Trading-up on unmet expectations? Evaluating consumers’ expectations in online premium grocery shopping logistics

Geography and retail store location are inherently bound together; this study links food retail changes to systemic logistics changes in an emerging market. Current logistic practices underplay demand-led models and online market evolution in large metropolises such as Istanbul, Rio de Janeiro, and Delhi. The later include raising income and education, access to a wide range of technologies, traffic and transport difficulties, lagging retail provision, changing family structure and roles, as well as changing food culture and taste. The study incorporates demand for premium products defined by Kapferer and Bastien, (2009b) as comprising a broad variety of higher quality and unique or distinctive products and brands including in grocery organic ranges, healthy options, allergy free selections, and international and gourmet/specialty products through an online grocery model (n=356) that integrates a novel view of home delivery (HD) in Istanbul. More importantly from a logistic perspective our model incorporates any products from any online vendors broadening the range beyond listed items found in any traditional online supermarkets. Data collected via phone survey and analysed via structural equation modelling (SEM) suggest that the offer of online premium products significantly affects consumers’ delivery logistics expectations. We discuss logistics operations and business management implications, identifying the emerging geography of logistic models which respond to consumers’ unmet expectations using multiple sourcing and consolidation points.

A wave of change: Labor market and social security impacts of the EU refugee inflow

The recent massive inflow of refugees to the European Union (EU) raises a number of unanswered questions on the economic impact of this phenomenon. To examine these questions, we constructed an overlapping-generations model that describes the evolution of the skill premium and of the welfare benefit level in relevant European countries, in the aftermath of an inflow of asylum-seekers. In our simulation, relative wages of skilled workers increase between 8% and 11% in the period of the inflow; their subsequent time path is dependent on the initial skill premium. The entry of migrants creates a fiscal surplus of about 8%, which can finance higher welfare benefits in the subsequent periods. These effects are weaker in a scenario where refugees do not fully integrate into the labor market.

Anatomy of the portuguese stock market risk and return in the 1977-2012 period

This paper analyses the Portuguese stock market since it reopened in 1977, with a special focus on the evolution of the statistic and stochastic characteristics of the market return throughout this 36 year period. The market return for the period of time between 1977 and 2012 (September 28th) is estimated and then compared with the return that would have been achieved with Government bonds and treasury bills, which allows us to confirm that the hierarchy of return / risk across the different financial instruments is verified. The market risk premium for this 36 year period is also estimated and a comparison with other markets is performed, suggesting that the Portuguese market’s risk has not been compensated by an adequate return. The study also examines the evolution of the Portuguese market’s volatility in the 1977-2012 period and compares it with other markets, showing the existence of extremely high peaks during the first 11 years, but indicating a downwards trend throughout the whole period under analysis. Finally, the correlation between market returns for Portugal and for other countries and the degree of integration are estimated and their evolution throughout time is assessed, leading to the conclusion that the performance of the Portuguese stock market has become increasingly correlated with major European markets – correlation with some markets close to 0.70 from 2000 onwards-, but that country-specific risk factors are still relevant.

Prêmio sobre o risco (risk premium) dos títulos soberanos e política fiscal discricionária vs. regras de política fiscal para um país em desenvolvimento: o caso do Brasil

O projeto de pesquisa é parte do projeto entitulado "Credibilidade de Políticas Monetárias e Fiscais para o Brasil: Risco Soberano, Instituições, Âncoras Nominais, e Acesso aos Mercados Financeiros Internacionais". Dentro do atual plano de estabilização, um estudo empírico sobre a economia brasileira fornece um exemplo vívido do impacto de vários fatores, como o grau de institucionalização das políticas monetárias e orçamentárias que tem sido utilizadas desde a implementação do Plano Real, que aumentariam a credibilidade, sustentando a política cambial e o fluxo positivo do capital internacional, na percepção do mercado do risco de suspensão de pagamento (default risk) da dívida externa de um país em desenvolvimento. O foco dentro deste projeto de pesquisa será na questão de pesquisa: "Prêmio sobre o risco (risk premium) dos títulos soberanos e política fiscal discricionária vs regras de política fiscal para um país em desenvolvimento: o caso do Brasil".

