Nondurable Goods Research Articles

Challenges in Health Research Funding: an opinion.

Challenges in Health Research Funding: an opinion.

Dynamic Pricing and Price Commitment in Experience Good Markets

This article develops a dynamic model to examine how a firm selling non-durable experience goods can signal its high quality with dynamic spot-pricing or price commitment. Since consumers who buy and use the product will learn the quality of the product, the firm’s early-period price will endogenously determine the fraction of informed consumers in the later period. Without credible price commitment, the high-quality firm will prefer the pooling outcome in the first period, and in the second period, both types of firms will separate and target only the first-period buyers. By contrast, with credible price commitment, the high-quality firm will be able to profitably signal its quality by lowering its first-period price or increasing its second-period price from its first-best price. Credible price commitment will benefit the high-quality firm by lowering its signaling cost, but can either increase or decrease consumer surplus and social welfare. Furthermore, we show that a longer time horizon can allow the high-quality firm to signal its quality costlessly, by maintaining its high first-best price for all periods.

Do producers respond to every input price change? A note on nonlinearities in factor demand systems

Factor demand relationships, as they are represented by parameters of the cost function, are generally assumed to be linear (in the parameters) in the existing empirical literature. In this note, we argue that this might not always be true, because firms may incur adjustment costs that are inherent in the act of adjusting the mix of inputs applied in the underlying production technologies. We estimate a two-regime threshold system of factor demand equations for several manufacturing industries in the United States. Our results suggest significant nonlinear effects in the factor demand relationships in most nondurable goods sectors. Failure to account for this threshold sensitivity to input price change may cause the estimates of price elasticities to be biased.

On the Welfare Cost of Consumption Fluctuations in the Presence of Memorable Goods, Second Version

We propose a new category of consumption goods, memorable goods, that generate a flow of utility after consumption. We analyze an otherwise standard consumption model that distinguishes memorable goods from other nondurable goods. Consumers optimally choose lumpy consumption of memorable goods. We then empirically document significant differences between levels and volatilities of memorable and other nondurable good expenditures. In two applications we find that the welfare cost of consumption fluctuations driven by income shocks are significantly overstated if memorable goods are not accounted for and that estimates of excess sensitivity of consumption might be entirely due to memorable goods.

Dynamic Model of Markets of Homogenous Non-durables

A new microeconomic model is presented that aims at a description of the long-term unit sales and price evolution of homogeneous non-durable goods in polypoly markets. It merges the product lifecycle approach with the price dispersion dynamics of homogeneous goods. The model predicts a minimum critical lifetime of non-durables in order to survive. Under the condition that the supply side of the market evolves much faster than the demand side the theory suggests that unsatisfied demands are present in the first stages of the lifecycle. With the growth of production capacities these demands disappear accompanied with a logistic decrease of the mean price of the good. The model is applied to electricity as a non-durable satisfying the model condition. The presented theory allows a deeper understanding of the sales and price dynamics of non-durables.

Carry Trade e Risco Cambial: um Conto de Dois Fatores

Retornos da estrategia de carry trade tem sido explicados usando-se funcoes de utilidade inseparaveis no tempo que permitem premios de risco volateis. Tipicamente tais funcoes mimetizam as preferencias de economia fechada que dependem de bens duraveis e nao duraveis. Este trabalho retorna a uma classificacao mais tradicional, em macroeconomia internacional, de consumo entre bens domesticos e importados. O modelo e aplicado para paises que representam 98,2% do volume mundial do comercio bilateral de câmbio. Reporta-se uma melhora acentuada na significância dos betas de consumo.

Durable Goods, Inflation Risk and the Equilibrium Term Structure

High expected inflation is known to have a negative impact on future real growth. We show that this effect is significantly more pronounced in durable relative to non-durable goods sectors of the economy. Consistent with this macroeconomic evidence, the equity returns of durable-goods-producing firms have a larger negative exposure to expected inflation risks. We estimate a recursive utility model which features persistent growth fluctuations and inflation non-neutrality for durable and non-durable consumption. Our model can quantitatively account for the key moments of nominal bond prices and the levels, volatilities, and exposures of equity returns to expected inflation and bond returns.

