Consumer Welfare Research Articles

Agrarian Platform Capitalism: Digital Rentiership Comes to Farming

AbstractWith the rise of digital technologies, a political‐economic configuration recognised as “platform capitalism” has raised concerns over monopolistic tendencies, lack of accountability, expanded rentiership, workers’ precarity, and more. Existing analyses, however, show a distinctly urban bias—centring on housing, transportation, retail, and gig labour—and have yet to engage with the agrarian dimensions of this phenomenon despite considerable potential impacts on the future of farming. Here we begin the process of theorising agrarian platform capitalism, offering a typology of platforms in the agri‐food sector, and bringing together critiques of platform capitalism with the distinctive features of agrarian political economy. Our analysis identifies four prominent characteristics of agrarian platform capitalism which largely corroborate existing critiques albeit with some distinctive contours. As in other sectors, platforms intensify rentiership regarding both real estate and digital assets. Agricultural platforms also display a familiar tendency to thrive in spaces of regulatory retreat and are in some cases even endorsed by regulatory agencies, highlighting the potential for public–private platformisation. Some agricultural platform companies deploy populist rhetoric beyond established tropes of consumer welfare, latching onto farmers’ deep frustrations with the highly concentrated agribusiness sector. Efforts to reign in agrarian platform power may be further constrained by legitimising discourses of hunger relief and sustainability.

Market transparency and consumer search—Evidence from the German retail gasoline market

AbstractWe estimate a model of incomplete information price competition where consumers endogenously choose whether to use a price search website. We examine how consumer search and prices would change under different transparency regimes. We find that aggregate consumer welfare is maximized when the price search website lists the lowest 20% of prices (i.e., one station in markets with less than five stations, and two stations in markets with more than five stations), with consumer expenditures falling by 1.5% relative to a regime where all are listed.

Cross Ownership Under Strategic Tax Policy

Abstract We provide a new reason for the consumer surplus and welfare raising cross ownership. We show that cross ownership reduces the tax rate, and increases consumer surplus and welfare under Cournot and Bertrand competition when the marginal social cost/benefit of public funds is less than unity. We further show that Cournot competition creates higher consumer surplus and welfare compared to Bertrand competition if the marginal social cost/benefit of public funds is less than unity, thus providing a new reason for the Cournot-Bertrand welfare reversal.

Noncompete Agreements and the Welfare of Consumers

Employee spin-offs harm incumbent firms by increasing competition (benefiting consumers) and preventing firm owners from making beneficial investments in workers who may later spin off (harming consumers). We model noncompete agreements (NCAs) as solutions for the firm and analyze the resulting trade-off for consumers. We show that market structure and the nature of investment play large roles. Counterintuitively, increased investment benefits have the potential to harm consumers such that industries where firms value NCAs the most are those where harm is greater. Finally, we draw two analogies between NCAs and antitrust and show how those areas inform NCA policy. (JEL D42, D43, J41, K21, L26, M13, M53)

New Challenges in Times of Crisis

In the decades since the European Union’s energy policy was established, we have witnessed a process of development which has resulted in the field being regulated by the Treaty in its own legal framework and has continued to evolve to the present day. Governance at the EU level has become more important in the field of energy policy, but the crises have led to an increasing role for Member States. The EU’s single rule aims to ensure a level playing field for market players in the competitive sector, while preventing unfair competitive advantages for companies created by or benefiting from public or state resources. The EU state aid rules have undergone significant changes in the last few years. State subsidies are part of competition policy, which aims to ensure an efficient economy and consumer welfare. Among the market failures in the energy sector, the most significant disadvantage is the presence of externalities and natural monopolies. These need to be addressed through government assistance and its direct and indirect regulatory instruments. Competition law also covers economic services of general interest, which are closely linked to the issue of state subsidies. Member States have discretion to define services of general economic interest, subject only to the limits set by EU law, and to avoid manifest error of assessment. The energy packages include the term “universal service” for electricity, but not for gas, leaving it to the discretion of the Member State to decide on the latter. The crises have brought with them a breakdown of neoliberal ideas and, as a consequence, a strengthening of the tendencies in favour of state regulation. In most Member States, we are witnessing a closure, voices critical of the EU in many respects (e.g. Hungary and Poland in the context of the Art. 7 procedure) and Brexit has had a negative impact on communitarisation policies.

