National Culture of Indulgence as Predictor of Prosocial Behavior: Governmental Effectiveness as Boundary Condition

Previous studies of national culture and prosocial behaviors have been limited to Hofstede’s five traditional culture dimensions. We introduce the fairly new and less studied cultural dimension of indulgence versus restraint (IVR) as a predictor of prosocial behaviors. We tested the effect of IVR on prosocial behavior over Hofstede’s previously studied dimensions. We also tested the moderating effect of government effectiveness on the relationship between indulgence and prosocial behavior. We crossed data for cultural dimensions from Hofstede with data from the world-giving index for prosocial behavior and data for government effectiveness from the World Bank. In total, eighty-seven countries entered our model. Indulgence predicted volunteering above the other researched cultural dimensions. It did not predict helping a stranger or donating. Among the cultural dimensions, only uncertainty avoidance was also significant in the prediction of volunteering. Uncertainty avoidance was the only cultural dimension that predicted donating. Individualism was not significant in the prediction of prosocial behaviors. Long-term orientation was the only cultural dimension that predicted helping a stranger (but not volunteering and donating) over other researched cultural dimensions. We found that government effectiveness is a boundary condition to the link between indulgent cultures and two prosocial behaviors (donating and helping a stranger but not for volunteering). Our results indicate that only in countries with high government effectiveness does indulgence predict prosocial behaviors, and not in cultures with low government effectiveness.

     

Interacting mechanisms of time inconsistency

We interact two prominent behavioral mechanisms of time inconsistency that have been used to study inadequate saving: hyperbolic discounting and short-term planning. Hyperbolic discounting is a conventional way to model impulsive decision making, and short planning horizons have been used to represent myopia. One might expect that interacting both mechanisms within the same model would compound the inadequacy of saving. However, our key finding takes the form of a paradox: hyperbolic discounting does not affect consumption and saving allocations if the planning horizon is short and fixed, although it will affect allocations if the planning horizon is equal to the remaining life span. We demonstrate analytically that this finding is robust to the shape of the disposable income path, to the coarseness of the time grid, and to alternative forms of the period utility function.     

Generalisiertes Vertrauen und die frühe Verbreitung der Internetnutzung im Gesellschaftsvergleich

Does generalized trust merely foster economic growth as empirically demonstrated in recent research? Or does this cultural resource also facilitate technological change on which future economic growth will rest? We argue that this is likely. In order to empirically clarify this issue we take the recently used indicator for generalized trust and tolerance as a predictor for the remarkable country differences in Internet diffusion (1997 and 1999). In a full sample of 34 and a sub-sample of 21 rich countries we find statistically solid effects which for rich countries are furthermore quite substantial. The effects hold also after controlling for average material wealth, early proliferation of tertiary education, quality of general education and density of scientist and engineers in research and development. Our findings also suggest to enrich the socially under-specified models of discontinuous technological change in order to better account for the differences in early adoption of innovations.     

Consumption,time and the environment

This paper combines a time-allocation approach with a model of economic dynamics, based on the accumulation of human capital, and constrained by the environment. Consumption is modelled as an activity, combining time and commodities, and embedded in the environment. An economic interpretation for a structural shortage of time in consumption activities is suggested. It is also shown, that the environmental embeddedness of consumption can contribute to restoring more balanced proportions of time and commodities in consumption. In a dynamic setting the paper also discusses the effects of discounting on consumption, the use of time and the environment. It is found that, within a certain range of the rate of discount, a ‘discounting trap’ may arise, significantly depressing the level of environmental quality in the long-run equilibrium.     

Socioeconomic differences in early childhood time preferences

This article examines the extent to which early childhood socioeconomic differences emerge in hyperactivity, impulsivity and persistence, all of which are psychometric analogues to how economists conceptualise time discounting. We control for a wide range of factors including parental investment and proxies for maternal time preferences. Our results show substantial social class variations across measures at age 3. We find weak evidence that these measures are predicted by differential maternal behaviours (e.g. savings behaviour, smoking) but relatively stronger evidence that these traits are transmitted through the parents’ own non-cognitive skills (self-esteem, attachment) and parental time investments (time spent reading to the child and teaching the child to write, sing).     

Trading Later Rewards for Current Pleasure: Pornography Consumption and Delay Discounting

Internet pornography is a multi-billion-dollar industry that has grown increasingly accessible. Delay discounting involves devaluing larger, later rewards in favor of smaller, more immediate rewards. The constant novelty and primacy of sexual stimuli as particularly strong natural rewards make Internet pornography a unique activator of the brain's reward system, thereby having implications for decision-making processes. Based on theoretical studies of evolutionary psychology and neuroeconomics, two studies tested the hypothesis that consuming Internet pornography would relate to higher rates of delay discounting. Study 1 used a longitudinal design. Participants completed a pornography use questionnaire and a delay discounting task at Time 1 and then again four weeks later. Participants reporting higher initial pornography use demonstrated a higher delay discounting rate at Time 2, controlling for initial delay discounting. Study 2 tested for causality with an experimental design. Participants were randomly assigned to abstain from either their favorite food or pornography for three weeks. Participants who abstained from pornography use demonstrated lower delay discounting than participants who abstained from their favorite food. The finding suggests that Internet pornography is a sexual reward that contributes to delay discounting differently than other natural rewards. Theoretical and clinical implications of these studies are highlighted.     

