intangible capital market share and corporate strategy this paper theoretically and empirically identifies the determinants of firm profitability and market share for twelve broadly defined us manufacturing industry groups the effects of advertising research and development and diversification on profitability and market share are econometrically tested for each industry group and corporate strategy implications of the results are considered one major result of the analysis is that research and development r d tends to be much more effective as a means of enhancing firm profitability than advertising and research and development spending decisions are more closely related to the profitability of r d than advertising decisions are related to the profitability of advertising

middlemen as guarantors of quality abstract we analyze an experience good model with producer moral hazard which is based on shapiro quarterly journal of economics 1983 98 659 679 we develop conditions under which a good will be sold through a middleman instead of being sold directly by the producer when selling costs may even be increased by the presence of middlemen middlemen help to alleviate the producer moral hazard problem by dropping a producer s good and lowering her future sales if the good is not of its claimed quality the middleman engages in this policing activity in order to maintain his own reputation as a seller of high quality goods

fuel poverty in the uk is there a difference between rural and urban areas abstract fuel poverty is a significant policy issue an argument often made is that rural households are more likely to be fuel poor due to the nature of rural housing stock and the more limited choice of energy sources in rural areas this paper uses panel data to compare the level and dynamics of fuel poverty in rural and urban areas of the uk in addition to descriptive analysis discrete hazard models of fuel poverty exit and re entry are estimated and used to assess the influence of housing and personal characteristics on the time spent in fuel poverty the results indicate that on average the experience of fuel poverty in urban areas is longer with a higher probability of fuel poverty persistence however on average the rural fuel poor appear more vulnerable to energy price increases while living in private accommodation or a flat increases their probability of remaining fuel poor relative to their urban counterparts these results indicate policy effectiveness may differ across rural and urban space however they also emphasise the limits of spatial targeting monitoring the dynamics of fuel poverty is important for ensuring that policy targets are effective and reaching those most in need

objective vs subjective fuel poverty and self assessed health abstract identification of fuel poverty and its impact on individuals is a growing social issue classifying households using subjective measures of fuel poverty yields different results than when objective measures are used moreover there are assessment related difficulties in establishing the effects on health and wellbeing which hinders policy design to tackle this problem in this paper we propose a latent class ordered probit model to control for subjectivity when analysing the influence of fuel poverty on self reported health this methodology is applied to a sample of 25 000 individuals in 11 000 households for the 2011 2014 period in spain where 5 1 million people 11 of the population could not afford to heat their homes to an adequate temperature in 2014 the results show that poor housing conditions low income material deprivation and fuel poverty have a negative impact on health we also find that the effect of objective fuel poverty and other poverty related factors on health are stronger when we control for unobserved heterogeneity among individuals since objective measures alone may not fully capture the adverse effect of fuel poverty on health we advocate policy approaches that combine both objective and subjective measures and its application by policymakers

price advertising and the deterioration of product quality arguments in favour of self enforced bans on advertising by professionals often rely on the stylized fact that advertising can communicate information about price but not about quality this being the case it is argued that allowing professionals to advertise runs the risk that firms will compete vigorously over price at the expense of the quality of their product this paper shows that even if price can communicate no information directly about quality it can do so indirectly because price will be a signal of quality because of this allowing advertising is shown to improve consumer welfare

bonding and nonbonding signals of product quality this article examines the essential role of bonding in most signaling models where quality is subject to moral hazard problems an advertising model in which advertising is a durable asset whose value is reduced by cheating illustrates how the bonding capacity of a signal determines its cost characteristics of the market that govern how well a signal is targeted to relevant consumers and how information about cheating is spread are critical to determining bonding capacity and hence to the choice among potential signals this bonding perspective explains the literature s widely divergent predictions about the conditions necessary for quality signals copyright 1990 by the university of chicago

on being honest and behaving honestly abstract this paper deals with markets with asymmetric information where transactions are repeated infinitely it adds to the standard analysis the requirement that the equilibrium be renegotiation proof rp we show that when there are just one buyer and one seller there is no price that supports an rp equilibrium when there are many buyers and sellers the minimum of the price that supports a no cheating rp equilibrium approaches infinity as the probability that an entering firm will find buyers approaches 1 nonetheless the market is saved if the probability that a particular seller is honest is strictly positive the core of honest sellers imposes honest behavior on everybody else

