The influence of materialism on consumption indebtedness in the context of low income consumers from the city of São Paulo

This research is in the domains of materialism, consumer vulnerability and consumption indebtedness, concepts frequently approached in the literature on consumer behavior, macro-marketing and economic psychology. The influence of materialism on consumer indebtedness is investigated within a context that is characterized by poverty and by factors that cause vulnerability, such as high interest rates, limited access to credit and to quality affordable goods. The objectives of this research are: to produce a materialism scale that is well adapted to its environment, characterizing materialism adequately for the population studied; to compare results obtained with results of other studies; and to measure the relationship between materialism, socio-demographic variables, attitude to debt and consumption indebtedness. The primary data used in the analyses were collected from field research carried out in August, 2005 that relied on a probabilistic household sample of 450 low income individuals who live in poor regions of the city of Sao Paulo. The materialism scale, adapted and translated into Portuguese from Richins (2004), proved to be very successful and encourages new work in the area. It was noted that younger adults tend to be more materialistic than older ones; that illiterate adults tend to be less materialistic than those who did literacy courses when they were already adults; and that gender, income and race are not associated with the materialism construct. Among the other results, a logistic regression model was developed in order to distinguish those individuals who have an installment plan payment booklet from those who do not, based on materialism, socio-demographic variables and purchasing and consumer habits. The proposed model confirms materialism as a behavioral variable useful for forecasting the probability of an individual getting into debt in order to consume, in some cases almost doubling the chance of occurrence of this event. Findings confirm the thesis that it is not only adverse economic factors that lead people to get into debt; and that the study of demand for credit for consumption purposes must, of necessity, include variables of a psychological nature. It is suggested that the low income materialistic consumer experiences feelings of powerlessness and exclusion because of the gap that exists between their possessions and their desires. Lines of conduct to combat this marginalization from the consumer society are drawn targeting marketing professionals, public policy makers and vulnerability researchers. Finally, the possibility of new studies involving the materialism construct, which is central to literature on consumer behavior, albeit little used in empirical studies in Brazil, are discussed.

Sacrifice and efficiency of the income tax schedule

We investigate the efficiency of equal sacrifice tax schedules in an economy which primitives are exactly those in Mirrlees (1971): a continuum of individuals with identical preferences defined over consumption and leisure who differ with respect to their labor market productivity. Using a separable specification for preferences we derive the minimum equal sacrifice allocation and recover the tax schedule that implements it. The separable specification allows us to use the methodology developed by Werning (2007b) to check whether the schedule is efficient, that is, whether there is no alternative tax schedule that raises more revenue while delivering less utility to no one. We find that inefficiency does not arise for most parametrizations we use to approximate the US economy. For the few cases for which inefficiency does arise, it does so only for very high levels of income and marginal tax rates.

Affirmative action in college admission and the proficiency of high school students

Economic theory suggests that a¢ rmative action can either reduce or enhance incentives to invest in human capital. Empirical evidence on this matter, however, is still lacking. Using di¤erence in di¤er- ence estimates, this paper evaluates the e¤ects of the quota system in the admission to Brazilian public universities on the pro ciency of high school students. Our ndings show that favored groups attained lower scores, suggesting a negative link between a¢ rmative action and incentives for e¤ort and skill acquisition.

Dreaming up the right career: an exploratory study of the career aspirations of low-income adolescents living in urban São Paulo

No Brasil, os jovens de baixa renda estão propensos ao desemprego, o que é particularmente problemático em uma economia emergente onde a desigualdade de renda é relativamente alta, e onde o desenvolvimento socioeconômico futuro pode depender do crescimento e da estabilidade de uma classe média já vulnerável. Além disso, o desemprego entre os jovens, especialmente em cidades urbanas, está associado a elevada incidência de violência, comportamento ilegal, aumento da desigualdade e instabilidade sociopolítica. Este estudo complementa tentativas existentes de promover as perspectivas de emprego da juventude brasileira, investigando as aspirações profissionais de 25 adolescentes que vivem em comunidades de baixa renda na zona urbana de São Paulo. A pesquisa foi realizada através de grupos de foco durante o período de quatro encontros nas comunidades paulistanas de Vila Albertina, Heliópolis, Vila Prudente e Vila Nova Esperança. Os resultados da pesquisa repetem, em grande parte, o conhecimento existente que diz respeito a adolescentes; eles confirmam o papel importante que o mérito individual, o microambiente e os modelos exemplares (isto é, familiares, colegas e educadores locais) têm de moldar e possibilitar (ou impedir) os planos de carreira de jovens adultos, e destacam a flexibilidade e a diversidade de interesses profissionais nesta faixa etária. Ademais, os resultados revelam atitudes paradoxais face às comunidades de baixa renda em São Paulo. Todos os participantes pareciam empoderados por elementos dentro de seu microambiente, exibiam sentimentos de orgulho e que faziam parte de sua comunidade; porém, muitos pareciam perturbados pela maneira como pessoas de fora estereotipam ou estigmatizam os moradores da "favela". Ao todo, o estudo destaca tendências que sustentam razões para maiores investimentos no desenvolvimento profissional dos jovens de baixa renda. Na qualidade de um ecossistema com potencial para desenvolvimento socioeconômico, as comunidades de baixa renda podem constituir uma fonte rica não apenas de recursos humanos, mas também de oportunidades comerciais e empregos.