The positive impact of corporate mergers on consumer welfare: from the perspective of corporate R and D investment

Enterprise mergers are essential for the development and growth of enterprises, and they are also an important mechanism for the market economy to improve the overall efficiency of the market through the survival of the fittest. Compared to gradually growing a company through internal accumulation, merging with other companies can achieve various goals such as scale expansion, business expansion, and financial optimization faster in a short period. Although business mergers are spontaneous actions of enterprises, the merger of enterprises, especially large enterprises, affects their performance and consumer welfare. To better study the potential impact of corporate mergers, this article combines traditional and modern merger theories to investigate the positive effects of corporate mergers on product prices, corporate innovation, and overall consumer welfare. The impact channels of Chinese-listed company mergers on their R&D expenses are evaluated empirically. Through empirical and theoretical analysis, this article proves that business mergers can improve efficiency, innovation, and consumer benefits by increasing research and development expenditures.

Effects of importing second-hand clothes on supply chains: insights for Africa’s textiles and apparel industry

ABSTRACT Some African countries import a large number of second-hand clothes. This paper examines how importing second-hand clothes affects Africa’s textile and apparel (TA) supply chain. We find that the availability of second-hand clothes could benefit consumers because it provides a new option to consumers. However, import bans and the importation of second-hand clothes may help or hurt local TA manufacturers and workers’ incomes depending on the cost structures for new and second-hand clothes. Imposing import tariffs restrains the second-hand clothing business, helps local TA manufacturers and improves consumer welfare if the quality of new clothing is competitive. Our findings provide insights into how governments use distribution management to protect local TA manufacturers in Africa. Encouraging agents to sell in the local market is desirable if a government wants to help local manufacturing firms and workers. However, if a government wants to collect more tariffs, not allowing second-hand clothing importers to sell through retailers is wise.

Towards a responsible gaming ecosystem: a call to action

Purpose Drawing from transformative service research (TSR) and service ecosystem perspectives, the author seeks to provide multi-level insights into gaming service systems and call to action how this knowledge can contribute to cultivating socially responsible gaming by addressing the following research questions: What insights from service ecosystem and TSR literature can help optimise value co-creation and cultivate socially responsible practices in digital gaming services? What future research directions could advance the understanding of digital gaming services and their potential to develop a responsible gaming ecosystem that balances social well-being with commercial success? Design/methodology/approach Adopting a conceptual approach of theory synthesis and adaptation, the author discusses four overarching themes alongside key research gaps and directions crucial for understanding the dynamics of gaming ecosystem. Findings The central themes – “Exploring individuals as game service consumers”, “Gaming service exchange dynamics among meso-level stakeholders”, “A macro lens to gaming service ecosystem” and “The complexities of multi-actor dynamics and interdependencies” – shed light on how responsible services can be fostered. Research limitations/implications Given the absence of a well-defined scope for understanding responsible gaming, future research should develop a typology to capture its multifaceted aspects. Expanding beyond micro-level analysis, conducting consultation interviews with industry practitioners and policymakers can contribute insights into promoting responsible gaming services. Social implications The author offers insights for the game players, designers and developers, service providers and policymakers to promote a healthy gaming culture. Originality/value Through this research, the author advances the understanding of gaming as a service by illuminating value co-creation and co-destruction within an interconnected gaming service ecosystem through the lens of TSR. Such understanding empowers businesses to prioritise consumer welfare in their decision-making and practices.

Not all about the money: Service quality information improves consumer decision-making

Information asymmetries are pervasive in many industries and can result in large losses in consumer welfare. Does providing product quality information result in improved consumer decision-making? We study this question in a market where quality is notoriously hard to determine ex ante: the residential energy market. Using a discrete choice experiment (N = 1,002), we document a substantial willingness-to-pay (37–45 % of the median bill) for four service quality attributes (transparency, agency, authenticity, and convenience). In an incentivized search task (N = 432), we show that how quality information is presented matters: consumers who view information in the form of ratings and stamps of approval are (i) 4 % more likely to opt in to the search task, and (ii) 20 % more likely to correctly identify given levels of quality, relative to consumers who are provided with bar graphs, pie charts, and text. Finally, using a decision experiment (N = 510) with real company names familiar to our participants, we find that the provision of quality information increases choices of the best-rated company more than 20-fold, relative to the control scenario where quality information is absent, in which consumers select companies predominantly on price and brand awareness. Our findings are applicable to other markets in which information asymmetries are present, where policymakers should consider interventions that promote transparency and quality information provision.