Healthy, educated and wealthy: A primer on the impact of public and private welfare expenditures on economic growth

In this paper, we provide first evidence of the impact of public and private expenditures in health and education on economic growth, via their influence on people's health, skills and knowledge. We consider a growth accounting framework in order to test whether countries that devote a larger amount of resources to the consumption of health and educational services experience higher growth rates. We also test whether the effects on economic growth of public expenditure in health and education differ from those of private expenditure. Our empirical analysis is based on a panel of 19 OECD countries observed between 1971 and 1998. The results are consistent with the hypothesis that health and education expenditure affects positively growth. The estimated impact is stronger for health than for education. More importantly, we find some evidence that public expenditure influences GDP growth more than private expenditure.     

The Role of Progress Factors Explaining Inefficiencies in Transition Countries

This paper examines whether progress in transition has a significant effect on the economic efficiency for 24 transition countries from 1990 to 2006. It uses nine progress factors to analyze the role of the progress factors to explain inefficiencies. It also questions the effect of the transition countries that recently joined the European Union on efficiency. The results suggest that the average efficiency scores for EU-N10 are much higher than the average efficiency scores for SEE/CIS. The scores increase over time for both groups of transition countries. Reforms also contribute to efficiency in general.     

The use of risk in understanding financial decisions and institutional uncertainty

The idea that rationality and emotional factors are involved in financial decisions is well accepted in many economic approaches and in organisation theory. This paper compares specific relevant arguments in behavioural finance and sociology. The aim is to show the implications of these different analyses for the financial sector. The question is whether behavioural finance emphasises the concept of risk more than uncertainty. The paper suggests that cognitive and emotional factors are usefully examined in light of approaches from both behavioural finance and sociology. The first looks at individuals primarily, the second at structural (policy and market) factors. I argue that the latter influence organisational choices of different time orientations towards the future. In exploring the potential of this approach, the paper poses three organisational decision models, that take uncertainty and its relevant social institutions into account, while acknowledging that time preferences and discounting by individuals are well-explored in behavioural economic frameworks.     

Divorce and the business cycle: a cross-country analysis

In this paper, we examine the role of the business cycle in divorce. To do so, we use a panel of 29 European countries covering the period from 1991 to 2012. We find the unemployment rate negatively affects the divorce rate, pointing to a pro-cyclical evolution of the divorce rate, even after controlling for socio-economic variables and unobservable characteristics that can vary by country, and/or over time. Results indicate that a one-percentage-point increase in the unemployment rate involves almost 0.025 fewer divorces per thousand inhabitants. The impact is small, representing around 1.2 % of the average divorce rate in Europe during the period considered. Supplementary analysis, developed to explore a possible non-linear pattern, confirms a negative relationship between unemployment and divorce in European countries, with the inverse relationship being more pronounced in those countries with higher divorce rates.     

Economic welfare,civil liberty,and suicide: an empirical investigation

Performing an international cross-section study for 30 countries, this paper investigates the dependence of suicides rates on real income per capita, real income growth and civil liberty. Suicide rates are transformed into logits, and weighted seemingly unrelated Zellner–Aitken estimates are obtained for both sexes and seven age groups, where the weights correspond to the size of the population in each of the subgroups of the different countries. All three variables have significant effects on the suicide rate. The economic variables have a positive influence: the higher real per capita income and/or real economic growth, the higher the suicide rate is. But these results vary between age groups: income plays a more important role for the middle age group, whereas economic growth is more important for the older people. Moreover, older women react stronger to income growth than older men. With respect to civil liberty, we get ‘expected’ results: the more liberty, the lower the suicide rates.     

Who feels constrained by high debt burdens? Subjective vs. objective measures of household debt

I analyze differences in debt perception of households confronted with an objective debt burden. Using data from the German Socio-Economic Panel, my econometric analysis shows that a subjective debt burden is not only influenced by the current constellation of income, debt service and, possibly, the potential subsistence level. Expectations of the personal economic situation and several non-financial factors affect debt perception as well. Women report significantly higher subjective debt burdens. Unemployment is also associated with drastically higher self-assessed debt burdens even when controlling for the current financial situation and for expectations. Some differences in the subjective perception of objective debt burdens can be attributed to personality traits (such as locus of control) and life satisfaction. I draw the following conclusions: First, self-assessed debt burdens contain information beyond the current economic situation, e.g., expectations of future incomes. Second, relying on subjective debt statements can lead to biased results for policy analysis if the researcher does not account for non-financial factors.     

The Determinant of Foreign Direct Investment in ASEAN: A Semi-Gravity Approach

This study used a semi gravity model to identify the determinants of FDI in ASEAN countries. The results revealed that besides the market size for host and source country, other criteria such as the shorter the distance, common in language and border, the extended market relative to distance also attracts more foreign investors. Other macroeconomic factors such as lower inflation rate, the slightly higher in exchange rate and good management of the government budget are among the key factors that attract more FDI. In addition to economic factors, social factors such as good telecommunication and infrastructure and non-economic factors such transparency and trade policy also encourage more investors to the ASEAN.     

