (3) making sense of and researching consumer spirituality - we provide a future research agenda to advance scholarly explorations of consumer spirituality and to facilitate a systematic development of this nascent body of literature in marketing and consumer research.     

Attenuation bias when measuring inventive performance

Most previous results on determinants of inventive performance are biased because inventive performance is measured with error. This measurement error causes attenuation bias. More specifically, for example age and education as drivers of patenting success have biased coefficients and too high standard errors when inventive performance is measured in short observation periods. The reason for measurement errors in inventive performance is that patents are typically applied for in waves.     

Surprise,Surprise. Ambient Media as Promotion Tool for Retailers

Ambient media evoke surprise with the aim of gaining the attention of consumers who are overexposed to traditional types of advertising. No study has yet considered the effects of unanticipated ambient media. To bridge this gap, the present article reports a field experiment entailing the manipulation of three types of ambient media that create different levels of surprise. The analysis combines observation data for 2,464 passersby, survey data from 305 respondents, and sales figures for 730 days. The results show that surprising ambient media draw attention, promote positive attitudes toward the ad, and stimulate word of mouth. Most importantly, ambient media increase purchase intention and sales revenue. Robustness checks ensure that the model is stable across several conditions, such as time of day or weather conditions. Follow-up studies further reveal that surprise elicits positive effects via two processes; the amplification of accompanying evaluations and the interplay of attention and incongruence resolution. The paper provides guidance for retailers wishing to design surprising ambient media that improve consumer attitudes and profitability.     

Revenue and welfare effects of financial sector VAT exemption

This paper provides an analysis of revenue and welfare effects associated with a VAT exemption of financial services, which is common among OECD countries. We follow a general equilibrium approach that considers effects of repealing the VAT exemption not only on consumer demand and intermediate-input demand for financial services, but takes account also of the VAT distortion of labor supply. We derive formal expressions for revenue and welfare effects, which can be quantified with a minimum of information about behavioral effects. Using VAT statistics as well as national accounts, we provide quantitative estimates of the effects of repealing the VAT exemption in Germany. Our baseline estimate indicates that tax revenues would increase by some €1.7 billion or 1.3 % of VAT revenues (excluding import turnover tax). Provided these revenue gains are used to finance a reduction in the VAT rate or in other distortive labor taxes our results indicate a modest welfare gain of about €1 billion, or 0.04 % of GDP.     

Special Issue on the Microeconomics of the New Economy

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