Global Reuse and Optimal Waste Policy

Electronic waste generated from the consumption of durable goods in developed countries is often exported to underdeveloped countries for reuse, recycling and disposal with unfortunate environmental consequences. The lack of efficient disposal policies within developing nations coupled with global free trade agreements make it difficult for consumers to internalize these costs. This paper develops a two-country model, one economically developed and the other underdeveloped, to solve for optimal tax policies necessary to achieve the efficient allocation of economic resources in an economy with a durable good available for global reuse without policy measures in the underdeveloped country. A tax in the developed country on purchases of the new durable good combined with a waste tax set below the domestic external cost of disposal is sufficient for global efficiency. The implication of allowing free global trade in electronic waste is also examined, where optimal policy resembles a global deposit-refund system.

Essays in Macro Finance

I study the link between capital markets and sources of macroeconomic risk. In chapter 1 I show that expected inflation risk is priced in the cross section of stock returns even after controlling for cash flow growth and volatility risks. Motivated by this evidence I study a long run risk model with a built-in inflation non-neutrality channel that allows me to decompose the real stochastic discount factor into news about current and expected cash flow growth, news about expected inflation and news about volatility. The model can successfully price a broad menu of assets and provides a setting for analyzing cross sectional variation in expected inflation risk premium. For industries like retail and durable goods inflation risk can account for nearly a third of the overall risk premium while the energy industry and a broad commodity index act like inflation hedges. Nominal bonds are exposed to expected inflation risk and have inflation premiums that increase with bond maturity. The price of expected inflation risk was very high during the 70's and 80's, but has come down a lot since being very close to zero over the past decade. On average, the expected inflation price of risk is negative, consistent with the view that periods of high inflation represent a "bad" state of the world and are associated with low economic growth and poor stock market performance. In chapter 2 I look at the way capital markets react to predetermined macroeconomic announcements. I document significantly higher excess returns on the US stock market on macro release dates as compared to days when no macroeconomic news hit the market. Almost the entire equity premium since 1997 is being realized on days when macroeconomic news are released. At high frequency, there is a pattern of returns increasing in the hours prior to the pre-determined announcement time, peaking around the time of the announcement and dropping thereafter.

Market work and household production in Brazil

This thesis is composed of three papers in which the research questions are related to the double burden that accrues to Brazilian women. The first and second papers address this issue by looking at expenditure decisions about home production. The first paper examines whether the expenditure decisions about production goods, such as white appliances, relative to entertainment goods, such as TVs, are the outcome of a bargaining process between husbands and wives. The second paper looks at the demand for maid services and for production durable goods, examining the extent to which other household members substitute for maid services and durable goods in home production. The third paper addresses the effects of Brazilian women's double burden on their labor market participation by examining whether the occupational choice of Brazilian women is affected by their gender roles and whether entry into other occupations that are not identified as female occupations has become easier since the introduction of anti-discrimination laws in the labor market. The first paper combines two Brazilian data sets: a Brazilian household expenditure survey, Pesquisa de Orçamento Familiares (POF), and a Brazilian household survey, Pesquisa Nacional Por Amostra de Domicílios (PNAD). The results of the first paper indicate that the decision about durable goods ownership is the outcome of a bargaining process between husband and wife. The test on the coefficients of the marriage market variable and the indicators of households in which only the wife and households in which only the husband makes expenditure decisions corroborate the expectations about wives' preferences for production goods. The same data sets as the first paper are used in the second paper. The finding of the second paper indicates that if the marriage market is favorable to women, that is if the ratio of women to men goes from 1.07 to 0.96, the increment in the household probability of owning at least one maid's substitute durable goods is equivalent to 24% the impact of moving a household up one income quintile. Moreover, the results indicate that daughters' time substitutes for wives' time and maid services in home production. Parents may want daughters trained in home production to be able to perform their future role as wives. However, this training comes at a cost to daughters' investment in formal education, narrowing their future career options. The data used in the third paper come from a Brazilian household survey, Pesquisa Nacional Por Amostra de Domicílios (PNAD). Gender roles are responsible for women to choose female-dominated occupations, married women are 1.14 times more likely to work in female-dominated occupations and having a child six years and older increases on average by 12% the probability that women work in female-dominated occupations instead of genderintegrated occupations in 2001. However, it becomes easier for all types of women to enter into male-dominated and gender-integrated occupations in 2001 compared to 1981.

