On the distributional effects of income in an aggregate consumption relation

Abstract .  In this paper we analyse the influence of characteristics of the income distribution in modelling aggregate consumption expenditure. We model the aggregate consumption relation of a heterogeneous population, using a statistical distributional approach of aggregation, and apply it to UK-Family Expenditure Survey data. A bootstrap test based on a non-parametric estimation methodology, which accounts for the presence of continuous and discrete variables, suggests that the mean and the dispersion of the income distribution significantly influence aggregate consumption expenditure. Also, the parameters of the aggregate relation are time varying. These findings have implications for constructing empirically sound models of aggregate consumption expenditure.     

The effects of customers’ perceptions of brand personality in casual theme restaurants

Although existing studies recommend that restaurant chains develop and communicate salient brand personalities, no research to date provides empirical evidence that perceptions of unique brand personality by consumers lead to positive outcomes in the restaurant business. Therefore, using a sample of 336 adults, this research models the causal relationships between brand personality perceptions, brand preference, attitudinal loyalty, and positive word-of-mouth (W-O-M) behavior for the Olive Garden and Chili's restaurant chains. It was found that for both chains, brand personality perceptions have a positive effect on brand preference and attitudinal loyalty, brand preference has a positive impact on attitudinal loyalty, and attitudinal loyalty has a positive influence on positive word-of-mouth (W-O-M) communication. In addition, for the Olive Garden and Chili's brands, it was also found that there is a direct link between brand preference and word-of-mouth behavior.     

Credit Contagion Channels: Market Microstructure Evidence from Lehman Brothers’ Bankruptcy

Immediately after Lehman Brothers’ bankruptcy, many firms disclosed their financial exposure (or lack thereof) to Lehman. This offers a clean setting to test two credit contagion channels through which a financial firm's bankruptcy can affect other firms—“counterparty risk” and “information transmission” channels. Using market microstructure variables to measure the various dimensions of contagion effects, we provide robust evidence supporting the significance of counterparty risk. Firms with exposure to Lehman suffered more severe negative effects—wider bid‐ask spread, higher price impact, greater information asymmetry, and greater selling pressure—than unexposed firms. We find mixed evidence regarding the information transmission hypothesis.     

Long-term health economic benefits of sensor-augmented pump therapy vs continuous subcutaneous insulin infusion alone in type 1 diabetes: a UK perspective

Aims/hypothesis:

Continuous subcutaneous insulin infusion (CSII) is an important treatment option for type 1 diabetes patients unable to achieve adequate glycemic control with multiple daily injections (MDI). Combining CSII with continuous glucose monitoring (CGM) in sensor-augmented pump therapy (SAP) with a low glucose-suspend (LGS) feature may further improve glycemic control and reduce the frequency of hypoglycemia. A cost-effectiveness analysis of SAP?+?LGS vs CSII plus self-monitoring of blood glucose (SMBG) was performed to determine the health economic benefits of SAP?+?LGS in type 1 diabetes patients using CSII in the UK.

Methods:

Cost-effectiveness analysis was performed using the CORE diabetes model. Treatment effects were sourced from the literature, where SAP?+?LGS was associated with a projected HbA_1c reduction of ?1.49% vs ?0.62% for CSII, and a reduced frequency of severe hypoglycemia. The time horizon was that of patient lifetimes; future costs and clinical outcomes were discounted at 3.5% and 1.5% per annum, respectively.

Results:

Projected outcomes showed that SAP?+?LGS was associated with higher mean quality-adjusted life expectancy (17.9 vs 14.9 quality-adjusted life years [QALYs], SAP?+?LGS vs CSII), and higher life expectancy (23.8 vs 21.9 years), but higher mean lifetime direct costs (GBP 125,559 vs GBP 88,991), leading to an incremental cost-effectiveness ratio (ICER) of GBP 12,233 per QALY gained for SAP?+?LGS vs CSII. Findings of the base-case analysis remained robust in sensitivity analyses.

Conclusions/interpretation:

For UK-based type 1 diabetes patients with poor glycemic control, the use of SAP?+?LGS is likely to be cost-effective compared with CSII plus SMBG.     

How should Engel's law be formulated?

Engel's law expresses a “negative stochastic association” of income and the proportion of income that is spent on food. However, there are many quite different notions of “negative stochastic association” and consequently there are different ways of defining Engel's law. We relate these different concepts to Engel's original statistical analysis and show that one must give credit to Engel for the first non-parametric statistical analysis of budget-data.     

Is education the panacea for economic deprivation of Muslims?: Evidence from wage earners in India, 1987–2005

Few researchers have examined the nature and determinants of earnings differentials among religious groups, and none has been undertaken in the context of conflict-prone multi-religious societies like the one in India. We address this lacuna in the literature by examining the differences in the average log earnings of Hindu and Muslim wage earners in India, during the 1987–2005 period. Our results indicate that education differences between Hindu and Muslim wage earners, especially differences in the proportion of wage earners with tertiary education, are largely responsible for the differences in the average log earnings of the two religious groups across the years. By contrast, differences in the returns to education do not explain the aforementioned difference in average log earnings. In conclusion, we discuss some policy implications.     

Management Risk Incentives and the Readability of Corporate Disclosures

Managers with higher risk incentives (greater options vega) issue less readable disclosures. Firms in the top quartile of vega file annual reports that are about 15.4% more voluminous than those in the bottom quartile. The effect of vega on obfuscation remains after controlling for firm risk, operating complexities, accounting and auditor choices, chief executive officer changes, and an exogenous shock to option compensation. This effect is tempered by higher institutional ownership, lower management entrenchment, and greater analyst following. Obfuscation benefits managers by increasing return volatility (option value) and allowing greater earnings management. These findings document a new link between options and disclosure transparency.     

Where is the Security Blanket? Developing Social Media Marketing Capability as a Shield from Perceived Cybersecurity Risk

Although cybersecurity is important for any organization, firms have little understanding of the ramifications of perceived cybersecurity risk and how marketers can avert its negative marketing outcomes. The inability of firms to prevent massive data breaches in the recent past has heightened cybersecurity risk perceptions of customers and cybersecurity-related marketing challenges and opportunities. This study links cybersecurity risk with firm risk through firm reputation by developing a conceptual framework grounded in perceived risk theory in conjunction with dynamic capabilities and social network theoretical perspectives. Our findings show that social media marketing capabilities enable firms in mitigating the adverse impact of cybersecurity risk in declining firm reputation and value. Thus, this study provides significant implications for marketing theory and practice.     

Institutionalizing Ethics in Institutional Voids: Building Positive Ethical Strength to Serve Women Microfinance Borrowers in Negative Contexts

This study examines whether microfinance institutions (MFIs) that serve women borrowers at the base of the economic pyramid are likely to adopt a written code of positive organizational ethics (POE). Using econometric analysis of operational and economic data of a sample of MFIs from across the world, we find that two contextual factors—poverty level and lack of women’s empowerment—moderate the influence of an MFI’s percentage of women borrowers on the probability of the MFI having a POE code. MFIs that serve more women borrowers are more likely to adopt a POE code, especially in negative contexts (where women borrowers face poverty and disempowerment and are therefore susceptible to abuse). This study provides evidence that MFIs can build positive ethical strength in negative contexts.