The Impact of Globalization on World Nations: A Study on Protection, Welfare, and Producer Gain

This paper examines the effects of globalization on nations, focusing on economic, social, and cultural dimensions. It analyzes the roles of protectionism and globalization in shaping consumer welfare and producer earnings through qualitative methods and the Customs Union theory framework. The study discusses the benefits and drawbacks of globalization in the context of World Trade Organization (WTO) regulations. The findings indicate that globalization has intensified financial flows between countries, which can exacerbate economic crises. Countries with abundant human resources can capitalize on the international division of labor to specialize in high-value sectors, while those with limited resources risk falling behind in the digital landscape. This division of labor fosters specialization and improves production efficiency through targeted education. However, multinational corporations often impede cost-effective production in developing nations, underscoring the necessity to restructure research and development to facilitate technology adoption in underdeveloped areas. This restructuring can help close the technological gap and encourage equitable participation in the global economy. Jel code Classification: D6: Welfare economics, Fo1 Global outlook, F40: General F4: Macroeconomics aspects of international trade and finance

The Effects of Market Monopolies on Consumer Welfare and Economic Efficiency

Using both theoretical and empirical analysis, this study offers a thorough examination of how market monopolies affect consumer welfare and economic efficiency. The study sheds light on the ways in which monopolistic enterprises sustain their market dominance by analyzing how monopolies function. These tactics include taking advantage of entry hurdles, exercising control over crucial resources, and implementing strategies such as price discrimination. According to the research, because there is no competition, monopolies not only drive up costs but also limit consumer choice, lower the quality of their products, and stifle innovation. Due to these monopolistic actions, there are inefficiencies in the market, especially when it comes to the distribution of resources, which makes businesses less inventive and productive and ultimately contributes to a general stagnation in the economy. The role of legal frameworks like antitrust laws, which are intended to prevent monopolistic behavior, is also evaluated in this research. It criticizes current laws, pointing out that they frequently fail to keep up with changing market circumstances, especially in sectors like technology and telecommunications. In order to remedy these deficiencies, the paper suggests a number of policy measures, such as stepping up antitrust enforcement, lowering obstacles to new businesses entering the market, and liberalizing the market to create an atmosphere that is more competitive. It also promotes updating regulatory frameworks to deal with digital monopolies and quickly evolving global markets in a way that prioritizes consumer welfare and restores economic efficiency. By taking these steps, the study highlights how crucial it is to reduce monopolistic power in order to foster innovation, long-term economic growth, and consumer safety.

From ban to balance: How agricultural climate policies reshape rural asset allocation?

Environmental regulation on climate risk for promoting sustainable development is an important research topic that requires further attention. In response to the increasing awareness of agricultural climate and environmental protection, the implementation of the straw burning ban policy has been adopted in China. To gain a deeper understanding of the implications and effectiveness of the straw burning ban policy on rural households assets allocation behaviors, and this study utilizes China Family Panel Studies (CFPS) during 2010 to 2018 and employs the Difference-in-Differences (DID) estimation strategy to identify the causal effect. Accordingly, we draw several empirical findings. First, the straw burning ban policy has a significant impact on the assets allocation behaviors of rural households, leading to an increase in both risk and non-risk assets. Specifically, a preference for risky investments strongly exist following the occurrence of the straw burning shock. Second, we reveal significant reductions in the number of farmers and farming production costs, including expenses related to irrigation, seeds, and land usage. Conversely, we observe a significant increase in land renting and farmer machinery leasing activities. These effects are found to change the income patterns and thus affect household assets allocation behaviors. Third, the straw burning ban policy has a significant decline impact on household expenditures, specifically in total and housing expenditures, while welfare expenditure shows a positive increase as the preventive motivation. Finally, rural households affected by straw burning ban policy are significantly induced to increase allocation in short-term saving and non-financing assets, as well as in financing fixed-assets and financial investments.