The forward- and the equity-premium puzzles: two symptoms of the same illness?

We build a pricing kernel using only US domestic assets data and check whether it accounts for foreign markets stylized facts that escape consumption based models. By interpreting our stochastic discount factor as the projection of a pricing kernel from a fully specified model in the space of returns, our results indicate that a model that accounts for the behavior of domestic assets goes a long way toward accounting for the behavior of foreign assets. We address predictability issues associated with the forward premium puzzle by: i) using instruments that are known to forecast excess returns in the moments restrictions associated with Euler equations, and; ii) by pricing Lustig and Verdelhan (2007)'s foreign currency portfolios. Our results indicate that the relevant state variables that explain foreign-currency market asset prices are also the driving forces behind U.S. domestic assets behavior.

The forward- and the equity-premium puzzles: two symptoms of the same illness?

Using information on US domestic financial data only, we build a stochastic discount factor—SDF— and check whether it accounts for foreign markets stylized facts that escape consumption based models. By interpreting our SDF as the projection of a pricing kernel from a fully specified model in the space of returns, our results indicate that a model that accounts for the behavior of domestic assets goes a long way toward accounting for the behavior of foreign assets prices. We address predictability issues associated with the forward premium puzzle by: i) using instruments that are known to forecast excess returns in the moments restrictions associated with Euler equations, and; ii) by pricing Lustig and Verdelhan (2007)’s foreign currency portfolios. Our results indicate that the relevant state variables that explain foreign-currency market asset prices are also the driving forces behind U.S. domestic assets behavior.

The forward- and the equity-premium puzzles: two symptoms of the same illness?

Using information on US domestic financial data only, we build a stochastic discount factor—SDF— and check whether it accounts for foreign markets stylized facts that escape consumption based models. By interpreting our SDF as the projection of a pricing kernel from a fully specified model in the space of returns, our results indicate that a model that accounts for the behavior of domestic assets goes a long way toward accounting for the behavior of foreign assets prices. We address predictability issues associated with the forward premium puzzle by: i) using instruments that are known to forecast excess returns in the moments restrictions associated with Euler equations, and; ii) by comparing this out-of-sample results with the one obtained performing an in-sample exercise, where the return-based SDF captures sources of risk of a representative set of developed and emerging economies government bonds. Our results indicate that the relevant state variables that explain foreign-currency market asset prices are also the driving forces behind U.S. domestic assets behavior.

The market strategies alternatives of an e-business start-up in Brazil

The e-business market is one of the fastest growing markets in Brazil, with e-business sales accounting for BRL 14.8 billion in 2010 and a growth of 40% per year (+1000% over the past 7 years). Sales-event clubs and collective bargaining websites are one of the most dynamic segments of the e-business market: the number of new players is increasing rapidly, with over 1200 collective bargaining websites currently operating in Brazil. In that context, growth and differentiation seem to be two key success factors for Coquelux. According to webshopper (23rd Edition, e-bit), growth can be achieved by targeting middle and low-income consumers from class C, who represent 50% of the total e-commerce sales. But Coquelux, which is specialized in desire and luxury brands, has built its reputation and competitive advantage through its “exclusivity”, by targeting wealthier consumers from classes A and B who are attracted by its fashionable and high-end positioning. The evolution (growth?) of this market and the development of its competition naturally raise a strategic question for Coquelux’s managers: can Coquelux grow and still maintain its competitive advantage? Should it grow by expanding its consumer base to class C? If so, how? Consumers from classes A, B or C must be targeted through the same online communication channels. Recent studies from the ABEP/ABIPEME emphasized the importance of social networks as a tool for converting new clients and gaining their loyalty, regardless of their social class. However, high-income and low-income e-consumers do not have the same consumption habits, do not respond to the same type of marketing strategies, and most importantly, do not share the same values. Thus, it seems difficult to expand Coquelux’s consumer base to class C without changing its marketing strategies and altering its image Three options were identified for Coquelux: reinforcing its leadership on the luxury segment and focusing on a small niche market (1), which would threaten its survival in the long run; completely changing its strategy and competing for a mass market through commercial brands (2), which requires major financial investments that managers don’t have access to; or finding an intermediary solution (3). This thesis’ recommendation for the third option consists in focusing on premium brands (rather than luxury) in order to increase sales volume (Coquelux’s most profitable sales happened with local desire brands) with products that appeal to class B but also attract the emerging class C which is looking for brand recognition. It could thus implement a slow entry strategy towards the mass market without damaging its main competitive advantage.

