Environmental consciousness, economic gain and consumer choice of energy efficient appliances in Thailand, China and India

In developing economies, consumption of electricity in residential and commercial sectors increased with economic development. In order to identify the factors for effective facilitation of standard and labeling programs, this article explores factors that affect consumer choice to energy-efficient products. Main findings are as follows: (1)Consumers in Thailand shows the highest awareness to environmental friendly concepts, followed by India and China.(2) Chosen labeled products include air-conditioners, TVs, refrigerators and washing machines, but not some popular products such as ceiling fans, electric fans or mobile phones. (3) Consumer who has higher energy conservation perception will buy energy efficient products.(4) Consumers in China, India and Thailand are sensitive to energy efficiency of products, primarily because they lead to less expenditure on electricity. (5) Labeling works to make levels of the energy efficiency of products more visible and thus helped consumers to choose the products.

Impact of seasonality-adjusted flexible microcredit on repayment and food consumption : experimental evidence from rural Bangladesh

The mismatch between credit repayments and income seasonality poses a challenge for microfinance institutions (MFIs) working in developing countries. For instance, in northern Bangladesh, income and consumption downfalls during the lean season after the transplanting of major paddy crops are a serious threat to a household's economy. Poor landless agricultural wage laborers suffer the most owing to this seasonality as they face difficulties in smoothing their consumption. However, in designing microcredit products, MFIs do not usually provide flexibility or seasonal adjustment during the lean season. This is mainly because MFIs are afraid that such flexibility might break the repayment discipline of borrowers, resulting in higher default rates. We thus conducted a randomized controlled trial in 2011-12 in northern Bangladesh to empirically test whether seasonality-adjusted flexible microcredit leads to an increase in repayment problems for MFIs as well as whether it can increase and stabilize consumption of borrower households. Our results suggest no statistically discernible difference among the treatment arms in case of default, overdue amount, or repayment frequency. On the other hand, we find no positive impact of repayment flexibility on immediate food consumption during the period of seasonality, except for in-kind full moratorium treatment group. After a year of initial intervention, however, we see positive changes in food intake during the lean season. Thus, our preliminary results are in favor of seasonality-adjusted flexible microcredit.

Quasi-experimental evidence on the drivers of index-based livestock insurance demand in Southern Ethiopia

Microinsurance is widely considered an important tool for sustainable poverty reduction, especially in the face of increasing climate risk. Although index-based microinsurance, which should be free from the classical incentive problems, has attracted considerable attention, uptake rates have generally been weak in low-income rural communities. We explore the purchase patterns of index-based livestock insurance in southern Ethiopia, focusing in particular on the role of accurate product comprehension and price, including the prospective impact of temporary discount coupons on subsequent period demand due to price anchoring effects. We find that randomly distributed learning kits contribute to improving subjects' knowledge of the products; however, we do not find strong evidence that the improved knowledge per se induces greater uptake. We also find that reduced price due to randomly distributed discount coupons has an immediate, positive impact on uptake, without dampening subsequent period demand due to reference-dependence associated with price anchoring effects.

How does contract design affect the uptake of microcredit among the ultra-poor? : experimental evidence from the river islands of Northern Bangladesh

Despite the professed claims of microcredit alleviating poverty, little is known about what kind of credit contract is suitable for extremely poor households, also called the ultra-poor. To fill this knowledge gap, we initiated a field experiment in the river islands of northern Bangladesh, where a substantial portion of dwellers could be categorized as ultra-poor due to cyclic floods. We randomly offered four types of loans to such dwellers: regular small cash loans with one-year maturity, large cash loans with three-year maturity both with and without a one-year grace period, and in-kind livestock loans with three-year maturity and a one-year grace period. We compared uptake rates as well as the determinants of uptake and found that the uptake rate is the lowest for the regular contract, followed by the in-kind contract. Contrary to prior belief, we also found that the microcredit demand by the ultra-poor is not necessarily small, and in particular the ultra-poor are significantly more likely to join a microcredit program than the moderately poor if a grace period with longer maturity is attached to a large amount of credit, irrespective of whether the credit is provided in cash or in kind. This paper provides evidence that a typical microcredit contract with one-year maturity and without a grace period is not attractive to the ultra-poor. Microfinance institutions may need to design better credit contracts to address the poor's needs.