Level of social security expenditures and economic growth rate based on econometric regression modelling: New evidence from OECD countries

This research article examines the relationship between the level of social welfare expenditure and economic growth rates, based on unbalanced panel data from 38 OECD countries covering the period from 1985 to 2022. Four hypotheses are formulated regarding the impact of social expenditure on economic growth rates. Through multiple iterations of regression model building, employing various combinations of dependent and independent variables, and conducting tests for stationarity and causality, compelling empirical evidence was obtained on the negative influence of social welfare spending on economic growth rates. The study takes into account both government and non-governmental expenditures on social welfare, a novelty in this field. This approach allows for a detailed examination of the effects of different components on economic growth and provides a more comprehensive understanding of the relationships. The findings indicate that countries with high levels of social welfare spending experience a slowdown in economic growth rates. This is associated with increasing demands on social security systems, their growing inclusivity, and the escalating required levels of financing, which are increasingly covered by debt sources. The research highlights the need to strike a balance between social expenditures and economic growth rates and proposes a set of measures to ensure economic growth outpaces the indexing of social expenditures. The abstract underscores the relevance of the study in light of the widespread recognition of the necessity to combat inequality, poverty, and destitution, and calls on OECD countries’ governments to pay increased attention to social policy in order to achieve sustainable and balanced economic growth.

Heterogeneous effects of information and communication technology development on digital financial consumer protection: Evidence from the global sample

ABSTRACT This study primarily examines the influence of Information and Communication Technology (ICT) on Digital Financial Consumer Protection (DFCP), utilizing a dataset spanning 88 countries globally from 2014 to 2018, within the context of consumer welfare under diverse socioeconomic conditions. The research confirms a positive relationship between information and communication technology (ICT) evolution and digital finance consumer protection (DFCP) in OECD countries with inclusive institutions, competitive markets, and solid educational foundations. Conversely, a negative correlation is observed between ICT growth and DFCP in countries with moderate gender inequality. The study further confirms that ICT development positively influences DFCP due to contextual conditions (i.e. cybersecurity index, political stability, higher educational level, and market quality). Policy implications emphasize the need to address information inequality and protect consumer rights in the digital era. Measures to curb market monopolies of major tech companies and combat unauthorized data usage are recommended. Additionally, enhancing digital literacy is crucial for harnessing the benefits of ICT and promoting financial consumer welfare. Establishing a practical code of conduct aligned with market needs is also essential for ensuring consumer protection.

Post-retirement employment behavior and older people’s expenditure: New evidence from urban China

Abstract Using data from the China Health and Retirement Longitudinal Study, this research investigates how post-retirement employment influences older people’s expenditure in urban China. By broadening the understanding of post-retirement employment behaviour from a consumer welfare perspective, this study expands the literature on retirement consumption and provides theoretical explanations, empirical insights and policy recommendations. The findings reveal that post-retirement employment behaviour reduces urban retirees’ household expenditure and has a more significant effect on men than on women, but this effect diminishes as consumption levels rise. Increasing income, promoting social participation and improving subjective health outcomes are all potential channels through which post-retirement employment can affect consumption. Further analysis shows two main reasons why post-retirement employment reduces older people’s expenditure: first, the increase in subjective health levels resulting from post-retirement employment reduces healthcare expenditure; second, post-retirement employment does not promote social participation and self-rated health for all consumption levels and all genders of retirees – it also decreases expenditure. Preliminary evidence suggests that internet use positively moderates the negative impact of post-retirement employment on older people’s expenditure. These findings provide policy implications for retirement policies and the promotion of the silver economy.

