Demand For Consumer Durables Research Articles

Merger Control in Times of Financial Crisis: An Expedient Instrument to Heal the Fledgling Economy or an Object of Abuse?

In times of crisis, there is reduced demand for consumer durables and the manufacturing industry tends to suffer from excess capacity. Due to liquidity problems, the banking sector too suffers critically. Generally, one observes an accelerated merger control activity across all the sectors, but banking and manufacturing, tend to be most active in terms of merger and acquisitions during times of economic and financial crisis. The present article discusses the substantive and procedural issues in merger control and how the competition authorities respond to crisis by showing flexibility in merger control. The present article presents a critical analysis of treatment of efficiencies and the failing firm defence, with examples of case laws from both sides of the Atlantic. The article concludes by contemplating how merger control can be a constructive instrument to drive the economy towards better macroeconomic fundamentals, without itself being a subject of abuse in the hands of opportunistic enterprises.

Intrahousehold Bargaining and the Demand for Consumer Durables in Brazil

In Brazil, wives do most of the household work. About sixty percent of them also work outside the household, working a total of about 10 hours more per week than men. Because of this unequal distribution of household work, husbands and wives might have different priorities regarding the purchase of durable goods. Although both husbands and wives enjoy entertainment durable goods, wives might have a relative preference for household-production durable goods such as washing machines over entertainment durable goods such as televisions. Using a Brazilian household consumption survey, we examine whether decisions about ownership of entertainment and production durable goods are the outcomes of a bargaining process between husbands and wives. We use several variables to measure bargaining power, including the ratio of women to men in a state. The results indicate that decisions about durable goods ownership are the outcomes of bargaining processes between husbands and wives with wives having a relative preference for household-production durable goods over entertainment durable goods compared to their husbands. Bargaining might explain why ownership of household production durable goods is relatively low in Brazil, despite their potential to save women's time.

Disinflation, Real Income Uncertainty and the Demand for Consumer Durables in a Mean–Variance Model of Portfolio Selection

Survey evidence indicates that consumers only expect to be fractionally compensated by the real income reduction of inflation. Incorporating this evidence into a mean–variance model of portfolio selection, this paper shows that demand for durables is a negative function of expected inflation and income uncertainty. Using quarterly data for the USA and annual panel data for the OECD countries, empirical evidence shows that demand for durables is significantly adversely affected by inflation and income uncertainty, and that the recent disinflation has resulted in a significant increase in demand for durables.

The Demand for Consumer Durables in the United Kingdom in the Interwar Period

Distinct diffusion curves are identified by model type and significant differences in regional motor car ownership in the interwar U.K. economy. We assess the viability of applying mass production strategies such as Ford and General Motors pursued in America. Given the demand-side constraints present in the U.K. market, the price reductions made possible by the exploitation of economies of scale were insufficient to create a mass market. Hence, the relatively low levels of ownership achieved can be seen as a rational response to the constraints perceived by firms.

Politics and the economy in Jordan

Introduction Rodney Wilson Resources and Foreign Aid 1. Water Resources and Food Production Hassan A.K. Saleh 2. Foreign Aid and Economic Development Fawzi Khatib The Economy 3. The Role of the Private Sector in Jordan's Economy Zayd Sha'Sha 4. The Demand for Consumer Durables in Jordan Alladin Tileylioglu 5. Jordan's Trade and Balance of Payments Problems Monther Share Institutions 5. Inflation, Financial Intermediation and Economic Growth in Jordan Subrata Ghatak and Fawzi Khatib 7. Islamic Banking in Jordan Rodney Wilson Politics in Jordan 8. Jordan in the 1980's: Entity and Identity Yezid Sayigh 9. Jordan's 1986 Electoral Law Philip J. Robins International Relations 10. The Middle East: An Area of Conflict the Arab-Israeli conflict and the Iran-Iraq War Kamel Abu Jaber 11. Jordan's Foreign Policy Regional and International Implications Saleh A Al-Zu'bi Index

Economic volatility and the demand for consumer durables

(1988). Economic volatility and the demand for consumer durables. Applied Economics: Vol. 20, No. 6, pp. 731-738.

