Do Households Have Rational Expectations on Future Consumption? Evidence from the Finnish Consumer Survey

Ever since its initial introduction some fifty years ago, the rational expectations paradigm has dominated the way economic theory handles uncertainty. The main assertion made by John F. Muth (1961), seen by many as the father of the paradigm, is that expectations of rational economic agents should essentially be equal to the predictions of relevant economic theory, since rational agents should use information available to them in an optimal way. This assumption often has important consequences on the results and interpretations of the models where it is applied. Although the rational expectations assumption can be applied to virtually any economic theory, the focus in this thesis is on macroeconomic theories of consumption, especially the Rational Expectations–Permanent Income Hypothesis proposed by Robert E. Hall in 1978. The much-debated theory suggests that, assuming that agents have rational expectations on their future income, consumption decisions should follow a random walk, and the best forecast of future consumption level is the current consumption level. Then, changes in consumption are unforecastable. This thesis constructs an empirical test for the Rational Expectations–Permanent Income Hypothesis using Finnish Consumer Survey data as well as various Finnish macroeconomic data. The data sample covers the years 1995–2010. Consumer survey data may be interpreted to directly represent household expectations, which makes it an interesting tool for this particular test. The variable to be predicted is the growth of total household consumption expenditure. The main empirical result is that the Consumer Confidence Index (CCI), a balance figure computed from the most important consumer survey responses, does have statistically significant predictive power over the change in total consumption expenditure. The history of consumption expenditure growth itself, however, fails to predict its own future values. This indicates that the CCI contains some information that the history of consumption decisions does not, and that the consumption decisions are not optimal in the theoretical context. However, when conditioned on various macroeconomic variables, the CCI loses its predictive ability. This finding suggests that the index is merely a (partial) summary of macroeconomic information, and does not contain any significant private information on consumption intentions of households not directly deductible from the objective economic variables. In conclusion, the Rational Expectations–Permanent Income Hypothesis is strongly rejected by the empirical results in this thesis. This result is in accordance with most earlier studies conducted on the topic.

A consumer survey designed to identify attitudes, knowledge, acceptance, and use of assistive listening devices in public facilities

This paper presents a consumer survey of hearing-impaired persons used to identify their attitudes, knowledge, acceptance, and use of assistive listening devices in public facilities.

Consumer survey statistics; report [submitted to] the Subcommittee on Economic Statistics of the Joint Committee on the Economic Report.

Includes bibliography.

National consumer survey of medical costs and voluntary health insurance. Summary report[s] 1-4.

Mode of access: Internet.

The acceptability of isoflavones as a treatment of menopausal symptoms: a European survey among postmenopausal women

Objective: To investigate determinants of the acceptability of isoflavone products among postmenopausal women with regard to social and lifestyle factors, dietary habits, health concerns, food beliefs, menopausal symptoms and therapies, and to elucidate preferences for specific products. Methods: A consumer survey was conducted among postmenopausal women in four European countries (Germany, Denmark, Italy and the UK), including a total of 465 respondents. Results: The declared acceptability of isoflavones was highest in Germany (80%), followed by Italy (75%), the UK (59%) and Denmark (55%; p < 0.001). Among other factors, prior information about isoflavones (odds ratio (OR) 2.64, 95% confidence interval (CI) 1.54-4.51, p < 0.001) and belief that foods can be used to treat medical conditions (OR 2.18, 95% CI 1.17-4.05, p=0.014) were the strongest predictors of potential acceptability. The preferred forms in which isoflavones might be taken differed markedly between countries. Conclusions: Information about the health effects of isoflavones and health-diet links should be considered the most important factors in attempts to influence the potential acceptability of isoflavone products. Foods enriched with isoflavones need to be developed with regard to specific cultural demands in order to assure consumer acceptance on the marketplace.

Consumer attitudes to injurious pecking in free range egg production

Free range egg producers face continuing problems from injurious pecking (IP) which has financial consequences for farmers and poor welfare implications for birds. Beak trimming has been practised for many years to limit the damage caused by IP, but with the UK Government giving notification that they intend to ban beak trimming in 2016, considerable efforts have been made to devise feasible housing, range and management strategies to reduce IP. A recent research project investigated the efficacy of a range of IP reducing management strategies, the mean costs of which came to around 5 pence per bird. Here, the results of the above project’s consumer survey are presented: consumers’ attitudes to free range egg production are detailed showing that, whilst consumers had a very positive attitude towards free range eggs, they were especially uninformed about some aspects of free range egg production. The contingent valuation technique was used to estimate the price premium consumers would be prepared to pay to ensure that hens do not suffer from IP: this was calculated as just over 3% on top of the prevailing retail price of free range eggs. These findings reinforce other studies that have found that whilst consumers are not generally well-informed about certain specific welfare problems faced by animals under free range conditions, they are prepared to pay to improve animal welfare. Indeed, the study findings suggest that producers could obtain an additional price premium if they demonstrate the welfare provenance of their eggs, perhaps through marketing the eggs as coming from birds with intact beaks. This welfare provenance issue could usefully be assured to consumers by the introduction of a mandatory, single, accredited EU-wide welfare-standards labelling scheme.

