nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2011‒06‒18
eleven papers chosen by
Frederic S. Lee
University of Missouri-Kansas City

  1. The coming out of the "new consumer" By Wided Batat
  2. A Reassesment of Flexible Price Evidence Using Scanner Data: Evidence from an Emerging Economy By Gastón Chaumont; Miguel Fuentes; Felipe Labbé; Alberto Naudón
  3. Does Family Planning Help The Employment of Women? The Case of India By Francesca Francavilla,; Gianna Claudia Giannelli
  5. Explicit Evidence on an Implicit Contract By Andrew T. Young; Daniel Levy
  7. Wage Inequality, Minimum Wage Effects and Spillovers By Stewart, Mark B.
  8. The European Commission‘s Light Bulb Decree: Another Costly Regulation? By Manuel Frondel; Steffen Lohmann
  9. Thrifty Wives and Lavish Husbands? – Bargaining Power and Financial Dicisions in Germany By Matthias Keese
  10. La déformation des comportements médicaux en faveur d’une logique de marchandisation By Jeanne Lievaut
  11. A Rights Revolution in Europe? Regulatory and judicial approaches to nondiscrimination in insurance By Deborah Mabbett

  1. By: Wided Batat (COACTIS - Université Lumière - Lyon II : EA4161 - Université Jean Monnet - Saint-Etienne)
    Abstract: The postmodern paradigm based on a cultural and a symbolic perspective in marketing and consumer behaviour research emerges from the criticism of the utilitarian logic that has prevailed in the research community in marketing and led researchers to view the consumer as an individual essentially rational; an idea that fits with the "homo economicus" philosophy. As shown by Bergadaà (2006), researchers engaged in this path consider that the role of marketing in the contemporary society has an ultimate aim to establish social bonds, which requires the mobilization of a cultural base and a specific set of values. In order to go beyond the dominant utilitarian logic so far utilized in consumer behaviour research, the Consumer Culture Theory CCT established by Arnould and Thompson since 2005 in the leading International Journal JCR (Journal of Consumer Research), is presented as a new revolution in the studies focusing on the consumer behaviour and the consumption field. The CCT states that the individual behaves and consumes in an autotelic and a symbolic way (Csikszentmihalyi, 2005) within a temporal frame, living his action as a personal experience or as a shared game (Holt, 1995). Consequently, the consumer behaviour can't be understood without taking into account all the dimensions of his consumption such as: ideological, social, cultural, symbolic and experiential consumption in its context (Arnould and Thompson, 2005). From a theoretical perspective, new marketing concepts have emerged with the changing of the consumer status in the postmodern context that highlights the shift of power from sellers to buyers and the coming out of the "new consumer". The objective of this paper is to provide an overview of the research based on the Consumer Culture Theory that will help us to understand the new forms of the consumption experiences. This will provide us with a conceptual framework to define the new status of the consumer in the marketing literature and therefore understand the paradigm of the "new consumer". Indeed, we can notice in the recent research in the consumption field the evolution of the consumer representations in the consumer behaviour literature since the consolidation of the multidisciplinary approach based on CCT. This article reviews the extensive, multidisciplinary body of literature relating to consumer behaviour studies. It draws upon this diversity of research to show the scope of this fascinating area and to identify areas of commonality within and between different research studies. The key outputs of this paper showed that the main behaviours of the "new consumer" might be defined according to eight categories: (1) experiential and hedonic behaviour (Holbrook and Hirschman, 1982; Hetzel, 2002; Cova and Cova, 2004), (2) digital and competent behaviour (Batat, 2008), (3) paradoxical behaviour (Decrop, 2008), (4) responsible, and ethic behaviour (Özçaglar-Toulouse, 2005; 2009), (5) co-production and participative behaviour (Vargo and Lusch, 2008; Bonnemaizon and Batat, 2010), (6) resistant behaviour (Batat, 2009; Roux, 2004), (7) consumer empowerment (Denegri-Knott et al., 2006), which is a direct consequence of the use of Internet and Web 2.0 to search information, and the last characteristic of the new consumer behaviour is (8) do-it-yourself behaviour (Hetzel, 1996; Marion, 2003). These concepts mainly derived from the CCT philosophy highlight the transformation of the consumer status: from a passive role to an increasingly active role within his consumption experiences. The coming out of the new consumer who is viewed as co-creator of value has opened up discussion and stimulated new ways of thinking around a number of theoretical aspects and related managerial implications. Therefore, the idea of putting the new consumer to work is at the heart of the company's policy and strategy.
    Keywords: Postmodernism, new consumer, Marketing, Consumer behaviour
    Date: 2011–05–05
  2. By: Gastón Chaumont; Miguel Fuentes; Felipe Labbé; Alberto Naudón
    Abstract: In this paper we use a new database of scanner-level prices for the Chilean economy to characterize the microeconomic behavior of prices during a period of high inflation. We are able to characterize the price-setting behavior by supermarket chain. The evidence indicates that there is significant heterogeneity in the pricing behavior of individual retailers. Analyzing the source of shocks, results show that even though chain-specific shocks account for a sizable fraction of the observed variation, common (i.e. countrywide) shocks to individual goods and product categories are the most important factors to explain the behavior of prices. In other words, the pricing strategy of retailers seems less important in developing countries to explain microeconomic price dynamics.