Selectivity correction in discrete-continuous choice analysis: With Empirical Evidence for Vehicle Choice and Use

In modelling the relationship between the household's demand for consumer durables and their utilisation rate one typically observes the latter only for the chosen durable. The absence of data on the level of ‘consumption’ of the non-chosen durables is a potential source of selectivity bias. There exist many procedures for correcting for selectivity so that predictions of use levels of non-chosen durables can be obtained if one wishes to include use as an influence on durable choice, or if one wants to apply the utilisation model to obtain predictions of use of each type of durable within the class. In this paper we identify the main sources of selectivity and introduce correction formulae that are easy to implement and generalise to polychotomous choice. We assess the empirical implications of the alternative formulae in the context of household vehicle choice and level of use. The data are drawn from 1,436 households in the Sydney Metropolitan Area.

Indivisibility, irreversibility, and the demand for consumer durables

A deeper understanding of the volatility of expenditures on consumer durables is sought in the properties of those goods and the transactions by which they are acquired: durability, indivisibility, and irreversibility. When these properties constrain optimization we find: 1) variation in the lengths of endogenously determined replacement cycles rather than stock-level adjustments may account for much of the volatility, 2) the qualitative nature of an individual consumer's response to a shock depends on the age of his existing unit relative to its optimal replacement age when the shock occurs, 3) the aggregate distribution of unit ages relative to their optimal replacement ages conditions the aggregate response to shocks, and 4) shocks actually change that distribution. A simple aggregation methodology is demonstrated which depicts exaggerated aggregate reactions to shocks.

Purchase expectations and the demand for consumer durables

This article reviews the use of buying intentions anil purchase expectations data in consumer surveys and forecasts of the likely level of consumer demand. It notes the decline in their use and the disappointing experience where attempts have been made to use such information in time series forecasts. The stronger cross-sectional predictive performance is discussed and it is argued that this is of relevance to researchers and forecasters. Suggestions are made as to ways in which purchase expectations data might he more effectively collected and used in future.

The Demand for Consumer Durables

ANY ADVOCATE OF MONETARY ACTIVISM has several shoals to navigate. First is the challenge to explain how money works. The numerous channels through which monetary policy actions influence economic activity remain popular topics for research. One such channel is investigated below. Our catalog of the black box's contents has grown and continues to do so. Second, in exploring how money works, we face a possible constraint on the channels from Friedman's permanent income hypothesis (PIH). Since well over half of GNP is consumption expenditures, the PIH's implication that consumption is nearly immune to short-run policy shocks appears to undermine activist arguments. Finally, rational expectations models of the economy that include policy actions as direct determinants of economic behavior imply that activism is futile. These models assume that there is no nonprice credit rationing. Literature on why nonprice rationing may be optimal and evidence that it occurs refutes that assumption. The channel by which monetary activism influences economic activity investigated in this paper is the demand for consumer durables. The separability of durables services from durables purchases implies that the PIH consumption juggemaut can coexist with highly variable consumption expenditures. Consequently, the timing determinants of durables purchases are important as well as the level determinants.

