Stock Market Wealth and Consumer Spending

This article investigates the effects of stock market wealth on consumer spending. Traditional macroeconometric models estimate that a dollar's increase in stock wealth boosts consumption by three to seven cents. With the substantial 1990s rise in stock prices, the nature and magnitude of this "wealth effect" have been much debated. After describing the issues and previous research, I present new evidence from a well‐known consumer survey. The results are broadly consistent with life‐cycle saving and a modest wealth effect: most stockholders reported no appreciable effect of stock prices on their saving or spending, but many mentioned "retirement saving" in explaining their behavior.     

Financial Literacy,Human Capital and Stock Market Participation in Europe

Households’ stock market participation has significant effects on savings and on an economy’s financial development and performance. Yet participation into capital markets is limited and quite heterogonous both among and within several countries. This phenomenon represents an empirical puzzle whose understanding is rather incomplete. In this work, we exploited a combination of datasets for nine European countries and used different econometric specifications that allow to control for endogeneity of financial literacy and human capital, to assess the role of several variables in affecting the probability to participate in the stock market in year 2010. Besides socio-demographic variables, we found that financial literacy has a positive and significant effect on stock market participation, together with the level of human capital and social interaction. Country level differences are explained by such institutional factors as the effectiveness of the education system and by the attractiveness of the stock markets.     

The dynamics of capital accumulation in the US: simulations after piketty

We develop a dynamic model where a competitive firm uses labor and capital, with market clearing rates of return. Individuals are heterogeneous in skills, with an endowment in capital/wealth increasing in skill. Individuals aspire to a socially determined consumption level, with a constant marginal propensity to consume out of income above this level. We also study three variants of the model: one with a higher rate of return for large capitals than for smaller ones, one with a capital levy financing a lump sum transfer, and one with social mobility. We calibrate the model to the US economy and obtain that a steady state exists in all variants, and we obtain convergence to the steady state from the 2012 US wealth distribution. The reduction in the level of the aspirational consumption level is the only way to create wealth for the bottom half of the distribution.     

Winners and losers in the post‐communist transformation: The czech republic in comparative perspective

The gradual dismantling of redistributive practices as part of the transition to a market economy, together with an increase in wage, income, and wealth inequalities make those who actually profited (in relative terms) from the socialist redistribution feel like ‘losers’ of the transformation. Conversely, those who were relatively disfavoured by the communist redistributive policies and who feel strong today in the competition for better life‐chances may consider themselves ‘winners’ of the transition process. This article considers who are the winners and losers informer communist countries and what impact this factor has on the crystallization of political attitudes. The principle assumption is that the two segments of the population uphold quite different views on the consequences of the transition to a market economy and democracy for their life‐chances and maintain different positions on the political spectrum. The analysis starts from a subjective definition of winners and losers based on the perception of ones’ change in social status (social status of the family) and economic situation (families’ wealth) during the years of transformation. Then, objective characteristics of the two groups are examined. Finally, the effects of being a loser or winner on left or right political orientations are analyzed.     

What the 2008 stock market crash means for retirement security

The 2008 stock market crash raises concerns about retirement security, especially since the increased prevalence of 401(k) and similar retirement saving plans means that more Americans are now stakeholders in the equity market than in the past. Using a dynamic microsimulation model, this paper explores the ability of alternate future stock market scenarios to restore retirement assets. The authors find that those near retirement could fare the worst because they have no time to recoup their losses. Mid-career workers could fare better because they have more time to rebuild their wealth. They may even gain income if they buy stocks at low prices and get above-average rates of return. High-income groups will be the most affected because they are most likely to have financial assets and to be invested in the stock market.     

What the 2008 Stock Market Crash Means for Retirement Security

The 2008 stock market crash raises concerns about retirement security, especially since the increased prevalence of 401(k) and similar retirement saving plans means that more Americans are now stakeholders in the equity market than in the past. Using a dynamic microsimulation model, this paper explores the ability of alternate future stock market scenarios to restore retirement assets. The authors find that those near retirement could fare the worst because they have no time to recoup their losses. Mid-career workers could fare better because they have more time to rebuild their wealth. They may even gain income if they buy stocks at low prices and get above-average rates of return. High-income groups will be the most affected because they are most likely to have financial assets and to be invested in the stock market.     

Consumer Behavior in the United States: Implications for Social Security Reform

This article shows theoretically and empirically that an aggregate Euler equation relates the growth rate of per capita consumption to the real interest rate, the ratio of private wealth plus asset income to consumption, and the ratio of social security wealth to consumption. Using the estimated Euler equation, the paper then calculates the steady-state effects of social security reform. Reforms that reduce the ratio of social security wealth to consumption are found to shift the balanced growth paths for the capital stock, output, and consumption upward appreciably.     