Environmental and social welfare effects of aviation liberalization: Evidence from Central Asia and China market

We investigate the effects of international aviation liberalization between China and Central Asia on environment and social welfare. Based on monthly international air traffic data between Central Asia and China, we estimate a random-coefficients discrete choice model and perform a counterfactual analysis to quantify the effects of improved air connectivity, mainly considering that the ratio of direct and connecting aviation services between Central Asia and Beijing is the same as those between Central Asia and Russia, between Central Asia and other former Soviet Union countries and between Central Asia and other Asian countries. The main findings are as follows. First, improving air connectivity intensifies competition in the market, resulting in a decrease in the passenger-weighted average airfares between Central Asia and Beijing by 0.86–5.15 US dollars (USD) in 2012 and an increase in the total number of passengers by 2930–20,790. Second, improving air connectivity increases total carbon emissions (CO2) between Central Asia and Beijing by 0.78–6.11 million kilograms (kg) in 2012 but also drives down per capita CO2 emissions in this market by 0.78–2.38 kg. Third, while increasing total environmental externality costs, improving air connectivity significantly enhances consumer welfare and airline profits, resulting in a net social benefit of 14.02–44.12 million USD between Central Asia and Beijing in 2012. Finally, several policy implications are discussed.

Has competition law enforcement been effective in South Africa?

ABSTRACT The South African Competition Act was crafted on the basis that it could be used to address distortions and inequalities in the market through enforcing competition. A question which has arisen is whether competition enforcement has been effective given that many economic sectors are still largely dominated by monopolies, duopolies or oligopolies. In this study, I assess whether competition enforcement has reduced inequality in South Africa by studying the link between market power and inequality, following a competition intervention in selected product markets. Using the nonlinear autoregressive distributed lag model, I assess whether competition enforcement in the market for bread, maize meal, and sunflower oil, has been effective in increasing consumer welfare, by lowering income inequality through lower prices. The findings of this study suggest that firms in these markets abuse their market power even post-intervention, such that they can raise prices and reduce consumer welfare, increasing inequality indirectly.

How Do Housing Markets Affect Local Consumer Prices?: Evidence from U.S. Cities

AbstractWe examine the link between house and consumer prices in 41 U.S. cities using retail price data for various consumer goods. We find that shifts in house prices precede consumer price changes, with varying impacts depending on location and product categories. The nature of housing market shocks matters too; housing supply shocks move consumer prices temporarily through the cost‐push dynamics, while housing demand shocks have enduring effects via wealth and collateral channels. Our findings imply that housing market fluctuations may have greater impacts on local cost of living and consumer welfare than their representation in the Consumer Price Index.

Unfair competition law in Ghana: unravelling the scope, evolving jurisprudence, challenges and future directions

Abstract Despite its implications for businesses and consumer welfare, unfair competition law has received limited scholarly attention in Ghana. This article fills a significant research gap by examining Ghana’s legal framework for unfair competition, focusing on legislative measures and court decisions in an attempt to facilitate comprehensive academic inquiry into the subject. The article explores how Ghana addresses unfair competition in line with international standards, particularly Article 10bis of the Paris Convention and the Trade-Related Aspects of Intellectual Property Rights Agreement. It assesses how Ghanaian courts have developed unfair competition protection jurisprudence over time with co-existing statutory and common law regimes. Additionally, it highlights the challenges in applying the law and areas for improving it. The study demonstrates how Ghana adopts various approaches to unfair competition, comprising a single source statutory reference point which coexists with the common law tort of passing off. The statutory approach, alone or with the other approaches, meets Ghana’s international obligations. However, there is a need for coherence and effectiveness in the interaction between statutory law and common law principles. Understanding this interaction is essential for ensuring Ghana’s consistent and effective application of unfair competition laws.

EXPRESS: The Impact of Air Pollution on Consumer Spending

Air pollution is a growing concern to economies and societies worldwide. Despite common knowledge that air pollution impairs our emotions and cognition and hence behavioral outcomes, the impact of air pollution on consumer spending remains an open question. Analyzing air quality readings and individual-level credit card transactions in South Korea, this paper shows that consumers spend more money when air quality is poorer. This correlation is more prominent in hedonic categories, such as entertainment or leisure activities, where the nature of consumption is characterized by greater emotional benefits. The authors consider potential explanations, and the leading hypothesis is that consumers treat spending as a mood-regulating resource. The results survive an array of robustness checks and are supported in a controlled experiment, reinforcing a causal inference behind the main findings. The authors provide implications for stakeholders to develop a sustainable marketing program that not only pursues managerial interests but also concerns consumer welfare in the face of environmental change.