Food quality awareness : cases from shrimp producers in Thailand and vegetable producers in Vietnam

The high number of import rejections of food commodities suggests that producers in exporting countries are not complying with established standards. To understand why this is the case, we explore the behavior of producers and consumers in developing countries. First, we examine the successful transformation of production practices adopted by shrimp producers in Thailand. In support of the dramatic change in practices, we observe an important role played by the public sector in providing a means to visualize chemical residues and to control processes upstream of the supply chain via a registration system and a traceability system called Movement Document. Furthermore, very active information sharing by the private sector contributes to the dissemination of useful technical and market information among producers. We also examine the knowledge and perceptions of consumers with respect to food safety in Vietnam. We find that consumers in Hanoi and Ho Chi Minh City behave differently toward the third-party certification VietGAP, probably owing to differences in the history of market mechanisms between the two cities.

Bayesian Analysis for a Theory of Random Consumer Demand: The Case of Indivisible Goods

McCausland (2004a) describes a new theory of random consumer demand. Theoretically consistent random demand can be represented by a \"regular\" \"L-utility\" function on the consumption set X. The present paper is about Bayesian inference for regular L-utility functions. We express prior and posterior uncertainty in terms of distributions over the indefinite-dimensional parameter set of a flexible functional form. We propose a class of proper priors on the parameter set. The priors are flexible, in the sense that they put positive probability in the neighborhood of any L-utility function that is regular on a large subset bar(X) of X; and regular, in the sense that they assign zero probability to the set of L-utility functions that are irregular on bar(X). We propose methods of Bayesian inference for an environment with indivisible goods, leaving the more difficult case of indefinitely divisible goods for another paper. We analyse individual choice data from a consumer experiment described in Harbaugh et al. (2001).

Economic well-being and poverty among the elderly: an analysis based on a collective consumption model

We apply the collective consumption model of Browning, Chiappori and Lewbel (2006) to analyse economic well-being and poverty among the elderly. The model focuses on individual preferences, a consumption technology that captures the economies of scale of living in a couple, and a sharing rule that governs the intra-household allocation of resources. The model is applied to a time series of Dutch consumption expenditure surveys. Our empirical results indicate substantial economies of scale and a wifeís share that is increasing in total expenditures. We further calculated poverty rates by means of the collective consumption model. Collective poverty rates of widows and widowers turn out to be slightly lower than traditional ones based on a standard equivalence scale. Poverty among women (men) in elderly couples, however, seems to be heavily underestimated (overestimated) by the traditional approach. Finally, we analysed the impact of becoming a widow(er). Based on cross-sectional evidence, we find that the drop (increase) in material well-being following the husbandís death is substantial for women in high (low) expenditure couples. For men, the picture is reversed.

Empirical Analysis of Credit Risk Regime Switching and Temporal Conditional Default Correlation in Credit Default Swap Valuation: The Market liquidity effect

In this paper, we extend the debate concerning Credit Default Swap valuation to include time varying correlation and co-variances. Traditional multi-variate techniques treat the correlations between covariates as constant over time; however, this view is not supported by the data. Secondly, since financial data does not follow a normal distribution because of its heavy tails, modeling the data using a Generalized Linear model (GLM) incorporating copulas emerge as a more robust technique over traditional approaches. This paper also includes an empirical analysis of the regime switching dynamics of credit risk in the presence of liquidity by following the general practice of assuming that credit and market risk follow a Markov process. The study was based on Credit Default Swap data obtained from Bloomberg that spanned the period January 1st 2004 to August 08th 2006. The empirical examination of the regime switching tendencies provided quantitative support to the anecdotal view that liquidity decreases as credit quality deteriorates. The analysis also examined the joint probability distribution of the credit risk determinants across credit quality through the use of a copula function which disaggregates the behavior embedded in the marginal gamma distributions, so as to isolate the level of dependence which is captured in the copula function. The results suggest that the time varying joint correlation matrix performed far superior as compared to the constant correlation matrix; the centerpiece of linear regression models.

Nonparametric tests of collectively rational consumption behavior: an integer programming procedure

We present an IP-based nonparametric (revealed preference) testing procedure for rational consumption behavior in terms of general collective models, which include consumption externalities and public consumption. An empirical application to data drawn from the Russia Longitudinal Monitoring Survey (RLMS) demonstrates the practical usefulness of the procedure. Finally, we present extensions of the testing procedure to evaluate the goodness-of-…t of the collective model subject to testing, and to quantify and improve the power of the corresponding collective rationality tests.