Measurement of Capital Depreciation within the Japanese Fishing Fleet

AN important unresolved question in the analysis of capital investment is whether the deterioration of physical capital occurs at a constant exponential rate. (For detailed discussion see both Jorgenson (1971) and Feldstein and Rothschild (1974).) The empirical evidence on physical capital depreciation patterns is inadequate to refute any proposition about the actual decay of capital inputs. On the one hand, analyses of acquisition prices of new and used automobiles by Wykoff (1970) and by Cagan (1965) and of used farm tractors by Griliches (1960) uniformly concluded that the geometric depreciation function adequately characterizes the true depreciation function. On the other hand, Hall (1971) and Feldstein and Rothschild (1974) found statistical grounds for rejecting the null hypothesis of an exponential depreciation function. The major purpose of this paper is to apply the statistical test procedure on the geometric depreciation function developed by Hall (1971) and Jorgenson (1971) to data on Japanese fishing boats. The published Japanese data on the insured value of fishing boats against total loss are adjusted to reflect the assessed market valuation for insurance purposes. These adjusted values are used as proxies for the acquisition prices of new and used fishing boats. These proxy variables can be justified because it is common practice for the insurance companies to minimize the difference between the insured value of capital items and their market or actual replacement value. This is accomplished by annual adjustments of insured values for physical deterioration and technical obsolescence (Lee, 1973). These data form a unique set for comparison with the acquisition price data on used automobiles frequently employed in previous studies. To date, most attention in the literature on capital depreciation has been paid to consumer durables, particularly to automobiles, with the exception of Griliches (1960). By comparison, fishing boats are capital inputs to fishery production activity. In Cagan's (1965) expression, the demand for capital inputs is less likely to be influenced by ephemeral fads and will reflect greater emphasis on innovations of enduring importance than will the demand for consumer durables. In addition, since the assessed market valuation of new boats for insurance purposes is believed to reflect satisfactorily the actual value of new boats, the data should reveal some information on that portion of the lifetime depreciation of a capital asset that takes place during the first year of its life. By contrast, the data constraints of previous studies allowed capital depreciation analyses only for vehicles that were more than one year old. This was an unfortunate and significant omission.' Though the Hall model (1971) is fundamentally under-identified, as will be discussed in detail later, it is still possible to statistically test several typical assumptions regarding the nature of depreciation and embodied technical change that are commonly seen in economic literature. While the results of the test are specific to the Japanese fishing fleet, interpretation of these results along with the results of previous studies should give some indication whether the typical assumptions are empirically Received for publication September 14, 1975. Revision accepted for publication June 23, 1977. * Research Triangle Institute. An earlier version of this paper was presented at the Third World Congress of the Econometric Society, Toronto, Canada, in August 1975. Grateful appreciation is extended to W. Kenneth Poole, Jerome A. Olson, and Allen K. Miedema at Research Triangle Institute for discussion and comments on earlier drafts and to Joanne Turner Rogoff of Research Triangle Institute for her editorial assistance in the preparation of this article. The author also thanks an unknown editorial referee for invaluable comments and criticisms. I Hall (1971) measured the depreciation of half-ton pickup trucks relative to 1-year-old trucks because the prices of new trucks were not available from his sources. Wykoff's (1970) study of acquisition prices of new and used automobiles reveals a sharp drop between the price of new cars and the price of used cars. Jorgenson (1971) contends that Wykoff's finding is attributable mainly to the inadequacy of the list prices of new equipment to reflect the prices paid at actual transactions.

MONETARY POLICY AND LIQUIDITY: SIMULATION RESULTS

Recent work finds that the balance-sheet position of households plays an important role in the demand for consumer durables, thus leading to new channels of monetary policy effects on aggregate demand. In this paper, these monetary policy transmission channels are explored with dynamic simulation experiments using a previously estimated consumer durables model and a large scale macro-econometric model. The experiments indicate that these channels are indeed critical to the operation of the macroeconomic system and to the potency of monetary policy.

Real versus Nominal Interest Rates and The Demand for Consumer Durables In Canada

Real versus Nominal Interest Rates and The Demand for Consumer Durables In Canada

The Impact of General Credit Restraint on the Supply of Commercial Bank Consumer Installment Credit: Comment

Economists have long debated whether the monetary authorities are able to affect the supply of consumer installment credit signiElcantly with general, as opposed to direct, credit controls. For instance, in [1], as summarized in [6], most economists took the view that direct credit controls were effective but general credit restraint had little effect on the installment credit markets. In contrast, it was found in [5] that individual banks experiencing slow growth in deposits often cut back disproportionately on the rate of expansion of their consumer loan holdings-with the speed and degree of cutback depending on the importance of consumer lending to the bank. In another study [2] it was found that, as a group, large urban banks disproportionately restricted the availability of funds to the consumer credit market during the tight money phase of the 1965-67 period. Finally, it was suggested in [3] that credit supply effects existed, as one year subsequent to altered rates of growth in money M1, observed changes in ratios of consumer credit outstanding to income were greater than would be implied solely by short-run changes in the income-related demand for consumer durables. In [4] a lagged effect of changes in money M2 on consumer credit growth was also observed, but was viewed as reflecting portfolio balance influences on consumer durables demand. The evidence presented in this paper suggests that during the decade 1965-74 the supply of nonrevolving commercial bank consumer credit was significantly reduced during periods when the monetary authorities appeared to be unwilling to accommodate commercial bank demands for reserve balances fully. Additional findings are that consumer use of bank revolving credit has tended to accelerate during periods of restraint, and that changes in monetary policy seem to impact quickly on bank consumer installment credit extensions.

