Trust in financial services: Retrospect and prospect

Fostering and maintaining high levels of trust in the financial services sector is seen as crucial because of the characteristics of many financial service and in order to promote consumer engagement in the sector. In this article, we report evidence from a body of work and other commentary to provide an insight into trends in consumer trust in the sector as a whole, in comparison with other organisations and how different types of financial services provider have performed relative to each other. We show that the financial services sector as a whole is trusted more than some comparator institutions, and that aggregate levels of trust in the sector have fluctuated a relatively small amount subsequent to the financial crisis. However, important differences between provider types are apparent and these differences have become more profound in the recent past. We provide suggestions as to how trust in the sector may be improved and provider an analysis of current initiatives to improve trust levels in the sector in general and in banking in particular.     

Modelling and Mapping Agricultural Output Values Using Farm Specific Details and Environmental Databases

Ongoing concerns regarding the economic losses associated with the CAP and the negative environmental impacts of present land use have led to calls for land use change and consequent efforts to identify areas which are, from both a financial and social perspective, most appropriate for such conversion. This paper develops and applies an output value modelling methodology in which site-specific biophysical factors are combined with farm level data in order to predict input usage and, subsequently, farm profit. The spatial analytic capabilities of a geographical information system (GIS) are used to combine the variety of data employed to permit analysis of a large study area (the entirety of Wales) and yield models of both the market and shadow value of output from the two principal agricultural sectors of the area: dairying and sheep farming. The GIS is then used to produce readily interpretable maps of these values across the study area. The resulting maps are highly compatible both with value maps of alternative land uses given in the recent literature and with approaches to policy formulation currently under development by a range of UK agencies. Such maps may be used to assist estimation of the extent and location of farming response to land use policy change.     

BRITISH POTATO STABILISATION POLICY IN A EUROPEAN CONTEXT

This paper presents a simulation model, based on a stochastic spatial equilibrium framework, for the GB potato market, allowing for trade with the Continent and the operation of domestic stabilisation policy. The model is used to explain the operation of the two policy instruments — support buying and area control — and to evaluate policy options and consequences. The notion of a cost-effective support buying programme is introduced and it is found that current policy is in the region of cost-effectiveness. Quota area, subject to the constraint that downside price risk is avoided, is found to lead to a trade-off between the consumer interest and the financial cost of policy. This trade-off is examined in a conventional welfare analysis and in probability terms. Subject to certain caveats, it is concluded that current policy tends to provided price stabilisation rather than price enhancement for producers.     

The relative efficiency of commodity futures markets

The ability of futures markets to predict subsequent spot prices has been a controversial topic for a number of years. Empirical evidence to date is mixed; for any given market, some studies find evidence of efficiency, others of inefficiency. In part, these apparently conflicting findings reflect differences in the time periods analyzed and the methods chosen for testing. A limitation of existing tests is the classification of markets as either efficient or inefficient with no assessment of the degree to which efficiency is present. This article presents tests for unbiasedness and efficiency across a range of commodity and financial futures markets, using a cointegration methodology, and develops a measure of relative efficiency. In general, the findings suggest that spot and futures prices are cointegrated with a slope coefficient that is close to unity, so that the postulated long-run relationship is accepted. However, there is evidence that the long-run relationship does not hold in the short run; specifically, changes in the spot price are explained by lagged differences in spot and futures prices as well as by the basis. This suggests that market inefficiencies exist in the sense that past information can be used by agents to predict spot price movements. A measure of the relative degree of inefficiency (based on forecast error variances) is then used to compare the performance of different markets. © 1999 John Wiley & Sons, Inc. Jrl Fut Mark 19: 413–432, 1999     

Matching the characteristics of a service to the preferences of customers

The central task of any market-oriented firm is to ensure that its product provides a mix of attributes that is consistent with the preferences of its customers. Attempts to measure the extent to which products meet consumer needs are often fraught with difficulties associated with eliciting and analysing the responses. We propose a simple index that can be applied to ordinal or cardinal data and will provide a convenient summary of the extent to which a product meets consumer expectations. The index, though simple, is shown to be robust, and is applied to the problem of analyzing the quality of banking services provided to small firms in the UK.     

Power and control in distribution channels: The case of automobile distribution in turkey

Research into the behaviour, management and control of distribution channels has traditionally relied on behavioural frameworks of analysis. Agency theory offers a different but complementary perspective and by integrating behavioural concepts within the framework of agency theory, analytic approaches can be developed which explicitly acknowledge the importance of power within hierarchical relationships. The case of distribution channels for cars in Turkey is used to provide an illustration of the issues relating to power and control within a vertically quasi‐integrated distribution system.     

Would you believe it? A detailed investigation of believability in comparative price advertising

Abstract

The construct of believability has been shown to be a key variable in consumers' evaluations of comparative price offers. This paper provides a detailed investigation of believability in the context of such offers. In particular, it investigates the impact of the presence of, level of, and type of advertised reference prices (ARPs) on believability across a range of product contexts. An experimental methodology is adopted for the study. Findings show that the presence of an ARP does not enhance believability but that the presence of a time limit does. Believability is also shown to vary inversely with the level of ARP but is not related to semantic cues, such as list prices, contained within the offer. The study provides evidence that the product context of the offer impacts on believability. Two interaction effects are also identified. The paper contributes to the extant literature by providing new insights into how consumers' believability is influenced by how a comparative price offer is presented. Such insights will be of interest to academics interested in pricing, practitioners seeking to ensure that their promotions have maximum impact, and policymakers hoping to ensure that consumers are not misled by dishonest comparative price advertising.