high and declining prices signal product quality high and declining prices signal a high quality product high prices are the efficient means of signaling because the consequent loss of sales volume is most damaging for lower cost lower quality products as time passes and the number of informed consumers increases the signaling distortion lessens resulting in a declining price profile the prediction of high and declining prices is robust across a variety of dynamic models and is consistent with recent empirical findings copyright 1991 by american economic association

measuring fuel poverty in france which households are the most fuel vulnerable fuel poverty is a growing concern in france following the hike in energy prices that started in 2004 the problem of energy affordability for low income households entered the political debate with the grenelle de l environnement in 2007 according to the standard uk definition 10 ratio 3 8 million households were subject to fuel poverty in france in 2006 we question the way fuel poverty is currently measured and compare the impact of alternative measurement approaches on the extent and composition of fuel poverty in france then we identify and characterize vulnerable households that are not ordinarily poor but can be pushed into poverty because of their fuel bills a logit a clog log and a mixed effect logit model are used to analyze which factors influence the probability of vulnerable households to fall into poverty the study indicates that the proportion of fuel poor people and their characteristics differ significantly depending on the fuel poverty measure chosen the econometric results show that the probability of falling into poverty is higher for those who are retired living alone rent their home use an individual boiler for heating cook with butane or propane and have poor roof insulation current french fuel poverty reduction policies appear to be inappropriate given our conclusions

the dissipation of profits by brand name investment and entry when price guarantees quality two previous models of the dissipation of profits generated by the use of quality guaranteeing prices assumed that pro fits were dissipated through investment in brand name capital and ent ry the model of this paper allows both possibilities it is shown th at both types of dissipation will in general occur and that brand n ame investment will dissipate a greater share of profits as the elast icity of consumer response to brand name investment grows larger copyright 1987 by university of chicago press

location costs product quality and implicit franchise contracts abstract in the literature on international trade only little attention has been given to informational asymmetries between firms and consumers with respect to product quality the few economic models that analyze the question of how asymmetric information about product quality might affect trade flows treat product quality as exogeneous in contrast our model takes product quality as an endogeneous variable i e firms can choose the quality they wish to produce in this case location costs can signal product quality under certain conditions and thereby affect international trade flows more specifically intra industry trade in vertically differentiated experience goods can be determined by information asymmetries about product quality

consumer demand for fair trade evidence from a multistore field experiment abstract we provide new evidence on consumer demand for ethical products from experiments conducted in a u s grocery store chain we find that sales of the two most popular coffees rose by almost 10 when they carried a fair trade label as compared to a generic placebo label demand for the higher priced coffee remained steady when its price was raised by 8 but demand for the lower priced coffee was elastic a 9 price increase led to a 30 decline in sales while consumers attach value to ethical sourcing there is significant heterogeneity in willingness to pay for it

measuring energy poverty in greece a comprehensive research in the field of energy poverty is undertaken in this paper in an attempt to highlight the great vulnerability of greek households on energy poverty in the middle of a severe economic crisis till now greek energy policy has been considered insufficient to tackle energy poverty issues as focusing mainly on short term rather than permanent solutions a primary survey has been conducted recording objective data of energy expenses as well as subjective perceptions about housing conditions the findings showed that under the objective expenditure based method 58 of greek households are energy poor among households under the poverty threshold the energy poverty rate exceeds 90 existing and new subjective indicators shed light on other aspects of energy poverty such as the level of thermal comfort at home damp problems detected restriction of other essential needs in order to manage energy payments etc some interesting conclusions are also drawn by exploring the relationship between various indicators it appears that households considered energy poor are not identical when examined by objective and subjective indicators however different indicators complement each other by capturing different aspects of the problem and provide a broader overview of the issue

expert opinion and the demand for experience goods an experimental approach in the retail wine market abstract the effect of expert opinion on demand for experience goods is difficult to quantify as the relationship between purchases and reviews may be driven by product quality further it is unclear whether a review based demand effect is due to providing quality or existence information using a retail field experiment to overcome these obstacles we find a significant positive average consumer response to expert opinion labels for wine demand decreases for low scoring wines and increases for wines scoring average or higher results indicate that expert opinion labels transmit quality information as opposed to solely shelf visibility

