Measuring consumer uncertainty about future inflation De Bruin, Wändi Bruine; Manski, Charles F.; Topa, Giorgio ...
Journal of applied econometrics (Chichester, England),
April/May 2011, Letnik:
26, Številka:
3
Journal Article
Recenzirano
Odprti dostop
We introduce a survey-based measure of uncertainty about future inflation, asking consumers for density forecasts across inflation outcomes. Consumers are willing and able to express uncertainty, ...showing high response rates and response patterns that are reliably related to qualitative measures of uncertainty. Heterogeneity in expressed uncertainty is associated with demographic characteristics and financial literacy, and measures of central tendency derived from density forecasts are strongly correlated with point forecasts. Furthermore, expressed uncertainty is positively related to point forecast levels and to larger revisions in point forecasts over time.
Purpose - Despite the growing debate about differences in consumer attitudes and behavior in emerging and developed markets, there is little research on the differences in consumer value perceptions ...and their influence on purchase intentions. Focusing on the theory of impression management, the purpose of this paper is to introduce a conceptual framework incorporating the social (conspicuousness and status), personal (hedonism and materialism) and functional (uniqueness and price-quality perceptions) value perceptions using the context of luxury goods.Design methodology approach - Data were collected through a structured questionnaire- based study of consumers in four countries, representing two leading Western developed luxury markets (the US and the UK) and two important Eastern emerging markets (India and Malaysia). Multiple-group SEM analysis was used to analyze the data.Findings - The findings show several differences in the influence of value perceptions on consumer purchase intentions in the Western developed and Eastern emerging markets. The study highlights the importance of understanding the homogeneity and heterogeneity in consumer consumption decisions and provides managers with a basis to adapt their strategic responses.Originality value - The results offer needed empirical support and cross-cultural stability to the much theorized construct of value perceptions by exploring their effects within and between Western developed and Eastern emerging markets. Additionally, it unifies and complements the previous work by integrating the theory of impression management and value perceptions framework, thus providing a comprehensive theoretical framework with empirical support.
Many policymakers and some theories hold that restricting access to expensive credit helps consumers by preventing overborrowing. I examine some effects of restricting access, using household panel ...survey data on payday loan users collected around the introduction of binding restrictions on payday loan terms in Oregon. Borrowing fell in Oregon relative to Washington, with former payday borrowers shifting partially into plausibly inferior substitutes: bank overdrafts and late bill payment. Additional evidence suggests that restricting access caused deterioration in the overall financial condition of Oregon households. Overall the results are consistent with restricted access harming, not helping, consumers on average.
We present an economic model of media bias and media mergers. Media owners have political motives as well as profit motives, and can influence public opinion by withholding information that is ...pejorative to their political agenda—provided that their agenda is not too far from the political mainstream. This is true even with rational consumers who understand the media owners' biases, because the public do not know how much information the news organizations have and so do not know when news is being withheld. In line with conventional wisdom, this problem can be undone by competition; but competition can be defeated in equilibrium by media mergers that enhance profits at the expense of the public interest. We thus derive a motive for media merger policy that is completely distinct from the motives behind conventional antitrust. While media bias may reduce the profit incentives to merge, media markets nonetheless err by being insufficiently competitive, and the consequences of merger are more severe than in other markets.
Online consumer credit services play a vital role in the contemporary consumer market. To foster their sustainable development, it is essential to establish and strengthen the relevant risk ...management mechanism. This study proposes an intelligent management framework called the consumer default risk portrait (CDRP) to mitigate the default risks associated with online consumer loans. The CDRP framework combines traditional credit information and Internet platform data to depict the portrait of consumer default risks. It consists of four modules: addressing data imbalances, establishing relationships between user characteristics and the default risk, analyzing the influence of different variables on default, and ultimately presenting personalized consumer profiles. Empirical findings reveal that “Repayment Periods”, “Loan Amount”, and “Debt to Income Type” emerge as the three variables with the most significant impact on default. “Re-payment Periods” and “Debt to Income Type” demonstrate a positive correlation with default probability, while a lower “Loan Amount” corresponds to a higher likelihood of default. Additionally, our verification highlights that the significance of variables varies across different samples, thereby presenting a personalized portrait from a single sample. In conclusion, the proposed framework provides valuable suggestions and insights for financial institutions and Internet platform managers to improve the market environment of online consumer credit services.
We leverage the newly emerging business analytical capability to rapidly deploy and iterate large-scale, microlevel, in vivo randomized experiments to understand how social influence in networks ...impacts consumer demand. Understanding peer influence is critical to estimating product demand and diffusion, creating effective viral marketing, and designing "network interventions" to promote positive social change. But several statistical challenges make it difficult to econometrically identify peer influence in networks. Though some recent studies use experiments to identify influence, they have not investigated the social or structural conditions under which influence is strongest. By randomly manipulating messages sent by adopters of a Facebook application to their 1.3 million peers, we identify the moderating effect of tie strength and structural embeddedness on the strength of peer influence. We find that both embeddedness and tie strength increase influence. However, the amount of physical interaction between friends, measured by coappearance in photos, does not have an effect. This work presents some of the first large-scale in vivo experimental evidence investigating the social and structural moderators of peer influence in networks. The methods and results could enable more effective marketing strategies and social policy built around a new understanding of how social structure and peer influence spread behaviors in society.
