Information Disclosure,Cognitive Biases,and Payday Borrowing

Can psychology‐guided information disclosure induce borrowers to lower their use of high‐cost debt? In a field experiment at payday stores, we find that information that makes people think less narrowly (over time) about finance costs results in less borrowing. In particular, reinforcing the adding‐up dollar fees incurred when rolling over loans reduces the take‐up of future payday loans by 11% in the subsequent 4 months. Although we remain agnostic as to the overall sufficiency of better disclosure policy to “remedy” payday borrowing, we cast the 11% reduction in borrowing in light of the relative low cost of this policy.     

The Signaling Effect of Tax Policy

The paper focuses on the signaling value of a tax when agents are less informed than the government on the effect of their consumption. The policy making process is analyzed as a game in which the government wants to influence consumers' behaviors through tax policy, consumers being rational and Bayesian. The marginal cost of public funds induces the government to provide biased information to pursue budgetary objectives. We analyze the tax distortion that is required for credibility.     

IMPROVING LABOR PRODUCTIVITY: HUMAN RESOURCE MANAGEMENT POLICIES DO MATTER

Despite the consistency with which the theoretical and normative connections between human resource management practices and firm-level performance outcomes are made, empirical studies that link the two are sparse. This paper presents results from a study of 319 business units that addresses this gap. Hypotheses are derived from a resource-based perspective on strategy. Positive and significant effects on labor productivity are found for organizations that utilize more sophisticated human resource planning, recruitment, and selection strategies. These effects are particularly pronounced in the case of capital-intensive organizations.     

Consumer Perceptions of Advertising as Misleading

A mail survey was conducted of 314 residents of two California cities to measure consumer perception of the prevalence of misleading advertising. Information was obtained concerning the extent of misleading advertising in the various media, for 30 products and services and for three age groups. The findings indicate that over half of the sample viewed “most” or “all” mail and telephone advertising as misleading, and that 38 percent of the respondents regarded “most” or “all” television advertising as misleading. Newspaper advertising was considered the most credible. Findings indicate that “most” or “all” advertising for products and services was viewed as misleading by 30 percent of the respondents. Findings for actions taken concerning misleading advertising indicate that nearly half of the sample had registered a complaint to the store or person advertising and that 29 percent of the respondents had complained to a manufacturer. Also, findings for the age groups indicate that two out of three respondents regarded “most” or “all” advertising directed at children as seriously misleading. Advertising directed at senior citizens was viewed as seriously misleading by 45 percent of the sample, and advertising directed at young and middle-aged adults was viewed as only slightly less misleading.     

Dairy product consumption in South Korea

The per capita daily consumption of dairy products increased approximately 2450% in South Korea from 1969 to 1987. The purpose of the present study was to determine the frequency with which urban South Koreans consume 10 common dairy products, and to find the socio-economic group most responsible for the increase in dairy product consumption. Data were collected on the dietary patterns and socio-economic backgrounds of 923 women, 880 children and 772 men in urban areas. This study showed that seven of 10 dairy products investigated were consumed evenly by both sexes, all age groups and income levels. However, three recently-introduced products (i.e. cheese, ice cream and butter) were found to be consumed most frequently by young Koreans in the high income level.     

Banking Deregulation and Industry Structure: Evidence from the French Banking Reforms of 1985

We investigate how the deregulation of the French banking industry in the 1980s affected the real behavior of firms and the structure and dynamics of product markets. Following deregulation, banks are less willing to bail out poorly performing firms and firms in the more bank‐dependent sectors are more likely to undertake restructuring activities. At the industry level, we observe an increase in asset and job reallocation, an improvement in allocative efficiency across firms, and a decline in concentration. Overall, these findings support the view that a more efficient banking sector helps foster a Schumpeterian process of “creative destruction.”     

Market Coordination and Social Differentiation: A Comparison of Cotton-Producing Households in Tanzania and Zimbabwe

This paper compares findings from farm surveys conducted in Zimbabwe and Tanzania in 2001. It sets out to answer why some cotton-producing households generate comparatively higher levels of total cotton output, and conversely why some households generate lower output. In the Tanzanian sample, variations in respondents' cotton sales revolve entirely around respondents' access to cropping land and possession of draught power, while observed differences in the Zimbabwean case are based on a combination of ownership-related assets and respondents' access to manufactured inputs. At the same time, the extent of differences in volumes of cotton sales between the top and bottom quintiles is significantly higher in the Tanzanian survey than in the Zimbabwean one. This pattern becomes even more evident when comparing the performance of the bottom quintiles in the two samples. Against this background, the paper suggests that successful forms of market coordination may not only contribute to better 'system performance' but also to fewer differences between cotton-producing households in terms of cotton output and to higher incomes from cotton production.