Rational and Emotional Communication in Advertising in Women's Magazines in Brazil

This article investigated the incidence of rational and emotional arguments in messages from 5.536 advertisements of six women's magazines in Brazil (Claudia, Nova, Estilo, Marie Claire, Elle and Gloss), published between May / 2008 and August / 2009. The methodology was based on an exploratory study, supported on a scale of 14 items, by Resnik and Stern (1977), which recommend matching appeals to attitude toward the product, that is, use informative advertising, based on rational appeals for products in which the consumer attitude is predominantly cognitive. To assess the emotional content, we used the scale of eight items of Plutchik (1980), represented by the primary emotions - Anger, Fear, Sadness, Disgust, Surprise, Curiosity, Acceptance and Joy. Data analysis included the frequency of the two appeals in the general category (durables, non-durables and services), product, and correspondence analyzes were used to identify the prevalence of two types of arguments in selected magazines. The results show the concentration of ads on non-durable goods, followed by the category of services, that overcomes the advertisings on durables. The study also analyzes the incidence of emotional and rational arguments by product category and by magazine.

PRICE SENSITIVITY VERSUS PERCEIVED QUALITY: MODERATING EFFECTS OF RETAILER POSITIONING ON PRIVATE LABEL CONSUMPTION

Private labels are growing fast in Europe and USA, especially in the context of nondurable consumer goods. Moreover, the traditional association of private labels solely with a price focus, to the detriment of quality, appears to be diminishing. This research aims to clarify the effect of price sensitivity toward and quality perceptions of private labels on private label consumption. It analyzes the role of a retailer's price positioning as a moderator of the importance of these effects as determinants of private label purchases. With household panel data and survey information, this study investigates private labels’ share of wallet as the dependent variable; thus the logit-type model is adapted to a resource allocation context. Five sequential models specify and test the four hypotheses. In support of the hypotheses, price sensitivity and quality perceptions relate positively to private label consumption. For the moderating effect of retailer's price positioning, a negative moderating effect arises for price sensitivity, whereas a positive moderating effect appears for quality perceptions of private labels. The findings indicate that retailers’ efforts to convert private labels into tools to support positioning strategies are effective.

Capital-Specific Technological Change and Human Capital Accumulation in a Model of Export-Led Growth

This paper contributes to the literature on economic growth by seeking to join several lines of research on structural factors in a more fully specified framework, on the one hand, and by making this more inclusive supply side to interact with demand factors in a model of export-led growth, on the other hand. Balance-of-payments constraints influence the adoption of investment-specific technological change which requires the import of capital goods, while the sectoral allocation of physical and human capital is likewise revealed to be crucial for growth, both results having important policy implications. Among the latter, the fact that the growth path of the traditional sectors is positively related to the growth rate of exports. The higher the fraction of the production of non-durable consumption goods that is exported, the stronger the impact of a change in the growth rate of exports on the growth rates of the production of non-durable consumption and capital goods. JEL Codes: O11, O33, O41

Adaptation patterns and consumer behavior as a dependency on terror

Terror may have dire implications for the public’s behavior. According to Kirschenbaum (J Homel Secur Emerg Manag 3(1/3):1–33, 2006), in order to minimize the expected impact of a terror incident the public has to adopt a “survival strategy”. According to the underlying research hypothesis of the study, the longer the terror incidents continue, the more the public accepts the possibility that it will be in this situation for the long term; therefore, the extent of its deviation from its ordinary consumer behavior steadily declines after each terror incident. By using daily trade data and an Event Studies econometric methodology, we found the existence of an adaptation trend among the consumer public. Thus, over time, the Israeli public internalized the realization that if it wishes to sustain a reasonable standard of living, it must minimize the disparity between its consumer economic behavior before a terror event and its behavior afterwards. Announcing more assassinations of terrorists was found to calm the public’s fears, when fears are judged by a return to more normal consumption patterns. Another finding is the existence of variance in the pace of this adaptation as a dependency of the type of good consumed: consistently, the adaptation is faster in regard to non-durable goods than to durable goods. This outcome is subject to interpretation, since durable goods may be viewed as “half-consumption goods, half-capital goods,” it stands to reason that capital goods would be more strongly affected than consumption goods.

IMPACT OF CELEBRITY ENDORSEMENT ON BRAND EQUITY

This research intends to explore the empirical relationship between endorsers credibility and consumer based brand equity in the presence of mediating role of brand credibility and moderating role of type of celebrities i.e. National or International was also examined. This paper uses two theories to explain the relationship; associative learning was used to explain the relationship between endorser and brand equity, and brand signaling to explain the relationship about the mediating role of brand credibility. The data was collected from Islamabad, the Federal capital of Pakistan and analyzed using SPSS. Results suggest that endorsers credibility has positive impact on brand equity and brand credibility mediates this relationship. The moderating role of type of celebrity was also discussed in this paper. The past literature suggests that celebrity endorser is one who is perceived as attractive, expert and trustworthiness. This research study examined the relationship of construct in the context of non-durable goods and measured the effectiveness of celebrity i.e. National or International proved to build brand equity.