Innovation in construction : a case study of the Australian context

The dominant economic paradigm currently guiding industry policy making in Australia and much of the rest of the world is the neoclassical approach. Although neoclassical theories acknowledge that growth is driven by innovation, such innovation is exogenous to their standard models and hence often not explored. Instead the focus is on the allocation of scarce resources, where innovation is perceived as an external shock to the system. Indeed, analysis of innovation is largely undertaken by other disciplines, such as evolutionary economics and institutional economics. As more has become known about innovation processes, linear models, based on research and development or market demand, have been replaced by more complex interactive models which emphasise the existence of feedback loops between the actors and activities involved in the commercialisation of ideas (Manley 2003). Currently dominant among these approaches is the national or sectoral innovation system model (Breschi and Malerba 2000; Nelson 1993), which is based on the notion of increasingly open innovation systems (Chesbrough, Vanhaverbeke, and West 2008). This chapter reports on the ‘BRITE Survey’ funded by the Cooperative Research Centre for Construction Innovation which investigated the open sectoral innovation system operating in the Australian construction industry. The BRITE Survey was undertaken in 2004 and it is the largest construction innovation survey ever conducted in Australia. The results reported here give an indication of how construction innovation processes operate, as an example that should be of interest to international audiences interested in construction economics. The questionnaire was based on a broad range of indicators recommended in the OECD’s Community Innovation Survey guidelines (OECD/Eurostat 2005). Although the ABS has recently begun to undertake regular innovation surveys that include the construction industry (2006), they employ a very narrow definition of the industry and only collect very basic data compared to that provided by the BRITE Survey, which is presented in this chapter. The term ‘innovation’ is defined here as a new or significantly improved technology or organisational practice, based broadly on OECD definitions (OECD/Eurostat 2005). Innovation may be technological or organisational in nature and it may be new to the world, or just new to the industry or the business concerned. The definition thus includes the simple adoption of existing technological and organisational advancements. The survey collected information about respondents’ perceptions of innovation determinants in the industry, comprising various aspects of business strategy and business environment. It builds on a pilot innovation survey undertaken by PricewaterhouseCoopers (PWC) for the Australian Construction Industry Forum on behalf of the Australian Commonwealth Department of Industry Tourism and Resources, in 2001 (PWC 2002). The survey responds to an identified need within the Australian construction industry to have accurate and timely innovation data upon which to base effective management strategies and public policies (Focus Group 2004).

Marketing Ecológico: análisis teórico, estudio empírico a consumidores y análisis del diferencial de precios

ESPAÑOL:Este Trabajo de Fin de Grado se centra en el estudio, tanto teórico como empírico, de cuestiones relacionadas esencialmente con el conocimiento, consumo y marketing de productos ecológicos. Comienza con el marco teórico basado en la revisión bibliográfica de los trabajos publicados sobre la materia que se adjuntan en la bibliografía relacionada al final. Posteriormente, se presentan los resultados de una encuesta que realizamos a 63 personas que realizan habitualmente la compra de su hogar y que tuvo como objeto descubrir el grado de conocimiento que tienen sobre los productos eco, el consumo particular que hacen de los mismos y las razones que les impulsan a su consumo o que frenan el mismo, diferenciando el caso de los productos ecológicos de alimentación de los demás productos ecológicos. Se completa el trabajo con la presentación de un análisis empírico del diferencial de precios de los productos ecológicos frente a los de los productos convencionales de similares características. Para ello nos centramos exclusivamente en los productos (ecológicos y no ecológicos) vendidos en la plataforma de venta on line por una gran empresa española de distribución de base alimentaria, concretamente, Eroski.

Enhancing the health-status of processed meats through ingredient manipulation and its effects on sensory and physiochemical product attributes