a stochastic model for energy poverty analysis abstract so far the lack of a common effective way of measuring energy poverty has been detected as a major weakness in handling the energy poverty problem one of the main causes has been the complexity of modeling the required energy consumption of households as demanded by the official 10 indicator and its replacement in calculations by the actual energy consumption which as is well known underestimates the real needs of households this weakness is addressed in this paper through the development of the stochastic model of energy poverty smep the development of the model includes firstly the modeling of energy consumption at household level and subsequently the transition from household level to country level through stochastic analysis monte carlo simulation through sensitivity analysis the impact of various parameters on energy poverty is quantified for the first time by determining their weighting factors applied to the case of greece it is found that energy poverty reaches 70 4 with income being the decisive factor affecting energy poverty at 63 while other variables htot etc follow at significantly lower percentages the findings can be used in order to assess in advance the effectiveness of energy poverty measures making the model a valuable policy tool

sustainability labels on coffee consumer preferences willingness to pay and visual attention to attributes abstract sustainability labels are important tools that help consumers assess the sustainability aspects of food while past studies have focused on visual attention to nutrition information no study has investigated the visual attention paid by consumers to the sustainability information on food our study contributes to the need to better understand consumers attention to sustainability information when making food choices the objective was to explore the importance that consumers attach to sustainability attributes and investigate how this relates to the visual attention paid to these attributes during the choice decision and to willingness to pay wtp visual attention during the decision making process was measured in terms of fixation time and fixation count which were then analyzed in relation to the stated attribute importance our results suggest that consumer segments with differences in stated attribute importance visually attend differently to these attributes higher valued attributes also exhibited higher visual attention our results suggest that consumers who spend more time attending to and fixate more on sustainability attributes value them more

measuring and monitoring fuel poverty in the uk national and regional perspectives abstract throughout the industrialised world fuel poverty is the most commonly accepted term with which to describe a household s inability to afford basic standards of heat power and light whilst the term gained widespread acceptance with the publication of the uk s fuel poverty strategy in 2001 little is known about the origins of the term itself this paper traces the earliest formulations of the concept focusing particularly on the 10 needs to spend threshold which was adopted in 1991 and remains in place some 20 years later this paper argues that understanding more about the origins of this threshold yields a more critical understanding of why fuel poverty targets in the uk have not been reached and enables a more informed approach to setting realistic targets for the future it also provides an opportunity to explore regional disparities in uk fuel poverty prevalence highlighting the extent to which rigid adherence to a 10 threshold has created an unstable regional mosaic of over estimation and under estimation

from targeting to implementation the role of identification of fuel poor households this paper proposes to evaluate the efficiency of fuel poverty policies by looking at them as a three step process these steps are policy targeting identification of households and implementation of measures each of these steps are costly and can face feasibility problems this is particularly true in the case of fuel poverty policies because of the multidimensional aspect of fuel poverty therefore public policies in that field are necessarily imperfect and this should be taken into account in the analysis of policies this three step framework is applied to the french fuel poverty policy which has been developed in 2010 as its practical modalities of implementation are still under discussion we mainly discuss the choices made in terms of targeting and highlight the role of identification of fuel poor households as a key factor for the success of that policy the general idea behind this discussion is that the efficiency of such policies has to be viewed in a comprehensive way which includes the three policy steps

food labeling and eco friendly consumption experimental evidence from a belgian supermarket using an incentive compatible framed field experiment we investigate whether consumers food consumption is more eco friendly when the information about a product s environmental impact is more easily accessible through an online survey we identify a food label that is perceived to be the most easily accessible for assessing a product s eco friendliness among six alternatives these alternatives vary on multiple dimensions including whether a standardized score of the overall environmental impact is added this new food label is subsequently tested in an experimental food market embedded in a belgian supermarket we find that the presence of the new label that was preselected in the online survey leads to more eco friendly food consumption relative to either the label currently used in the supermarket or the label that contains the raw information of the environmental impact in our experimental food market the use of an easy to interpret but comprehensive environmental information label increases the overall eco friendliness of our subjects food consumption by about 5 3 relative to the default label used in current markets

definitions of fuel poverty implications for policy abstract this paper outlines why the definition of fuel poverty is important in policy formulation and describes how the government s current definitions evolved from the original concept it discusses the determination of income and fuel costs and the possibilities for a relative and common european measure it examines problems inherent in assessing fuel costs as a percentage of income and puts forward the arguments for a budget standard approach the paper illustrates how the size of the problem depends on the definition and chosen threshold and suggests advantages for a rating scale it illustrates how the income composition and thresholds also govern the distribution of the target populations and the relative importance of the main causal factors and examines the consequent policy implications it explores the definition of vulnerable households and the importance of severity and questions whether the uk fuel poverty strategy is targeted at households least able to afford their fuel costs as the name implies or primarily those at risk from excess winter and summer mortality and morbidity finally after examining the role of supplementary indicators it looks at the opportunities for changing the definition and comments on the government review of the definition and targets