This paper was accepted by Alok Gupta, special issue on business analytics
.
Purpose
– This paper aims to examine whether Muslim and non-Muslim consumers give different importance to green food consumption.
Design/methodology/approach
– Data were analysed using means ...comparison and multiple discriminant analysis across a sample of 700 students in a public higher learning institution in the Federal Territory of Labuan, Malaysia, using the convenience sampling technique.
Findings
– Empirical results via multiple discriminant analysis discovered that imperative aspects such as specific needs, personal environmental values related to green food and governmental efforts strongly predict discrimination towards green food consumption among the non-Muslim consumers. Muslim consumers follow a strict diet that complies with religious dietary laws.
Practical implications
– Understanding Muslim and non-Muslim consumers’ awareness of and intentions towards green food consumption is very important for any manager in the food industry or food market, as it is critical that the food they produce is safe, environmental and healthy. It is understood that Muslim consumers are very particular about food intake, as they can only consume food that complies with religious dietary laws.
Originality/value
– The results of this study presented vital insights and enhanced the understanding of the role of religion and its influence on green food consumption in Asia.
We study the contagious switching behavior related to a consumer’s choice of wireless carriers, that is, that a consumer is more likely to switch wireless carriers if more of their contacts from the ...same carrier have switched. Contagious switching (or a positive network effect) can be driven by information-based social learning, as well as other mechanisms related to network size. Although previous marketing literature has documented the social-learning effect, most of the applications studied involve products in which consumers usually do not enjoy any direct benefits from a large network other than from information-based social learning. We explore the importance of the social-learning effect relative to other mechanisms that may also lead to the network effect. We propose a dynamic structural model with interpersonal interactions. To model the social-learning effect, a consumer uses feedback from his or her contacts who have switched from a focal carrier to update his or her quality expectations of alternative carriers. Our model further accounts for two unique aspects of consumer strategic learning: (i) the individual’s perception on the signal of alternative carriers from contacts who switch is systematically different according to whether the signal comes from a loyal contact; and (ii) that the perceived noisiness of the signal on alternative carriers from a contact who has switched depends on the strength of the relationship between the individual and the contact. The remaining network effect not captured through social learning is modeled as a function of the size of the network. We solve the model with a two-step dynamic programming algorithm, with the assumption that a consumer is forward-looking and decides whether to stay with the same service carrier in each period by maximizing the total utility received from that day onward. We apply the proposed model to the data set of a mobile network operator in a European country. We find that churning/switching behavior is contagious in the network context and that one-third of general network effects can be attributed to social learning. We also detect strategic learning by consumers from their contacts in two ways: the experience signal on alternative carriers from a more loyal contact who has switched from the focal carrier is perceived to be more positive than that from a less loyal contact; and the social-learning effect is stronger from an individual’s closest contacts. The simulation analysis demonstrates the value of our model in helping a company prioritize its customer relationship management effort.
This paper was accepted by Matthew Shum, marketing.
Purpose
This paper aims to explore how brand relationship quality (BRQ) influences consumers’ perceived sense of justice in the context of service recovery situations.
Design/methodology/approach
The ...authors conducted a survey of 368 Brazilian consumers who experienced real-life automotive service recovery situations. The authors tested their model and underlying hypotheses using structural equation modeling.
Findings
Stronger BRQ led to higher levels of perceived justice (distributive, procedural and interactional), which in turn led to higher customer satisfaction of complaint handling. Ultimately, higher customer satisfaction led to lower complaining, lower retaliation and higher purchase intention. The authors' alternative model tested the effects of BRQ sub-dimensions on justice perception. Interestingly, trust produced a “love-is-blind” effect, while intimacy revealed a “love-becomes-hate” effect.
Originality/value
This study assessed BRQ and its sub-dimensions (self-connection, satisfaction, commitment, trust and intimacy) on sense of justice (distributive, procedural and interactional) within service recovery. Also, this study demonstrated the opposing effects of the brand relationship sub-dimensions trust and intimacy on perceptions of justice.
We analyze the effectiveness of consumer financial regulation by considering the 2009 Credit Card Accountability Responsibility and Disclosure (CARD) Act. We use a panel data set covering 160 million ...credit card accounts and a difference-in-differences research design that compares changes in outcomes over time for consumer credit cards, which were subject to the regulations, to changes for small business credit cards, which the law did not cover. We estimate that regulatory limits on credit card fees reduced overall borrowing costs by an annualized 1.6% of average daily balances, with a decline of more than 5.3% for consumers with FICO scores below 660. We find no evidence of an offsetting increase in interest charges or a reduction in the volume of credit. Taken together, we estimate that the CARD Act saved consumers $11.9 billion a year. We also analyze a nudge that disclosed the interest savings from paying off balances in 36 months rather than making minimum payments. We detect a small increase in the share of accounts making the 36-month payment value but no evidence of a change in overall payments.
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