When symbolism overtakes quality: Materialists consumers disregard product quality when faced with luxury brands

Consumers use extrinsic and intrinsic cues to set preferences and make purchase decisions. However, the extent to which luxury-related extrinsic cues determine consumer preferences and whether the relative weighting of extrinsic vs. intrinsic cues depends on consumers’ values is still unclear. We investigated how luxury vs. non-luxury brands affect consumer preferences, and how this impact is moderated by consumers’ materialistic values. Results from Experiment 1 showed that materialistic and non-materialistic participants similarly appreciated products with luxurious brands. However, compared with non-materialistic participants, materialistic participants devaluated products that were tagged as non-luxurious brands. In Experiment 2, we investigated how product quality interacts with brands and whether materialistic values moderated this interaction. Materialistic participants paid more attention to brand-related cues than to quality-related cues, whereas non-materialistic participants considered these cues similarly. Taken together, the results of these two studies suggest that materialism influences the way extrinsic (i.e., brand) and intrinsic (i.e., quality) information is combined during product evaluation. These results highlight the importance of materialism in consumer decision-making, especially in the context of luxury consumption.     

Charitable Giving as a Luxury Good and the Philanthropic Sphere of Influence

Using regression analysis, 41 years of charitable giving and income data was evaluated to determine if charitable giving is a luxury, normal, or inferior good, and to determine the income elasticity for separate nonprofit sectors. Total Giving to the nonprofit subsector as well as most nonprofit sectors (Religion, Education, Human Services, and Environment) is a normal good, while Arts and International giving are likely luxury goods. However, evidence suggests that Health and Public Benefit are likely inferior goods. This research makes three contributions. First, it offers quantitative data as evidence in the supply-side and demand-side debates. Second, owing to income elasticities, researchers propose the Philanthropic Sphere of Influence and postulate that as incomes rise, donors are more likely to give to causes from which they are less likely to personally benefit. Third, by evaluating charitable giving as a whole and then by each subsector, the research demonstrates that each nonprofit subsector responds uniquely to changes in income. Therefore, nonprofit sectors should be evaluated separately.     

An exploratory study of the relation between concrete and abstract product attributes

It is argued that the abstract product attributes that consumers mention in a research setting should not be interpreted as combinations of the more concrete attributes consumers mention. Results from a laddering study show that a majority of elicited abstract product attributes are unrelated to concrete attributes. Furthermore, these unrelated abstract attributes are about different product aspects than the related abstract attributes. These findings are discussed in the light of the problem of ‘actionability', and of models for new product development.     

“Wrong place to get help”: A field experiment on luxury stores and helping behavior

Three experiments were conducted in field settings. It was hypothesized that luxury stores may act as environmental reminders of materialism and that helpfulness would vary according to the presence or absence of such cues. Study 1 (N = 80) indicated that consumers coming out of famous brand stores displayed less helpfulness, as compared to mere passersby. Study 2 (N = 112) showed passersby were less helpful near a luxury brand store than in an ordinary street with no shops. In Study 3 (N = 360), passersby were less helpful when walking down a street lined with highly exclusive stores, as compared to streets with ordinary stores or no stores. Results, limitations, and directions for future research are discussed.     

THE NONPROFIT FIRM: A POTENTIAL SOLUTION TO INHERENT MARKET FAILURES

This article analyzes the differences in products offered by nonprofit and for-profit firms in a monopolistically competitive industry where goods are differentiated both by product attributes and by the degree to which benefits are public. Because nonprofit firms receive donations, they provide a Pareto improvement of the equilibrium product set: nonprofit firms will be less biased against goods with a high social good component than will their for-profit counterparts, hi addition, the optimal donations function which equates the nonprofit equilibrium product set to the set which maximizes societal welfare is derived.     

INTERNATIONAL TRADE AND LABOR‐MARKET DISCRIMINATION

Discrimination reduces the matching probability and output in the skill‐intensive differentiated‐product sector so that discrimination‐induced comparative advantage may overshadow technological comparative advantage in determining the pattern of trade. Trade liberalization generates a decrease in the skilled‐worker wage gap in the country that is an exporter of goods from the simple sector but increases it in the country that is a net exporter of differentiated products. Trade liberalization has an opposite effect on firms. In the country that is an exporter of simple goods, trade liberalization reduces the profits of the nondiscriminatory firms by more than those of the discriminatory firms. (JEL F16, F66, J71)     

Distribution and Poverty Impacts of Tax Structure Reform in Developing Countries: How Little We Know

The past two decades have witnessed widespread reforms of tax structures in developing countries. This article reviews available evidence on the effects of various taxes, and hence of tax structure reform, on distribution and the poor. Taxes on exports and goods consumed especially by the poor (e.g. kerosene) are the most consistently found to be regressive, whereas taxes on ‘luxury’ items such as cars, beverages and alcohol are the most likely to be progressive. Sales taxes are slightly more progressive, or less regressive, than taxes on imports. The reforms implemented are therefore unlikely to have worsened the effects of the tax structure on the poor.     

