Consumer Welfare Research Articles

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.

UNDERSTANDING THE LACK OF TRANSPARENCY IN INSURANCE CONSUMER PROTECTION

This research paper delves into the intricacies surrounding consumer protection in the Indian insurance sector, focusing on the interplay between regulatory frameworks, legal provisions, and industry practices. Through a comprehensive analysis, the paper explores the Consumer Protection Act 2019, the Rights of Consumers under this Act, the Protection of Policyholders' Interest Regulations 2017, the recent judicial verdicts shaping consumer rights, and the overarching Insurance Act 1938. By examining key provisions, regulatory mechanisms, and case law, the paper aims to elucidate the challenges, implications, and potential remedies pertaining to transparency and accountability in insurance consumer protection. Through this exploration, the paper seeks to provide valuable insights for policymakers, regulators, insurers, and consumers alike, contributing to the ongoing discourse on enhancing consumer welfare and market integrity in the Indian insurance landscape. Keywords: Consumer Protection, Insurance Sector, Regulatory Framework, Transparency,

The influence of regulation on preference for utility infrastructure investment to generate income for Australian water corporations

ABSTRACT Effects of price regulation and preference for utility supply infrastructure on Australian urban water utilities and urban water markets are examinated using historical data, models of the future and a case study of Greater Sydney. Australian regulators utilise the building block method based on operating and capital costs, and a Regulatory Asset Base to set nominal revenue requirements and ultimately prices for water utility services. Regulation of water utilities that is dependent on a Regulatory Asset Base drives preference for utility infrastructure and is remote from market mechanisms of consumer demands for water and sewage services. These regulatory processes are not linked to the operation of the urban water market of government owned utility and distributed solutions, and act to crowd out viable complementary solutions including water efficiency, distributed water sources and alternative pricing models. Government regulation, ownership and operation of utilities may produce strong performance from the perspective of urban water corporations but decrease economic efficiency, resilience and social welfare in urban water markets. The role of major water corporations needs to be redefined in a market recognising multiple complementary water sources and services. Regulation of utility services should have regard to the entire market, market demand, environmental health and consumer welfare.

Willingness-to-pay for low-carbon residential heating systems: A discrete choice experiment among Dutch households

Most studies on decarbonizing space and water heating focus on the potential of low-carbon heating technologies from a top-down perspective, while there has been limited research on consumer preferences for low-carbon heat. To address this gap, we conduct a discrete-choice experiment among 1797 individuals in the Netherlands to estimate the willingness-to-pay (WTP) for residential-heating systems. Our results from the latent-class logit (LCL) model indicate that, on average, Dutch households are willing to pay a premium on their current monthly energy bill of 33% for electricity and 29.4% for hydrogen relative to using gas for heat production, 15.3% for reducing the amount of CO2 emissions per kWh of heat with 100 g and 16% for having the option to switch between energy retailers. In contrast, they require a discount of 28.4% for district-heating systems relative to standalone home appliances. Additionally, the class-profiling analysis indicates that individuals with higher education and income levels in the Northern Netherlands have the highest WTP for low-carbon electricity and hydrogen. These findings suggest that policymakers should favor decentralized heating solutions over district-heating systems to facilitate an energy transition in the residential sector. If district-heating systems are implemented, combining them with electricity or hydrogen instead of natural gas is recommended to realize higher consumer welfare.

First-party selling and self-preferencing

In this paper, I analyze the welfare effect of a vertically integrated gatekeeper platform selling its own first-party product, i.e., first-party selling, as well as the platform's incentive to favor the first-party product in the product recommendations it makes, i.e., self-preferencing. I find that, irrespective of self-preferencing, both consumer welfare and platform revenue are higher under first-party selling because first-party selling mitigates double marginalization. Additionally, third-party product prices are lower in expected terms under first-party selling, either because the platform reduces the commission fee (with self-preferencing) or downstream competition is fiercer (without self-preferencing). Finally, I show that both consumers and the platform are better off if the platform commits not to engage in self-preferencing.

PENERAPAN PENDEKATAN RULE OF REASON OLEH KPPU DALAM PENYALAHGUNAAN POSISI DOMINAN

This research aims to analyze the application of the rule of reason approach in the abuse of a dominant position and the authority of the KPPU in applying the rule of reason in the abuse of a dominant position. The method used is normative juridical research. The results of this research show that the KPPU in assessing Article 25 of Law No. 5 of 1999 alternatively uses one of the two per se illegal or rule of reason approaches with the aim of efficiency, innovation and consumer welfare

Testing the algebraic modeling of competitive impacts from wage premium shocks: a case study from a booming airline market

Labor relations issues such as collective bargaining and strike threat power have recently gained increased attention in the Brazilian air transportation market due to a short-term shortage of qualified workforce, leading stronger pilot unions to demand higher wages and better working conditions. Exacerbated by the notable expansion of the Brazilian economy between 2020 and 2023, where air travel demand surged by 60%, this pressure has driven labor costs to grow more rapidly than other cost categories. This paper examines exogenous flight crew cost shocks, treating these as increases in wage premiums resulting from stronger unionization and higher labor market rents. Using a differentiated duopoly model, we analyze the impact of these wage increases on competition between a major network carrier and a small low-fare carrier, introducing the hypothesis of non-exhausted economies of density. Our findings indicate that smaller airlines are more adversely affected by labor cost shocks, though differentiated wage increase schemes can mitigate these impacts, reducing market concentration and preserving consumer welfare. This study contributes to the literature by incorporating wage premium shocks into existing models and suggesting that labor regulations in Brazil should be liberalized to address the rapid growth in air transportation demand and the resultant workforce shortage.