Optimal sequence of landfills in solid waste management

Given that landfills are depletable and replaceable resources, the right approach, when dealing with landfill management, is that of designing an optimal sequence of landfills rather than designing every single landfill separately. In this paper we use Optimal Control models, with mixed elements of both continuous and discrete time problems, to determine an optimal sequence of landfills, as regarding their capacity and lifetime. The resulting optimization problems involve splitting a time horizon of planning into several subintervals, the length of which has to be decided. In each of the subintervals some costs, the amount of which depends on the value of the decision variables, have to be borne. The obtained results may be applied to other economic problems such as private and public investments, consumption decisions on durable goods, etc.

Heart versus mind : the functions of emotional and cognitive loyalty

While there is substantial research on attitudinal and behavioral loyalty, the deconstruction of attitudinal loyalty into its two key components – emotional and cognitive loyalty – has been largely ignored. Despite the existence of managerial strategies aimed at increasing each of these two components, there is little academic research to support these managerial efforts. This paper seeks to advance the understanding of emotional and cognitive brand loyalty by examining the psychological function that these dimensions of brand loyalty perform for the consumer. We employ Katz’s (1960) four functions of attitudes (utilitarian, knowledge, value-expression, ego-defence) to investigate this question. Surveys using a convenience sample were completed by 268 consumers in two metropolitan cities on a variety of goods, services and durable products. The relationship between the functions and dimensions of loyalty were examined using MANOVA. The results show that both the utilitarian and knowledge functions of loyalty are significantly positively related to cognitive loyalty while the ego-defensive function of loyalty is significantly positively related to emotional loyalty. The results for the value-expressive function of loyalty were nonsignificant.

Experts vs. Discounters: Consumer Free Riding and Experts Withholding Advice in Markets for Credence Goods

This paper studies the incentives for credence goods experts to invest effort in diagnosis if effort is both costly and unobservable, and if they face competition by discounters who are not able to perform a diagnosis. The unobservability of diagnosis effort and the credence characteristic of the good induce experts to choose incentive compatible tariff structures. This makes them vulnerable to competition by discounters. We explore the conditions under which honestly diagnosing experts survive competition by discounters; we identify situations in which experts misdiagnose consumers in order to prevent them from free-riding on experts' advice; and we discuss policy options to solve the free-riding consumers–cheating experts problem.

The economics of credence goods: An experimental investigation of the role of verifiability, liability, competition and reputation in credence goods markets

Credence goods markets are characterized by asymmetric information between sellers and consumers that may give rise to inefficiencies, such as under- and overtreatment or market break-down. We study in a large experiment with 936 participants the determinants for efficiency in credence goods markets. While theory predicts that either liability or verifiability yields efficiency, we find that liability has a crucial, but verifiability only a minor effect. Allowing sellers to build up reputation has little influence, as predicted. Seller competition drives down prices and yields maximal trade, but does not lead to higher efficiency as long as liability is violated.

Damaged goods: riskiness and LGBT young peoples’ interactions with police

For some time now, research has suggested lesbian, gay, bisexual and transgender (LGBT) young people are ‘at-risk’ of victimisation and legally ‘risky’. Relatively few studies have examined how ‘risk factor’ research influences the everyday lives of LGBT young people. This paper reports how the experiences of police by 35 LGBT young people in Brisbane, Queensland reflected discourses about LGBT riskiness and how danger informed their interactions with police in public spaces. The participants specifically note how looking at-risk or looking risky affected their experiences of policing. The paper will conclude with recommendations for improved future policing practice.