An important component of this Ph.D. thesis was to determine the European consumers’ views on processed meats and bioactive compounds. Thus a survey gathered information form over 500 respondents and explored their perceptions on the healthiness and purchase-ability for both traditional and functional processed meats. This study found that the consumer was distrustful towards processed meat, especially high salt and fat content. Consumers were found to be very pro-bioactive compounds in yogurt style products but unsure of their feelings on the idea of them in meat based products, which is likely due to the lack of familiarity to these products. The work in this thesis also centred on the applied acceptable reduction of salt and fat in terms of consumer sensory analysis. The products chosen ranged in the degree of comminution, from a coarse beef patty to a more fine emulsion style breakfast sausage and frankfurter. A full factorial design was implemented which saw the production of twenty beef patties with varying concentrations of fat (30%, 40%, 50%, 60% w/w) and salt (0.5%, 0.75%, 1.0%, 1.25%, 1.5% w/w). Twenty eight sausage were also produced with varying concentrations of fat (22.5%, 27.5%, 32.5%, 37.5% w/w) and salt (0.8%, 1%, 1.2%, 1.4%, 1.6%, 2%, 2.4% w/w). Finally, twenty different frankfurters formulations were produced with varying concentrations of fat (10%, 15%, 20%, 25% w/w) and salt (1%, 1.5%, 2%, 2.5%, 3% w/w). From these products it was found that the most consumer acceptable beef patty was that containing 40% fat with a salt level of 1%. This is a 20% decrease in fat and a 50% decrease in salt levels when compared to commercial patty available in Ireland and the UK. For sausages, salt reduced products were rated by the consumers as paler in colour, more tender and with greater meat flavour than higher salt containing products. The sausages containing 1.4 % and 1.0 % salt were significantly (P<0.01) found to be more acceptable to consumers than other salt levels. Frankfurter salt levels below 1.5% were shown to have a negative effect on consumer acceptability, with 2.5% salt concentration being the most accepted (P<0.001) by consumers. Samples containing less fat and salt were found to be tougher, less juicy and had greater cooking losses. Thus salt perception is very important for consumer acceptability, but fat levels can be potentially reduced without significantly affecting overall acceptability. Overall it can be summarised that the consumer acceptability of salt and fat reduced processed meats depends very much on the product and generalisations cannot be assumed. The study of bio-actives in processed meat products found that the reduced salt/fat patties fortified with CoQ10 were rated as more acceptable than commercially available products for beef patties. The reduced fat and salt, as well as the CoQ10 fortified, sausages were found to compare quite well to their commercial counterparts for overall acceptability, whereas commercial frankfurters were found to be the more favoured in comparison to reduced fat and CoQ10 fortified Frankfurters.

An Investigation into the Efficacy of a pH-Sensitive Material for Milk Spoilage Detection

Ambiguous expiration dates on milk cartons can mislead consumers into prematurely disposing unspoiled milk and potentially drinking spoiled milk. These misconceptions can lead to wastage that harms the environment, or potential discomfort and illness. The incorporation of pH-sensitive indicators into plastic milk cartons has the potential to replace stamped expiration dates as the traditional method of milk spoilage indication. We studied the correlation between bacteria count and milk pH to establish pH measurement as an effective indicator of milk quality. We then developed a method for incorporating bromothymol blue, a pH-sensitive color-changing dye, into a hydrogel made of polyacrylamide. This hydrogel can be added to existing packaging for milk or other products with detectable pH changes. Additionally, we conducted a consumer survey and analyzed current food packaging trends in the market. Our research indicates that a spoilage-indicating milk carton could have strong market potential as food industries increasingly adopt intelligent packaging designs.

Role of social pressure as a key contributor of materialism and related status consumption

“At resale stores I have seen brand new clothes with original price tag still hanging from the sleeve. Some children have so many toys that they stay frustrated, not knowing which one to pick up for their next amusement. Presumably sensible adults trade in perfectly good cars just to have something shinier and newer. Didn’t us once live productive normal lives, without all these gadgets” [Cunningham (2005)]. During late eighties, nearly forty four percent of the participants, who took part in a consumer survey conducted in the US, responded positively to the question “My closets are filled with still 2 unopened items” [Faber and O’Guinn (1988)]. Reading such excerpts does not greatly surprise us anymore; as such reports have become common now. For many people shopping has moved beyond something that caters to their needs and wants and has become a hobby [Cunningham (2005)], an activity that they engage in to satisfy their hedonistic or pleasure-seeking goals [Ramnathan and Menon(2006), O’Cass and McEween (2004), Faber and O’Guinn (1989)]. Others look at their new possession as something that fills a void in their lives [Belk (1985), Diener et al. (1993)].

How do consumers perceive organic food from different geographic origins? Evidence from Hong Kong and Shanghai

The objective of this paper is to understand how Chinese consumers perceive certified organic food, especially the differences between locally and nationally produced organic food compared to food produced overseas. In 2012, a consumer survey was conducted at supermarkets in Hong Kong and Shanghai (N=245). Participants were asked for their perception on four different food origins: locally produced organic food, organic food from China, imported organic food, and locally produced conventional food. Consumers in Hong Kong had a positive attitude towards local organic food and imported organic food. However, they were sceptical about organic food from China, in particular regarding chemical residues and the trustworthiness of producers. Consumers in Shanghai, in contrast, had a positive attitude towards all three tested geographical origins of organic food. Overall, the results suggest that it is challenging for marketers to promote and boost the sales of China-produced organic food in China. Better communication is essential to convince consumers that organic food from China is of similar quality as organic food produced elsewhere.