Unequal effects of elders’ health problems on wealth depletion across race and ethnicity

We investigate the impact of health on wealth depletion of African American, Hispanic, and non‐Hispanic white elders. Using the data from 4,464 elderly households that participated in both the 1993 Asset and Health Dynamics of the Oldest Old and the 1998 Health and Retirement Study, we find that health problems contribute to wealth depletion differently across elders in different racial and ethnic groups. We draw policy implications from the findings regarding ways to help consumers protect their financial security from health shocks in later life.     

Consumers’ use of information intermediaries and the impact on their information search behavior in the financial market

An information intermediary is a human or a nonhuman party designed to assist consumers in information processing. The current study identifies factors determining the likelihood of using human information intermediaries and the effects of using information intermediaries on the amount and the pattern of overall information search. The proposed model is built based on a value‐intention framework and tested in the context of financial investment decisions. The results indicate that a low level of perceived expertise in financial management, a large amount of total financial assets, and a high opportunity cost of time enhance the perceived value of information intermediaries, thus increasing the likelihood of using information intermediaries. We also find that the use of information intermediaries is positively associated with the overall extent of information search and influences the likelihood of using other information sources.     

The effects of reference point, knowledge, and risk propensity on the evaluation of financial products

Evaluating and choosing a financial product often requires a trade-off between risk and returns on investment, as a riskier product may yield a higher return. We examine the effect of different reference points (i.e., a riskier reference vs. a safer reference) on the evaluation of a financial product when attributes are explicitly traded off during the evaluation. Our findings suggest that a safer reference increases the attractiveness of the focal product under evaluation, while a riskier reference point does not affect that evaluation. The safer reference point appears to facilitate the risk-seeking tendency in financial decision-making. Further, two types of consumer knowledge, namely, objective and subjective, can moderate the effect of the reference point. Subjective knowledge negatively affects attribute-based objective evaluations, promoting instead the use of external reference information. A discrepancy between the two types of knowledge (i.e., over-confidence), in particular, can cause a more biased evaluation.     

Building the case for financial education

The need for financial education among Americans is often demonstrated with alarming rates of bankruptcy, high consumer debt levels, low savings rates, and other negative outcomes that may be the result of poor family financial management and low financial literacy levels. The collective response by public and private organizations to the accepted and often demonstrated need for financial education has been impressive in size and scope. This article provides an overview of the wide range of programs aimed at improving Americans’ financial literacy as well as a short review of the current evidence of the effectiveness of financial education programs. We advocate for the adoption of a comprehensive framework or approach to evaluation to assist those currently delivering, and planning to deliver, financial education and highlight some of the key challenges. A five‐tiered approach to program evaluation is described and outlined to provide a general framework to guide financial education evaluation.     

A Sample Selection Model of Consumer Adoption of Computer Banking

We develop a bivariate probit selection model of consumer access and adoption that accounts for the cross equation correlations of the errors. The Survey of Consumers, collected by the University of Michigan, is the database used to estimate the model. We find a significant cross equation correlation between consumers perceived access and their use of computer banking. Based on our results, the bivariate selection model provides asymptotically more efficient estimates than does a single equation model because the bivariate selection model accounts for the sample selection bias associated with access. In addition, the bivariate selection model has a higher percentage of correctly predicted adopters than does the corresponding single equation (univariate) model.     

Review of consumer activism in Korea, 1910–1995: A political-economic approach

Consumer activism in Korea has a long history, starting from an anticolonial social movement and developing into one which targets consumers' interests at both individual and societal levels. As a social movement, consumer activism needs to be understood within a political and economic environment, particularly in Korea which has gone through dynamic changes both politically and economically. While understanding of the political environment sheds further light on governmental consumer policies as well as manifested consumer activism, eminent consumer problems and issues were acknowledged according to the stage of economic development. This political-economic approach deepens our understanding of the Korean consumer movement and provides a framework for analyzing consumer activism in other Eastern Asian countries which are experiencing similar political or economic developments.

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Überblick über Verbraucheraktivismus in Korea von 1910 bis 1995: ein politischökonomischer Ansatz

Zusammenfassung Verbraucheraktivismus hat in Korea eine lange Geschichte, die als soziale antikolonialistische Bewegung begann und sich zu einer Bewegung entwickelt, die die Interessen der Verbraucher sowohl auf individueller Ebene wie auch auf gesellschaftlicher Ebene im Visier hat. Als soziale Bewegung muß Verbraucheraktivismus in einem politischen und ökonomischen Umfeld gesehen werden, insbesondere in einem Land wie Korea, das große politische und ökonomische Umwälzungen durchlaufen hat. Während ein Verständnis der politischen Umstände Erkenntnisse über staatliche Verbraucherpolitik, aber auch über sonstige Verbraucheraktivitäten, ermöglicht, ist es der Stand der wirtschaftlichen Entwicklung, der darüber bestimmt, welche Verbraucherprobleme und -themen in den Vordergrund rücken. Dieser kombinierte politisch-ökonomische Ansatz ermöglicht ein vertieftes Verständnis der koreanischen Verbraucherbewegung und bietet auch einen Bezugsrahmen für die Analyse der Verbraucheraktivitäten in anderen ostasiatischen Ländern, die eine ähnliche politische und ökonomische Entwicklung wie Korea erleben.

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Kee-Choon Rhee is a Professor in the Department of Consumer & Child Studies, the Seoul National University, Seoul, Korea 151–741. Jinkook Lee is an Assistant Professor of Retail & Consumer Science, University of Tennessee, 1215 West Cumberland Avenue, Knoxville, Tennessee 37996-1900, U.S.A.The uthors thank Robert N. Mayer, Robert O. Herrmann, and Loren V. Geistfeld for their insightful comments.     

The Poor in the Financial Market: Changes in the Use of Financial Products,Institutions, and Services from 1995 to 1998

The poor are in a disadvantaged position in the financial market. In this article, a review is given of public policy initiatives that are implemented to help the poor as well as an examination of how the poor are served in the financial market, using data from the 1995 and 1998 Survey of Consumer Finances provided by the Federal Reserve Board. Specifically, poor households' use of depository and credit products, the financial institutions that provide these products to the poor, and the way in which the poor conduct their financial business (e.g., visit to branch offices, ATMs, etc.) are compared to that of non-poor households. Marketing and public policy implications are drawn from the findings.