Luxury fashion: The role of innovation as a key contributing factor in the development of luxury fashion goods and sustainable fashion design

Luxury is a quality that is difficult to define as the historical concept of luxury appears to be both dynamic and culturally specific. The everyday definition explains a ‘luxury’ in relation to a necessity: a luxury (product or service) is defined as something that consumers want rather than need. However, the growth of global markets has seen a boom in what are now referred to as ‘luxury brands’. This branding of products as luxury has resulted in a change in the way consumers understand luxury goods and services. In their attempts to characterize a luxury brand, Fionda & Moore in their article “The anatomy of a Luxury Brand” summarize a range of critical conditions that are in addition to product branding “... including product and design attributes of quality, craftsmanship and innovative, creative and unique products” (Fionda & Moore, 2009). For the purposes of discussing fashion design however, quality and craftsmanship are inseparable while creativity and innovation exist under different conditions. The terms ‘creative’ and ‘innovative’ are often used inter-changeably and are connected with most descriptions of the design process, defining ‘design’ and ‘fashion’ in many cases. Christian Marxt and Fredrik Hacklin identify this condition in their paper “Design, product development, innovation: all the same in the end?”(Marxt & Hacklin, 2005) and suggest that design communities should be aware that the distinction between these terms, whilst once quite definitive, is becoming narrow to a point where they will mean the same thing. In relation to theory building in the discipline this could pose significant problems. Brett Richards (2003) identifies innovation as different from creativity in that innovation aims to transform and implement rather than simply explore and invent. Considering this distinction, in particular relation to luxury branding, may affect the way in which design can contribute to a change in the way luxury fashion goods might be perceived in a polarised fashion market, namely suggesting that ‘luxury’ is what consumers need rather than the ‘pile it high, sell it cheap’ fashion that the current market dynamic would indicate they want. This paper attempts to explore the role of innovation as a key contributing factor in luxury concepts, in particular the relationship between innovation and creativity, the conditions which enable innovation, the role of craftsmanship in innovation and design innovation in relation to luxury fashion products. An argument is presented that technological innovation can be demonstrated as a common factor in the development of luxury fashion product and that the connection between designer and maker will play an important role in the development of luxury fashion goods for a sustainable fashion industry.

Luxury fashion : the significance of luxury fashion goods for sustainable fashion design

This paper extends the work of “Luxury fashion : the role of innovation as a key contributing factor in the development of luxury fashion goods and sustainable fashion design” (Finn, 2011). The discussion here begins with the observation that post consumer textile waste remains a major obstacle in realising a model of sustainable fashion design and production however, amongst the millions of tonnes of textile and clothing sent to landfill each year there is little evidence of authentic luxury branded goods ending life as landfill. The sustainable fashion movement often support approaches such as fashion up-cycle, re-cycle and cradle to cradle solutions. This paper argues that the priority should be to break the cycle of consumerism as an immediate intervention in ongoing unsustainable (and in some cases unethical) practices involved in the production of fashion goods. The connections between maker and consumer are explored through object analysis and the findings raise questions of the separation between luxury fashion goods and fashion goods that bear luxury fashion branding. This paper suggests that unethical and subversive exploitation of these connections may be used to promote increased consumerism while at the same time purporting exclusivity and superior craftsmanship.

Verifiability in Markets for Credence Goods

Theory predicts that efficiency prevails on credence goods markets if customers are able to verify which quality they receive from an expert seller. In a series of experiments with endogenous prices we observe that variability fails to result in efficient provision behavior and leads to very similar results as a setting without variability. Some sellers always provide appropriate treatment even if own money maximization calls for over- or undertreatment. Overall our endogenous price-results suggests that both inequality aversion and a taste for efficiency play an important role for experts provision behavior. We contrast the implications of those two motivations theoretically and discriminate between them empirically using a �xed-price design. We then classify experimental experts according to their provision behavior.