Essays on illiquidity premium

This dissertation is composed of three related essays on the relationship between illiquidity and returns. Chapter 1 describes the time-series properties of the relationship between market illiquidity and market return using both yearly and monthly datasets. We find that stationarized versions of the illiquidity measure have a positive, significant, and puzzling high premium. In Chapter 2, we estimate the response of illiquidity to a shock to returns, assuming that causality runs from returns to illiquidity and find that an increase in firms' returns lowers illiquidity. In Chapter 3 we take both effects into account and account for the endogeneity of returns and illiquidity to estimate the liquidity premium. We find evidence that the illiquidity premium is a smaller than the previous evidence suggests. Finally, Chapter 4 shows topics for future research where we describe a return decomposition with illiquidity costs.

Risky business: the market for unprotected commercial sex

Each day close to 20,000 people become infected with the HIV virus worldwide; a large portion of whom are infected through unprotected sex with sex workers. While condoms are an effective defense against the transmission of HIV and other sexually transmitted infections, large numbers of sex workers are not using them with their clients. We argue that some sex workers are willing to take the risk because clients are willing to pay more to avoid using condoms. Using a panel data set from Mexico, we estimate that sex workers received a 23 percent premium for unprotected sex from clients who requested not to use a condom. However, this premium jumped to 46 percent if the sex worker was considered very attractive. These results suggest that the current policies aimed at educating sex workers about risk, empowering them and improving their access to condoms need to be complemented with interventions aimed at teaching clients about the “joy of safe sex” thereby increasing the demand for using condoms.

Line extension influence on brand image: a study on the alcoholic beverage market in Brazil

The present study has the objective of understanding the influence of line extensions on the image of vodka brands. The research was performed by organizing various focus groups with vodka consumers in São Paulo. These focus groups allowed exploring and analyzing how the last line extensions of vodka brands have modified the image the consumers had of the brand. Three hypotheses were distinguished as an outcome of the research: (1) The influence of a line extension on brand image depends heavily on the initial image the consumers have of the brand. For a vodka brand with an average or bad image, launching a line extension with a perceived average or bad quality does not modify the brand image. On the contrary, for a vodka brand with a positive initial brand image, launching a line extension with perceived high quality led to a positive change in the brand image. (2) For vodka brands, a vertical line extension recognized as having high authenticity provokes a transfer of attributes from the extended product to the brand. (3) Among Keller’s (1993) dimensions of brand image, non-product related attributes and especially packaging are the one that are the most influenced by line extensions of vodka brands.

The Brazilian class C women perception regarding premium mass products in the beauty industry