    Date: 2011–06
  3. By: Francesca Francavilla, (Policy Studies Institute at University of Westminster); Gianna Claudia Giannelli (Università degli Studi di Firenze, Dipartimento di Scienze Economiche)
    Abstract: This paper gives some insight into the existence of a positive effect of family planning programmes on women’s employment in developing countries. We study married women aged 15 to 49 living throughout India using a sample drawn from the National Health Family Survey (NFHS-2) for 1998-1999. We focus on a programme of doorstep services delivered by health or family planning (FP) workers who are sent to visit women in their assigned areas. Results derived from the estimation of fixed effect linear probability and conditional logit models show a positive and significant correlation of the share of women living in a local area (village, town or city) that has been visited by FP workers with the probability of women’s employment. A multinomial analysis also shows that the largest positive effect of FP in rural India is to be found on paid work, as opposed to unpaid work, suggesting a potential empowering feedback of demographic measures through labour earnings.
    Keywords: India, women’s employment, family planning, urban and rural development.
    JEL: J13 J16 J18 J22 O18
    Date: 2011
  4. By: Wan Liza (University of Wisconsin Madison, Wisconsin, USA and Private Law Department, IIUM)
    Abstract: Of late, the element of competition has posed to be a conundrum to the emerging economies; Malaysia is no exception. Selection of economies theories indicated; competition has been used in innumerable sense. Entrepreneurial competition among producers defines competition as an attempt to offer product at lower prices, in contrast to the adjective; competition policy denotes deregulation of markets with a framework that elevates market disciplines, eliminates distortion and promotes economic efficiency. In developing a competitive framework: a significant question arose; does competition policy merely generates economic efficiency? Empirical analysis on trade and communication has indicated positive impacts. However, competition in Malaysia i.e. implemented through sector regulation; for example in electricity generation has shown little changes on economic efficiency and other benefits. This paper suggests competition policy advocates economic advantages and maximization of other benefits i.e. customer welfare. Simultaneously effects business dynamics. The key to workable ‘model’ originates from strong and independent structural and administrative implementation of the policy. This research reiterates plausible arguments of the benefits i.e. competitive markets generate efficiency and allow for the reflection of true prices in the markets. Alternatively, it also highlights competition impacts on business dynamics and cognizance of Malaysian Competition Act 2010
    Keywords: competition, competition policy, economic efficiency, Malaysia and Competition Act 2010
    JEL: M0
    Date: 2011–03
  5. By: Andrew T. Young (West Virginia University); Daniel Levy (Bar-Ilan University, Emory University, and RCEA)
    Abstract: We offer the first direct evidence of an implicit contract in a goods market. The evidence we offer comes from the market for Coca-Cola. We demonstrate that the Coca-Cola Company left a substantial amount of written evidence of its implicit contract with its consumers—a very explicit form of an implicit contract. The contract represented the promise of a five cent (nominal) price and adherence to the “Secret Formula”. In general, the implicit nature of such contracts makes observation difficult. To overcome this difficulty, we adopt a narrative approach. Based on the analysis of a large number of historical documents obtained from the Coca-Cola Archives and other sources, we offer evidence of the Coca-Cola Company both acknowledging and acting on this implicit contract. We also make another unique contribution by exploring quality as a margin of adjustment available to Coca-Cola. The implicit contract included a promise not only of a constant nominal price but also a constant quality (i.e., 6.5 oz. of the Secret Formula). During a period of over 70 years, we find evidence of only a single case of true quality change. By studying the margin of adjustment the Coca-Cola Company chose in response to changes in market conditions, we demonstrate that the perceived costs of breaking the implicit contract were large. We argue that one piece of direct evidence on the magnitude of these costs is the aftermath “New Coke’s” introduction in 1985.
    Keywords: Implicit Contract, Explicit Contract, Invisible Handshake, Customer Market, Long- Term Relationship, Price Rigidity, Nickel Coke, Coca-Cola
    JEL: E12 E31 L14 L16 L66 M30 N80 A14
    Date: 2011–03
  6. By: Edgardo Sica
    Abstract: In the last 20 years, the concept of ‘Sustainable Development’ (SD) has become very popular and wide spread in the world. In particular, the environmental dimension of SD asks for new ways to accomplish enhanced quality of life with reduced environmental impact. As a consequence, innovations that contribute to sustainable path ways through an improved environmental quality (the so-called ‘Sustainable Innovations’ - SI s) are facing a growing interest. The present study aims at contributing to the debate about innovation and SD, by focusing on the analysis of SIs from, respectively, the neoclassical and the evolutionary perspective. Whereas neoclassical theorists neoclassical theorists focus on the ‘double externality problem’ of SIs, on the one hand, and on the factors that influence the irimplementation, on the other, evolutionary approach analyses mainly radical technological changes thus stressing the need for a consideration of additional aspects ( in particular social and institutional ones) in the analysis of SIs.