A Theory of Time Preference

This article proposes that people generally prefer present consumption to future consumption because their expected utility from consumption (eventually) falls as their mental and physical abilities (eventually) decline with age. Moreover, contrary to the ubiquitous intertemporal formulation with a constant rate of time preference and contrary to three recent theories of time preference that predict decreasing discounting as people age, this article asserts that discounting increases over the life cycle. This hypothesis is supported by data from the Panel Study of Income Dynamics as well as evidence from numerous previous studies.     

A Theoretical Framework Explaining Cross-Cultural Sexual Harassment: Integrating Hofstede and Schwartz

After a slow beginning, research on sexual harassment from a cross-cultural and international perspective has begun to assume more importance in the literature. Several recent studies have given weight to cultural differences in explaining cross-cultural sexual harassment behaviors across samples from various countries. Herein, we synthesize elements of Hofstede's and Schwartz's cross-cultural theories and specifically apply them to the field of sexual harassment. Our model highlights how the integrated conceptualization based on Hofstede and Schwartz's work is consistent with much of the existing empirical research on sexually harassing or exploitative behaviors, directed towards women, in many different countries and cultures. We offer testable propositions for future empirical research as well as theory development in the area of cross-cultural sexual harassment. The derived research propositions suggest that differences in the likelihood to sexually harass by men, as well as the tolerance of sexual harassment by women, vary across different countries due to the fundamental differences in cultures and values.     

The association between saving disposition and financial distress: A genetically informed approach

Saving disposition, the tendency to save rather than consume, has been found to be associated with economic outcomes. People lacking the disposition to save are more likely to experience financial distress. This association could be driven by other economic factors, behavioral traits, or even genetic effects. Using a sample of 3,920 American twins, we develop scales to measure saving disposition and financial distress. We find genetic influences on both traits, but also a large effect of the rearing family environment on saving disposition. We estimate that 44% of the covariance between the two traits is due to genetic effects. Saving disposition remains strongly associated with lower financial distress, even after controlling for family income, cognitive ability, and personality traits. The association persists within families and monozygotic twin pairs; the twin who saves more tends to be the twin who experiences less financial distress. This result suggest that there is a direct association between saving disposition and financial distress, although the direction of causation remains unclear.     

The influence of negative newspaper coverage on consumer confidence: The Dutch case

This paper studies the empirical relationship between the real economy, consumer confidence and economic news coverage in national newspapers for the Netherlands during the period 1990-2009. Media-attention for economic developments is associated with consumer confidence, with more negative news decreasing consumer confidence; this result holds after controlling for the real economy (stock-market). The relationship differs for different business-cycles. The effect is in particular stronger for the months following the beginning of the credit-crisis. This suggests that in line with many popular concerns negative news is among factors influencing the hardness of the landing of the current credit-crisis.     

THE OPTIMAL PUBLIC EXPENDITURE FINANCING POLICY: DOES THE LEVEL OF ECONOMIC DEVELOPMENT MATTER?

This paper explores how the optimal mode of public finance depends on the level of economic development. The theoretical analysis suggests that in the presence of capital market imperfection and liquidity shocks, the detrimental effect of inflation on growth is stronger (weaker) at lower (higher) levels of economic development. Consequently, income taxation (seigniorage) is a relatively less distortionary way of financing public expenditure for low-income (high-income) countries. We provide empirical support for our model's predictions using a panel of 21 Organization for Economic Cooperation and Development countries and 40 developing countries observed over the period 1972–1999. ( JEL E44, E6, H6, O42)     

Economic Hardship and Family-to-Work Conflict: The Importance of Gender and Work Conditions

Using data from a 2007 national survey of working Americans, we examine the association between economic hardship and family-to-work conflict (FWC). We also assess contingencies of this association, focusing particularly on gender and several work conditions. Findings indicate that economic hardship is associated with higher FWC; this pattern is stronger among men. Three work conditions also function as effect modifiers: The positive association between hardship and FWC is stronger for workers with less job authority and more creative work activities. Job pressures also modify this association, but overall, respondents with higher pressures report greater FWC. We discuss how our observations contribute to knowledge about the links between economic conditions and the family–work interface and the importance of status and work-related contingencies.     

Debiasing or rebiasing? Moderating the illusion of delayed incentives

This paper studies corrective strategies for the illusion of delayed incentives (Soman, 1998), the phenomena that money-for-effort transactions that are unattractive in the present appear attractive when they are in the future. This illusion occurs because future effort is discounted more heavily than future monetary outcomes. In this research, we show that this bias of differential discounting can be corrected by asking consumers to perform effort at the time of decision-making. We further outline three explanations for why this intervention attenuates the illusion of delayed incentives, and discuss whether these explanations constitute a debiasing effect or a rebiasing effect (Larrick, 2004). We report the results of two laboratory experiments and discuss theoretical and practical implications of our findings.