reputation and uncertainty toward an explanation of quality problems in competitive ldc markets abstract this paper attempts to explain the puzzle of low and variable product qualities in seemingly competitive ldc markets it shows that the cost of overcoming quality moral hazard through seller reputation rises with the rate of interest the rate of seller turnover the amplitude of idiosyncratic cost fluctuations and the relative scarcity of exogenous entry costs since markets with a multiplicity of small producers are more likely to have these characteristics they are more susceptible to suffering from quality problems the model developed here in particular highlights the role of cost variations in impeding the function of reputation in markets with moral hazard and adverse selection the derived conditions for the persistence of quality problems contribute to the explanation of quality differences between similar markets in developed and less developed countries

a signaling explanation for charity this article examines a novel but plausible motive for charitable giving charitable donations which are observable can signal wealth or income the signaling equilibrium of charitable donations has attractive properties donations increase proportionally with population size governmental funding for public goods affects private charity only through an income effect crowding out need not be complete income redistribution is generically nonneutral increasing the spread between the poorest and richest person in a community tends to increase private donations our theory are based on the assumption that people are willing to make charitable donations even if they will not increase provision of the public good the data on charitable giving support the hypothesis that donors donate at least partly for signaling purposes rather than only to aid the recipient or to obtain satisfactions unrelated to status though charitable organizations usually report donations within categories thus not allowing perfect revelation for analytical tractability we shall consider an equilibrium with perfect revelation and a continuum of types as characterized in george j mailath 1987 and norman j ireland 1994

the decomposition of promotional response an empirical generalization price promotions are used extensively in marketing for one simple reason consumers respond the sales increase for a brand on promotion could be due to consumers accelerating their purchases i e buying earlier than usual and or buying more than usual and or consumers switching their choice from other brands purchase acceleration and brand switching relate to the primary demand and secondary demand effects of a promotion gupta 1988 captures these effects in a single model and decomposes a brand s total price elasticity into these components he reports for the coffee product category that the main impact of a price promotion is on brand choice 84 and that there is a smaller impact on purchase incidence 14 and stockpiling 2 in other words the majority of the effect of a promotion is at the secondary level 84 and there is a relatively small primary demand effect 16 this paper reports the decomposition of total price elasticity for 173 brands across 13 different product categories on average we find that 25 of the elasticity is due to primary demand expansion i e purchase acceleration and 75 to secondary demand effects or brand switching thus while gupta s finding that the majority of promotional response stems from brand switching is supported the average magnitude of the effect appears to be smaller than first thought more important there is ample evidence that promotions have a significant primary demand effect the relative emphasis on purchase acceleration and brand switching varies systematically across categories and the second goal of the paper is to explain this variation as a function of exogeneous covariates in doing this we recognize that promotional response is the consumer s reaction to a price promotion and therefore develop a framework for understanding variability in promotional response that is based on the consumer s perspective of the benefits from a price promotion these benefits are posited to be a function of i category specific factors ii brand specific factors and iii consumer characteristics the framework is formalized as a generalized least squares meta analysis in which the brand s price elasticity is the dependent variable several interesting results emerge from this analysis category specific factors brand specific factors and consumer demographics explain a significant amount of the variance in promotional response for a brand at both the primary and secondary demand levels category specific factors have greater influence on variability in promotional response and its decomposition than do brand specific factors there are several instances where exogenous variables do not affect total elasticities yet significantly affect individual components of total elasticity in fact the lack of a significant relationship between the variables and total elasticity is often due to offsetting effects within two or more of the three behavioral components of elasticity this is particularly true for brand specific factors which typically have no effect on total elasticity yet have important effects on the individual behaviors there is some evidence to suggest that not all promotion related increases in primary demand are due to forward buying in some cases promotions appear to increase consumption we use these results to illustrate how category and brand specific factors work to drive primary and secondary demand elasticities in different directions in short this paper offers an empirical generalization of a key finding on promotional response how elasticities decompose across brand choice purchase incidence and stockpiling and new insights into factors that explain variance in promotional response these findings are likely to be of interest to researchers who are concerned with theory development and the generalizability of marketing phenomena and to managers who plan promotion campaigns