    Keywords: Innovations, Sustainable Development, Neoclassical Theory, Evolutionary Approach
    Date: 2010–12
  7. By: Stewart, Mark B. (University of warwick)
    Abstract: This paper investigates possible spillover effects of the UK minimum wage. The halt in the growth in inequality in the lower half of the wage distribution (as measured by the 50:10 percentile ratio) since the mid 1990s, in contrast to the continued inequality growth in the upper half of the distribution, suggests the possibility of a minimum wage effect and spillover effects on wages above the minimum. This paper analyses individual wage changes, using both a difference-in-differences estimator and a specification involving cross-uprating comparisons, and concludes that there have not been minimum wage spillovers. Since the UK minimum wage has always been below the 10th percentile, this lack of spillovers implies that minimum wage changes have not had an effect on the 50:10 percentile ratio measure of inequality in the lower half of the wage distribution. JEL classification: J31 ; J38 ; J08.
    Date: 2011
  8. By: Manuel Frondel; Steffen Lohmann
    Abstract: Since September 2009, Regulation 244/2009 of the European Commission enforces the gradual phase-out of incandescent light bulbs. As of September 2012, only energyefficient lighting sources will be allowed for sale. Among these are halogen light bulbs, light-emitting diodes (LED), or compact fluorescent light bulbs? often referred to as energy-saving light bulbs. The Commission’s justification for the phase-out of conventional light bulbs maintains that a reduction in the electricity consumed will not only lead to lower energy cost for private households and industrial consumers, but at the same time lead to a decrease in greenhouse gas emissions. This article discusses possible reasons for the slow market diffusion of energy-saving light bulbs and shows that the investment in energy-efficient light bulbs does not necessarily lead to significant cost reductions. Drawing on some illustrative examples, we demonstrate that the use of cheaper incandescent bulbs instead of energy-saving light bulbs can be economically rational in cases of rather low usage times, in which the higher initial purchasing price might only pay off after very long time spans. Furthermore, due to the coexistence with the European Emissions Trading Scheme (ETS), this regulation attains no additional emission reductions beyond those achieved by the ETS alone. We thus conclude that the general ban of incandescent light bulbs is inappropriate and should be abolished by the Commission.
    Keywords: Energy efficiency; rebound effect
    JEL: D12 Q41
    Date: 2011–03
  9. By: Matthias Keese
    Abstract: Numerous contributions in the literature show that household outcomes are influenced by the distribution of intra-household decision power expressed by bargaining indicators such as relative income of the spouses. Since women can expect a longer retirement period, increased female bargaining power could lead to higher savings and wealth accumulation. In contrast, a household could consume more in the current period (e.g., to the benefit of the children) if gender differences in saving preferences had other rationales. Using two German datasets and different measures of bargaining power, my analysis gives evidence that female bargaining power has no or a negative influence on saving and wealth even when controlling for expectations of future support by public pension schemes of the spouses. In some specifications, I also find positive associations between the wife‘s bargaining power and attitudes towards current consumption proxied by repayments of consumer loans. Different results for subsamples of couples with and without dependent children support the validity of the “kids-do-better hypothesis” which indicates that mothers use their bargaining power to enforce higher current consumption in favor of the children.
    Keywords: Intra-household allocation; bargaining power; saving; debt; SOEP; SAVE
    JEL: D1 D91 J16
    Date: 2011–04
  10. By: Jeanne Lievaut
    Abstract: In this article we focus on the private practitioner's voluntary choices of the pricing practices (free care and high fee care) to understand the practitioners' economic behavior. We use an unbalanced panel data comprising 7896 self-employed physicians who were observed over the 1980-2000 period. Our results offer an empirical understanding of the practitioners' motivations and put forward the deformation of medical behavior: a "price" strategy takes a dominant position.
    Keywords: fees, motivations, panel
    Date: 2011
  11. By: Deborah Mabbett
    Abstract: In a recent decision, the European Court of Justice has ruled that insurers cannot discriminate on grounds of sex in setting premiums or determining benefits. This paper discusses the background to this decision. It asks whether we are seeing a US-style ‘rights revolution’, fuelled by judicial activism, as suggested by Dobbin et al’s hypothesis of ‘the strength of weak states’ or Kagan and Kelemen’s account of ‘adversarial legalism’. It is shown that neither of these theories captures the distinctive nature of the ECJ’s intervention. An industry-friendly policy was pursued in regulatory venues, but this was overridden by the ECJ’s interpretation of the fundamental right of equal treatment. However, it is also shown that the judicial defence of fundamental rights is a weak basis for social policy, and does not foreshadow a revolution in the development of social rights in Europe.
    Keywords: gender policy; non-discrimination
    Date: 2011–05–30

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