On mergers, monetary policy and output durability

This article examines the causal relation between monetary policy decisions and the variation in the US mergers and acquisitions (M&A) activity in the durable and nondurable goods sectors between 1990 and 2013. The deviation of the monetary policy-set federal funds rate from the natural interest rate estimated by Laubach and Williams (2003) is shown to have significant causal effects on the M&A activity. In the nondurable goods sector, the funds rate’s deviation from the natural rate, rather than the funds rate itself, is the main macroeconomic factor influencing the M&A activity. In the durable goods sector, the variation in the funds rate, only when this rate is significantly below the natural one, is the main macroeconomic factor influencing the M&A activity. Setting the funds rate below the natural rate reflecting long-term fundamentals (a) leads to relatively lower financing costs which, in turn, lead companies to favour M&A relative to internal growth and (b) makes the M&A activity in the durable goods sector, which is sensitive to the variation in the cost of capital, highly dependent on the monetary policy-set rate.

Mind the “academician-practitioner” gap: an experience-based model in the food and beverage sector

Purpose– This purpose of this paper is to introduce a research model inspired by the basic principles of experiential research and apply it to the food and beverage industry. Thinkers and doers often do not speak the same language: many scholars have pursued the goal of reducing the gap between academicians and practitioners by introducing new research models or adapting existing ones. Two case studies with wine and olive oil producers illustrate how the model works and highlight its applicability. Background literature is provided to support the model.Design/methodology/approach– In defining the model, we have followed several steps. First, we searched the literature to identify research needs and insights that might be useful in formulating the model. Second, we constructed a model following some procedural steps suggested in the literature. Third, we tested a model to verify its applicability and functionality. The paper is structured as follows: the first section explores the issue of academic–practitioner collaboration to identify the obstacles to effective collaboration and to define possible benefits from reducing the gap. The second section presents background literature on methodologies for enhancing cross-profession collaboration. Finally, the model is described and two case studies are described to flesh out how the model works.Findings– According to our experience and research results, this model is, paraphrasing Phillips (1987), “warrantable” because it proposes continuous reflection to improve the alignment between thinkers and doers: this method of conducting research is objective and bridges the gap between researchers and practitioners. Because this model centres on experience, participant behaviours and beliefs can be elicited about a host of nondurable goods. Having entrepreneurs put themselves in the consumers’ position, and providing them the results of their experiment can be considered the real value added of this approach. The model proposed in this paper opens a wider perspective in qualitative research, and the two case studies demonstrate that it is particularly flexible for adaptation to various businesses.Research limitations/implications– More case studies could be useful to demonstrate the validity of this model. Particularly, a longitudinal case study aiming at collecting data about the participants’ feedback in the long run could help in understanding the deep value of the proposed model.Practical implications– While this paper illustrates two applications of the model with entrepreneurs and managers of the wine and olive oil industry, this model offers potential for analysis not only in the food and beverage sector but all fast-moving consumer goods sectors, as it can be adapted to techniques other than sensory analysis once researchers have confirmed that they fit with the aim of the research and the peculiarities of the problem observed.Social implications– Tools and methodologies must be chosen according to the type of business the problem refers to, and, while this presents a considerable challenge in organizingad hocresearch teams, it also offers an opportunity for an interdisciplinary approach and an exchange of knowledge and skills from different research fields. In this case, the choice of research methodology is much more driven by the real needs that emerge from the phenomenon observed, rather than by the researchers’ specific skills.Originality/value– This paper has helped us broaden our perspective on research and has encouraged us to reflect on critical issues such as validity of a research process and usefulness of research. Some questions about the role of research in relation to practitioners are still open, but we think that this work has the merit of further highlighting the importance of bridging the gap between researchers and practitioners during research, and the usefulness being flexible and open-minded when carrying out an investigation.

Hockey Stick Phenomenon: Supply Chain Management Challenge in Brazil

The objective of this study is to investigate a phenomenon that occurs in Brazil, specifically the spike in demand at the end of the sales period, known as the hockey stick phenomenon. This analysis will encompass the causes as well as the impacts of this phenomenon, in a way that allows alternative policies to be evaluated. Data was collected from a Brazilian branch of a large multinational in the non-durable consumer goods industry and in semi-structured interviews conducted face-to-face with executives of 26 clients. The data was used to generate a continuous simulation model based on the methods of systems dynamics. The findings showed that the phenomenon negatively impacted the manufacturer’s financial performance in the long term and indicated required changes necessary to remediate the phenomenon. This is an empirical study on the hockey stick phenomenon, a problem that affects diverse companies in Brazil. The study showed that companies should not assume the hockey stick phenomenon to be an exogenous problem; it showed that there are policies able to improve financial performance; and it provided ideas regarding ways to carry out the change process.