Demand for Consumer Durables: Stock Adjustment Models and Alternative Specifications of Stock Depletion

Demand for Consumer Durables: Stock Adjustment Models and Alternative Specifications of Stock Depletion

Improving Sales Forecasts for Appliances

Several studies have examined various aspects of the demand for consumer durables. These have studied prediction of initial purchases [2], replacement demand [16], quality changes over time [4], the relationship of changes in income to changes in demand [13], and penetration patterns by market segments [3]. Most of these analyses of demand for household durables have utilized aggregated national data. With the exception of refrigerators and washing machines, there is little published information on characteristics of demand for individual appliances. This study's data were for a limited, comparatively homogeneous market area, permitting detailed analysis. Data on number of appliances sold at retail, estimated average retail prices,' and dwelling units (single and multifamily) connected to utility lines were collected by Pacific Gas and Electric Company for 48 counties comprising most of central and northern California. This area is approximately 94,000 square miles; its 1969 population was 9,171,600 [15]. Data on per capita disposable income were from U.S. Department of Commerce reports.

The Demand for Consumer Durables and Food in Australia: An Application of the Stone‐Rowe Model of Demand*

The Demand for Consumer Durables and Food in Australia: An Application of the Stone‐Rowe Model of Demand*

Secular and Cyclical Changes in the Demand for Components of a Product Cluster

T HE DEMAND for consumer durables has been of particular interest to economists because of cyclical and irregular variations in purchases. Sales cycles of considerable amplitude are associated, in part, with the accelerator effect of an annual consumer purchase-stock I ratio of less than 1.00, in combination with the consumer's ability to exercise considerable discretion in choosing the time for making replacement purchases. One cluster of consumer durables household laundry appliances has not been subjected to extensive study, yet seemed to offer promising possibilities for analysis.2 Viewed technically, four products comprise the cluster: the wringer washer, the automatic washer, the combination washer-dryer, and the dryer. The principal item in this group is the washer and, since 1952, the automatic washer. From an economic viewpoint, the components of this cluster can be classified according to their market maturity and according to their complementary or competing relationship to one another in purchase and in use. We shall define a product as one for which there has not previously been a close substitute. The washing machine of the 1920's was new in its use of nonhuman sources of energy electricity or gas. We do not include in any portion of our analysis laundry equipment which was totally dependent upon manual operation even though its use may have continued after introduction of the electric and gas machines. A product can be said to have reached market maturity when the rate of increase in its use by consumers has begun to decline. With a durable good, this occurs when the rate of increase in ownership begins to decline.3 We shall define an innovation as a major change in the attributes of a product. The automatic washer and combination washerdryer can be classified as innovations, representing major changes in the electric washer, in contrast to relatively minor improvements in the wringer-such as drains, timers, electric wringers -and later in the automaticsuch as programmed temperature, speed, and dispenser controls. To the consumer, the marginal utility of an innovation is far greater than that of an improvement. The demarcation between the two can be established best in terms of consumers' market behavior toward the product or their use of it. A successful innovation in durable goods is one which causes the ownership (and use) rate to rise to a level equal to or greater than that of its predecessor, and this usually occurs at the expense of the predecessor product. An abortive innovation is evident when product ownership rises but then declines before reaching the level achieved by the predecessor product. A declining product is identified by an absolute decrease in rate of ownership. The meaning of competing and complementary products in this study is consistent with that in general use in demand analysis. * Scientific Paper No. 2539 (Washington Agricultural Experiment Stations, Pullman), Project 1496. The author is indebted to Shaikh M. Ghazanfar, who assisted in all phases of the statistical analysis and was responsible for many of the calculations and for all of the graphs; to Rosemary Baker, who was responsible for assembling many of the original data; and to Jagjit Dhesi, who assisted in the calculations. Henry J. Carey and the late Marguerite Cook of the Market Research Department of Merchandising Week, were kind in providing considerable statistical data from their files, and Guenther Baumgart, President of the American Home Laundry Manufacturers' Association, generously made available the association's annual reports of distributors' sales of laundry appliances by states. The author is especially grateful to her colleagues, William Iulo and Harry McAllister, who, through a number of constructive criticisms, helped to correct and refine the analysis and increase the clarity of presentation. 'Throughout this paper, stock and inventory refer to consumer stocks (or inventories) rather than business stocks (or inventories) unless otherwise indicated. 'The most extensive study which has been published is by Spencer and Mattheiss [22]. More limited attention has been given to washing machines in [2] and [7]. Historical reviews can be found in [20] and [21]. 'Since in this paper both ownership and purchases are specified as a proportion of number of households or of population, the relevant rate of change is rate of change in ownership ratio. Members of the appliance industry commonly refer to this ownership ratio as saturation level.