Interhousehold grants in peninsular Malaysia: Impact of grantors' characteristics on amount of grants given

Grants of money, goods, and services are one-way transfers between households. Tobit analysis reveals that race, household structure, household income, transportation resources (viz., vehicles owned), goods and service grants received, husband's education, and stock of small animals owned (viz., a common commodity gift in Malaysia) are characteristics of granting households that are influential in determining the amount of grants given. The incidence of granting is substantially lower among Indian than among Chinese or Malay households, although Indian households give the highest mean amount of grants. Multivariate analysis reveals that, other factors held constant, Malay households are the most generous and Indian households the least so in giving interhousehold grants. When giving of grants is conceptualized as a consumption expenditure, granting is observed to have a relationship to income similar to that of necessities rather than luxury goods.His areas of research interest are grants economics, labor economics, welfare economics, and consumer rights and protection. He received his Ph.D. in Consumer and Family Economics from the University of Missouri.His research interests include various aspects of social policy and family economic circumstances and functioning. He received his Ed.D. from the University of Missouri.     

ENTRY AND EXIT,PRODUCT VARIETY,AND THE BUSINESS CYCLE

We study the stochastic behavior of a dynamic general equilibrium model with monopolistic competition. Each seller sells his product in the consumption goods as well as the investment goods market and has market power in both. Consumers derive utility from a constant elasticity of substitution (CES) aggregate of all the consumption goods and augment their capital stock by a CES aggregate of all the investment goods. We analyze the equilibrium of this economy allowing for an endogenous determination of the number of firms and therefore of products. The principal effect we wish to highlight is the endogenous propagation and magnification of technology and preference disturbances through product space variations. (JEL E32, D43, L16)     

Review essay: empires, ancient and modern

This essay drews attention to two books on empires by historians which deserve the attention of sociologists. Bang's model of the workings of the Roman economy powerfully demonstrates the tributary nature of per-industrial tributary empires. Darwin's analysis concentrates on modern overseas empires, wholly different in character as they involved the transportation of consumption items for the many rather than luxury goods for the few. Darwin is especially good at describing the conditions of existence of late nineteenth century empires, noting that their demise was caused most of all by the failure of balance of power politics in Europe. Concluding thoughts are offered about the USA.     

Consumers' Online Information Search Behavior and the Phenomenon of Search vs. Experience Products

This study investigates consumers' importance evaluation and usage of the Internet as an information source, compared with other traditional information sources. The main issue is the extent to which experience products can be transformed so as to be searchable on the Internet. The results of a web-based survey showed that consumers of experience products tended to use more online information than those of search products. Online information sources from other consumers and neutral sources were perceived to be more important and were used more often by the consumers of experience products; whereas retailer/manufacturer websites were perceived to be more useful by consumers of search products. Perceived usefulness, perceived ease-of-use, market mavenism, and usage of offline information sources were also positively related to the usage of online information.     

Perceived inflation: The role of product accessibility and attitudes towards inflation

Little is known about the psychological mechanisms underlying judgments of perceived inflation as empirical evidence is sparse. In two studies, we investigated two factors that are expected to play a significant role in global judgments of perceived inflation: product accessibility and attitudes towards inflation. In Study 1 (N = 253), primed participants retrieved five products whose prices had increased (or decreased) in the past year before expressing a judgment of past inflation (versus non-primed participants with no retrieval task). In Study 2 (N = 101) participants were merely exposed to a series of products, and asked to estimate their frequency of purchase, before judging past inflation. In one condition, the prices of the majority of products had actually increased in the last year, while in another condition they had decreased. In both studies, attitudes towards inflation were also measured. Product priming consistently affected inflation judgments in the direction of an assimilation effect. Also, more negative attitudes towards inflation were associated with higher judgments of perceived inflation. Path analysis confirmed that both product accessibility and attitudes are potential bases for judgments of perceived inflation. These findings suggest that multiple psychological influences may underlie global judgments of perceived inflation.     