An Afriat theorem for the collective model of household consumption

We provide a nonparametric 'revealed preference’ characterization of rational household behavior in terms of the collective consumption model, while accounting for general (possibly non-convex) individual preferences. We establish a Collective Axiom of Revealed Preference (CARP), which provides a necessary and sufficient condition for data consistency with collective rationality. Our main result takes the form of a ‘collective’ version of the Afriat Theorem for rational behavior in terms of the unitary model. This theorem has some interesting implications. With only a finite set of observations, the nature of consumption externalities (positive or negative) in the intra-household allocation process is non-testable. The same non-testability conclusion holds for privateness (with or without externalities) or publicness of consumption. By contrast, concavity of individual utility functions (representing convex preferences) turns out to be testable. In addition, monotonicity is testable for the model that assumes all household consumption is public.

Relationship Drivers in Provider - Consumer Relationships. Empirical Studies of Customer Loyalty Programs (första upplagan slutsåld / first edition sold out, 'print on demand' 60 €)

The study addressed a phenomenon that has become common marketing practice, customer loyalty programs. Although a common type of consumer relationship, there is limited knowledge of its nature. The purpose of the study was to create structured understanding of the nature of customer relationships from both the provider’s and the consumer’s viewpoints by studying relationship drivers and proposing the concept of relational motivation as a provider of a common framework for the analysis of these views. The theoretical exploration focused on reasons for engaging in customer relationships for both the consumer and the provider. The themes of buying behaviour, industrial and network marketing and relationship marketing, as well as the concepts of a customer relationship, customer loyalty, relationship conditions, relational benefits, bonds and commitment were explored and combined in a new way. Concepts from the study of business-to-business relationships were brought over and their power in explaining the nature of consumer relationships examined. The study provided a comprehensive picture of loyalty programs, which is an important contribution to the academic as well as the managerial discussions. The consumer study provided deep insights into the nature of customer relationships. The study provides a new frame of reference to support the existing concepts of loyalty and commitment with the introduction of the relationship driver and relational motivation concepts. The result is a novel view of the nature of customer relationships that creates new understanding of the forces leading to loyal behaviour and commitment. The study concludes with managerial implications.

Consumer Expertise or Credit Risk? An empirical analysis of mortgage pricing

Loan mortgage interest rates are usually the result of a bank-customer negotiation process. Credit risk, consumer cross-buying potential, bundling, financial market competition and other features affecting the bargaining power of the parties could affect price. We argue that, since mortgage loan is a complex product, consumer expertise could be a relevant factor for mortgage pricing. Using data on mortgage loan prices for a sample of 1055 households for the year 2005 (Bank of Spain Survey of Household Finances, EFF-2005), and including credit risk, costs, potential capacity of the consumer to generate future business and bank competition variables, the regression results indicate that consumer expertise-related metrics are highly significant as predictors of mortgage loan prices. Other factors such as credit risk and consumer cross-buying potential do not have such a significant impact on mortgage prices. Our empirical results are affected by the credit conditions prior to the financial crisis and could shed some light on this issue.

Brand affinity and consumer repurchase behaviour : an empirical analysis

This research established a construct termed brand affinity, comprising the measures of anticipation of usage, social attraction, commitment, loyalty, and trust. In the context of a highly uncertain, intermittently available service, it was found that brand affinity had greater influence over consumers' repurchase intentions than the typical antecedents of overall and attribute level satisfaction.

The Economics of State Aid for the Rescue and Restructuring of Firms in Difficulty: Theoretical Considerations, Empirical Analysis and Proposals for Reform. Bruges European Economic Research (BEER) Papers 27/September 2013

State aid for rescue and restructuring (R&R) of companies in difficulty causes a significant distortion of competition. It prevents the market from eliminating inefficient companies. Because of this, the European Commission has to be specially strict when it assesses rescue or restructuring aid. This paper examines recent cases of corporate restructuring partly funded with public money. It explains the main aspects of the current guidelines which are applicable to R&R State Aid and establishes a theoretical framework for the economic assessment of R&R aid. It then analyses decisions adopted by the European Commission concerning R&R state aid during the period 2000-2013. It finds that there is little economic rationale in the granting of R&R aid. The paper concludes by applying the lessons drawn from the empirical analysis to the anticipated revision of the R&R guidelines in the context of the State Aid Modernisation process.