Recentemente, os mercados emergentes se tornaram um alvo potencial para a indústria da beleza e o Brasil está se tornando um mercado lucrativo para os produtos cosméticos Premium (Euromonitor International, 2013). A população de baixa renda no Brasil representa 70% de seus habitantes ao considerar as classes C, D e E (Barki e Parente, 2010), sendo a classe C representada por 56% da população (Neri, 2012). Este é um mercado potencial para as empresas multinacionais (MNCs), que enfrentam desafios de fazer negócios no país, visto que a classe C opta por gastar parte de sua renda com produtos relacionados a beleza (Silva e Parente, 2007) e ainda há um pouco conhecimento sobre o comportamento de consumo na base da pirâmide. Portanto, o objetivo deste estudo é investigar e descrever o comportamento de consumo das mulheres brasileiras da classe C no setor de beleza, em relação aos produtos Mass Premium, melhorando o conhecimento no que diz respeito a essa população e ao tema proposto. Para atingir esse objetivo, o autor utilizou uma metodologia baseada em uma análise descritivas qualitativa em que foram entrevistadas 20 mulheres de todas as faixas etárias, que pertencem à classe C brasileira e citações foram usadas para fornecer a confirmação dos resultados da análise. Os resultados sugerem que, ao longo dos anos, houve de fato um movimento de trade up no consumo de produtos de beleza. Além disso, foram identificados cinco aspectos principais, que conduzem decisão de compra das mulheres de classe C, no setor de beleza: confiabilidade, qualidade, status, autoestima e bem-estar. Apesar das limitações de um estudo exploratório, espera-se que a pesquisa aumente o conhecimento sobre o mercado da base da pirâmide, especialmente no que diz respeito à indústria da beleza.

Ecommerce as internationalization strategy: an exploratory study based on premium fashion brazilian brands: case study of farfetch

As stated by Hoffmann and Coste-Manière (2012) “The web is a mass medium that contrast completely with the traditional codes of exclusivity associated with the luxury industry, and has long been simply rejected by the luxury industry for being an illegitimate distribution channel.” Meanwhile this market presents an incomparable pace of growth and is gradually changing the existing retailing business model and companies must be aware of this change and capable to adapt to it. The internet and cross-border sales already changed the competition throughout retailing and it will increase even more, so companies must be ready to face it. Internet has shown its great opportunity for all markets, although luxury/premium market is not yet taking the proper advantage of its potential, but the necessity to be an omnichannel business strategy is growing. This paper presents an exploratory research based on a case study of how premium fashion Brazilian brands are using Farfetch, e-commerce, as an entry market strategy and how this affects them. The research question of this study is: How is Farfetch helping on the internationalization of Brazilian premium fashion brands?, and in order to answer it was conducted an in-depth interview with the Brazilian head of business development of Farfetch, apart an extensive secondary data research. As expected the study found a list of trade-offs of using an e-commerce, luxury specialized, with a marketplace approach to the brands willing to internationalize. As stated by Altagamma and McKinsey (2015) study “[...] luxury brands have no choice but to embrace the digital era and become truly omnichannel. This will require them a radical rethinking of both their customer experience of their consumer engagement strategy.” Looking either from the Farfetch point of view, trying to understand why they offer this opportunity to the brands, or also from the brand side if this is a manageable approach. This study presents a contribution for both sides, trying to give tools to the brands on understanding the internationalization reasons and approach, as well as explaining Farfetch business model, and the advantages it can bring to them, at the same time of a general market trend analysis for Farfecth.

Informality and labour market segmentation: the case of Argentina

The document evaluates the presence of segmentation in the Argentinean labour market. The analysis is centred on the comparison of the earnings of formal and informal workers. Two different approaches to the definition of informality are used. The existence of a formal premium is tested using dynamic data and semiparametric techniques. The period analysed is 1996-2006 for all urban surveyed areas. Our results support the segmentation hypothesis for the Argentine urban labour market: workers with similar probabilities of entering/exiting across sectors obtain different earnings.

Firm Market Performance and Volatility in a National Real Estate Sector

We present empirical evidence using daily data for stock prices for 17 real estate companies traded in the Sao Paulo, Brazil stock exchange. from August 26, 2006 to March 31, 2010. We use the U.S. house price bubble, financial crisis and risk measures to instrument for momentums and reversals in the domestic real estate sector. We find evidence of conditional premium persistence and conditional volatility persistence in the market. We find that the conditional risk-return relationship in the sector is consistent with the prospect theory of risk attitudes in this period. Certain companies seem to be operating on a perceived potential industry return above the target, while most others are below the target, and the whole sector is below target on average. (C) 2011 Elsevier Inc. All rights reserved.