DURABILITY OF CONSUMER GOODS AND BUSINESS INSTABILITY*

s of Doctoral Dissertations 485 study finds that its weakening is transmitted through inventory investment or disinvestment and results in the cyclical change in employment of production workers at the manufacturing level. Thus, as cycles moved away from consumer-durables-stock-exhausting periods, the inventory disinvestment in consumer durable-indivisible goods industries during downturns had a tendency to increase relative to the inventory disinvestment in other industries; and the greater the inventory disinvestment, the greater the contraction of employment in that industry. 3. Though, as the cycles moved away from the consumer-durables-stock-exhausting periods, the consumer durable-indivisible goods sector tended to weaken (a condition of saturation), the nondurable-divisible consumer goods sector tended to strengthen and the producer goods sector tended to show unusual confidence and vigor. In an economy where resource-allocation is specialized and immobile, the weakened consumer durables sector tends to render the economy vulnerable for a downturn despite the steady growth in the other sectors. Thus, the farther the cycle is away from wars or severe depressions, the greater the contribution by the consumer durables sector to initiate a cyclical downturn. 4. The portion of consumer durables expenditures financed by instalment credit is greater during the post-World War II period than during the post-World War I period. The study observes that the relatively greater portion of instalment credit in consumer durables expenditures means: (1) greater ease for consumers to allocate income for purchasing durables, and (2) greater forced saving through instalment debt repayment during recessions at the expense of consumer non-durables expenditures. Consequently, (1) the postWorld War II mild recessions showed less strength and growth in consumer non-durables expenditures than in the interwar mild recessions, and (2) the portion of durables expenditures in total consumer outlay exhibits a trend of growth at the expense of that of the nondurables expenditures. The study suggests that the element of instability in the consumers' sector seems to lie in the bunching of demand for durables by the mass, not by the over-saving of the rich. Thus, any countercyclical policy in so far as the consumers' sector is concerned should differentiate the temporal position of the cycle in question. It behooves the policy-makers to impose more stringent controls over the demand for consumer durables in the cycles immediately following the consumer-durables-stock-exhausting periods than in cycles farThis content downloaded from 157.55.39.213 on Sat, 02 Jul 2016 05:55:32 UTC All use subject to http://about.jstor.org/terms 486 The Journal of Finance ther away from such periods. This will break the bunching in the early cycles and postpone the date of saturation of consumer durables stock. As a result, the long-run expansion phase of the economy will be elongated. Furthermore, a successful breaking-up of the bunching will provide a cushion against severe contraction through a greater growth of the consumer non-durables sector, since the latter exhibited a great degree of stability over the cycles. Thus, any policy that can encourage the relative growth of the consumer non-durables sector can reduce the amplitude of business instability as a whole. This content downloaded from 157.55.39.213 on Sat, 02 Jul 2016 05:55:32 UTC All use subject to http://about.jstor.org/terms