WHAT DO WORKING CAPITAL AND HABIT TELL US ABOUT THE CO-MOVEMENT PROBLEM?

Empirical studies find that expenditures on both durable and nondurable goods fall following a contractionary monetary policy shock. However, in standard two-sector models with staggered nondurable goods prices and flexible durable goods prices, consumption of durables rises whereas that of nondurables falls in response to a contractionary policy shock. To resolve this co-movement problem, I extend the model to include a realistic financial friction that firms must pay for their productive inputs prior to production, i.e., working capital, along with habit formation in nondurable goods consumption. Following a positive interest rate shock, the working capital channel raises production costs, thereby discouraging production of both durable and nondurable goods. Furthermore, habit formation induces households to smooth the growth rate of nondurable goods consumption, and hence mitigates the fall in the nondurable goods sector. The model solves the co-movement problem and successfully generates a more sensitive response in the durable goods sector, as observed in the data.

A Semantic Web framework to enable sustainable lodging best management practices in the USA

Due to the negative environmental impact, corporate social responsibility is an important concept in today’s competitive lodging industry. Hotels attribute 75 % of the overall lodging industries consumption of energy, water and non-durable goods. To remain competitive, organizations implement green lodging programs to demonstrate social responsibility. However, the understanding and implementation of best practices in sustainable tourism in the United States (US) is hampered because the standards that mandate the criteria are disparate. This paper describes a framework to aggregate the variety of best management practice standards so lodging properties and patrons can more easily identify gaps in compliance to the sustainable tourism standard’s criteria. The proposed framework uses standards compliance information found on property sites to infer a ranking in green tourism across twelve third party US standards bodies. Herein, a hierarchy of pre-existing and newly developed domain-specific ontologies has been combined in a semantic knowledge base to describe the relationship between best management practices and accreditation criteria from each of the sustainable tourism standards bodies. Then, inference is used to automatically evaluate a properties conformance to all other green lodging programs based on an evaluation from one. This theoretical framework could better inform hotels and tourism operators on their best management practices and consumers when choosing between green lodging properties.

Global Consumer Culture Positioning: The Use of Global Consumer Culture Positioning Appeals Across Four European Countries

This study proposes a framework of advertising appeals which could be used to express global consumer culture positioning (GCCP) strategy in advertising. The paper examines the use of such appeals in print advertising from four European countries comparing 847 advertisements for durable and non-durable goods from Poland, Hungary, Ireland and the UK. Contrary to expectations, GCCP appeals were more often used in advertisements for non-durable goods than durable goods. The study confirmed the expectation that GCCP appeals would be more frequently used in advertising in less developed markets than in more developed markets. The proposed framework of GCCP appeals may be useful to practitioners wishing to use this positioning strategy. This is an Accepted Manuscript of an article published by Taylor & Francis in Journal of Euromarketing on July 2014, available online: http://www.tandfonline.com/10.9768/0023.03.059

Frequency bias in consumers׳ perceptions of inflation: An experimental study

We investigate whether the perception of economy-wide inflation is affected by the frequency with which various goods׳ prices are observed. We provide novel experimental evidence that consumers׳ perceptions of aggregate inflation are systematically biased toward the perceived inflation rates of the frequently purchased items. This ‘frequency bias’ may affect consumers’ consumption and investment decisions, and thus have important macroeconomic consequences. It may also explain why consumers typically over-estimate inflation in surveys during periods where frequently purchased non-durable goods are inflating faster than durables.

Exchange rate volatility and Spanish-American commodity trade flows

A number of recent studies have tested the impact of exchange rate volatility on trade flows, particularly for individual commodities, for various country pairs. These have found that risk can increase as well as decrease trade, but that oftentimes industries are not affected. This study examines trade between the United States and Spain over the period from 1962 to 2009, for 131 U.S. export industries and 88 import industries. We find that exchange rate volatility has short-run and long-run effects in only a fraction of the cases, but that exports respond more to increased uncertainty than imports do. In all, only 35 of the 74 U.S. export industries are affected (11 positive, 24 negative), whilst only three out of 37 import industries have positive coefficients and 11 have negative ones. We find no evidence that durable or nondurable goods are more likely to respond to volatility, whilst small industries or specialized goods might show more of a positive response.