Lifecycle effects on consumer financial product portfolios in South Africa: An exploratory analysis of four ethnic groups

This paper assesses ownership of 16 financial products by households in different lifecycle stages amongst four ethnic groups (Africans, Coloureds, Asians, and Whites) in South Africa. The lifecycle hypothesis indicates younger households should own more debt-related financial products, whereas households in intermediate lifecycle stages should own more financial products to accumulate assets; both these claims are disconfirmed for all groups. However, White households in intermediate household stages own more financial products than younger and older households, consistent with previously reported lifecycle findings in Western countries. Consistent with the literature on innovation adoption we find that younger, affluent and highly educated households amongst the other three ethnic groups tend to own more financial products than older Africans, Coloureds and Asians. These results indicate that innovation adoption literature may better describe financial product ownership in developing countries than the lifecycle hypothesis.     

Altruism in valuing government and market-supplied goods

Respondents in two studies rated the value of goods and services generally, according to their perceived self-interest, and according to their perception of the public-interest. Study 1 found that the general ratings of government-provided goods were closer to public-interest ratings than to self-interest ratings, suggesting valuation of such goods is not solely determined by self-interest. Study 2 found a similar phenomenon applied for some market-supplied goods.     

The willingness to pay–willingness to accept gap revisited: The role of emotions and moral satisfaction

While many earlier studies have found that people’s maximum willingness to pay for having a good is often substantially lower than their minimum willingness to accept not having it, more recent experimental evidence suggests that this discrepancy vanishes for standard consumption goods when an incentive-compatible design without misconceptions is used. This paper hypothesises that there is nevertheless a discrepancy for goods with a perceived moral character, such as contributions to a good cause, and moreover that the reason for this discrepancy can largely be explained by differences in emotions and moral perceptions. The results from a real-money dichotomous-choice experiment, combined with measurements of emotions and morality, are consistent with these hypotheses.     

The Spatial Ecology of Power: Long‐Distance Trade and State Formation in Northeast Africa

This study examines the longue durée pattern of state formation in northeast Africa by situating its determinate dynamics within a wider constellation of social‐property relations and inter‐regional exchange networks. Given the social dynamics of tributary relations, increases in surplus extraction typically took the form of extensive territorial expansion rather than intensive augmentation of production, and the supply of means of coercion (weapons) and means of persuasion (luxury goods) with which to build retinues and alliances was a crucial determinant of the persistent oscillations between centralized rule and periods of pronounced regional autonomy. The sustained spatiality of power in the region was consequently shaped by the uneven and combined dynamics of production and exchange relations rather than by any simple dominance of one over the other. Within the more inclusive spatiotemporal framework adopted here, it is their historical imbrications rather than their idealized juxtapositions that calls for critical analysis and social explanation.     

物联网在特殊高低端物品物流服务中的应用

我国目前的物流服务水平整体偏低,对于一些易燃、易爆、易腐以及一些货值较高的商品的物流服务中存在着更多问题。由于不同种类的商品其物流服务活动有显著的差异,尤其是一些带有特殊性的商品,所以本文首先将这些产品进行高端、低端种类的划分,然后把物联网的技术引入这些高低端商品的物流服务活动中,分别构建基于物联网的高低端商品物流服务系统,并且通过此系统来加强对高低端商品的物流服务过程的全面控制、全面监控,有效保证产品的质量和避免事故的发生,从而实现高效、高质的物流服务。     

Frequency of price increases and perceived inflation. An experimental investigation

The effect of frequency of subjective experience of price increases on perceived inflation, i.e. the subjective experience of general price development, is investigated. The paper presents a two-phased psychological model of perceived inflation: first, information about product price increases is gathered in daily purchase. Second, these are integrated into one perceived inflation judgment. In the integration phase, the complexity of the task should trigger heuristic processing: higher frequency of price increases should enhance their availability and thus perceived inflation. Participants simulated purchases in two scenarios. Frequency of products with increased prices was varied while overall expenditure increases as well as relative price increase of individual products were balanced. Experiment 1 presented a high frequency condition with a majority of increased prices relative to previously learned reference prices and a low frequency condition with a majority of stable prices. Experiment 2 balanced cognitive effort for product price change estimation over conditions by replacing absolutely stable prices with slightly increased prices. As predicted, perceived inflation was higher with high frequencies of increased prices, while price increases of individual products were judged correctly. Experiment 3 ruled out the alternative hypothesis that presentation duration, which in the previous experiments correlated with presentation frequency, might have been the determining factor.