What the digitalisation of music tells us about capitalism,culture and the power of the information technology sector

This article examines a striking but under-analysed feature of culture under capitalism, using the example of music: that the main ways in which people gain access to cultural experiences are subject to frequent, radical and disorienting shifts. It has two main aims. The first is to provide a macro-historical, multi-causal explanation of changes in technologies of musical consumption, emphasising the mutual imbrication of the economic interests of corporations with sociocultural transformations. We identify a shift over the last twenty years from consumer electronics (CE) to information technology (IT) as the most powerful sectoral force shaping how music and culture are mediated and experienced, and argue that this shift from CE to IT drew upon, and in turn quickened, a shift from domestic consumption to personalised, mobile and connected consumption, and from dynamics of what Raymond Williams called ‘mobile privatisation’ to what we call ‘networked mobile personalisation’. The second aim is to assess change and continuity in the main means by which recorded music is consumed, in long-term perspective. We argue that disruptions caused by recent ‘digitalisation’ of music are consistent with longer term processes, whereby music has been something of a testing ground for the introduction of new cultural technologies. But we also recognise particularly high levels of disruption in recent times and relate these to the new dominance of the IT industries, and the particular dynamism or instability of that sector. We close by discussing the degree to which constant changes in how people access musical experiences might be read as instances of capitalism’s tendency to prioritise limiting notions of consumer preference over meaningful needs.     

从国民财富表变动看经济政策“纠误”的方向

对2000—2012年国民财富表变动特点的考察表明,财富的需求决定了财富的供给,后者又决定了中国经济和产业的演进结构。中国经过35年的市场体制改革和效率导向的经济政策实施,已经基本解决了居民的"衣、食"短缺现象;未来35年,应该以更加完善的市场体制来创造一个高质量的"住、行"供给体系。当国民财富需求转向住宅、非住宅建筑物和公共基础设施方面之后,增加对各种城市基础设施、住宅与非住宅建筑物的投资来提高城市化发展水平应当是经济发展政策的重点,而不是去抑制一个真实的国民财富需求。因此,增加包括住宅在内的各种资本的积累仍然是中国经济发展的主流。     

Understanding Investment Irreversibility in General Equilibrium

In general equilibrium, irreversibility affects both the wealth of consumers and the return on assets. As long as the inter-temporal elasticity of substitution is realistically low, irreversibility not only prevents capital destruction, but it also induces capital creation. Furthermore, under certain conditions, irreversibility raises the risk premium by increasing the variability of consumption and market portfolio. These issues are dealt in a simple model of investment irreversibility with multiple types of capital. Its tractability allows for analytical results which explain the contrast between the consequences of irreversibility for individual markets and the consequences of irreversibility for the whole economy.     

Constructing Authenticity: A Review of Trends and Influences in the Process of Authentication in Consumption

I review the processes surrounding consumption in the arts and leisure activities, through which consumers, producers, and marketers construct products as authentic. I examine how producers and marketers authenticate their products to differentiate them in an increasingly saturated global market, meeting consumer demand for products that appear ‘true’ or ‘real’. Such authentication creates value for products, which promotes consumption. I delineate what generic forms of authentication people favor, along with how individuals and organizations use various cultural resources to promote products as authentic. These forms include what I term otherizing and traditionalizing.     

The discreet charm of the children of the bourgeoisie: economic capital and its symbolic expressions at an elite business school

We address a largely neglected issue in contemporary research on cultural class divisions: economic capital and its associated lifestyles and symbolic expressions. Using qualitative interviews, we explore how adolescents from wealthy elite backgrounds, namely students at Oslo Commerce School (OCS), traditionally one of the most prestigious upper‐secondary schools in Norway, demarcate themselves symbolically from others. They draw symbolic boundaries against students at other elite schools in Oslo, more characterized by backgrounds with high cultural capital, accusing them of mimicking a ‘hipster’ style. Within the OCS student body, we describe identity work centring on styles of material consumption and bodily distinctions. The most salient dividing line is between those who manage to master a ‘natural’ style, where expensive clothes and the desired bodily attributes are displayed discreetly, and those who are ‘trying too hard’ and thus marked by the stigma of effort. We also show some interesting intersections between class and gender: girls aspiring to the economic elite obey the ‘rules of the game’ by exercising extensive control over their bodies and adhering to demanding bodily norms for their weight and slimness. Such rules are less evident among the boys, where a lack of discipline, unruliness, hard partying and even fighting constitute parts of the lifestyle valued. This article contributes to the field of cultural stratification, highlighting the importance of the ‘hows’ of material consumption when expressing elite distinction. It also adds new insight to the research field of elite education by showing how a mastery of ‘high‐end’ consumer culture is involved in fostering favourable dispositions at elite schools.     

Gender equality in ‘the most equal country in the world'? Money and marriage in Sweden1

This article analyses how Swedish couples perceive the sharing of money and consumption between themselves and their partner. Interviews were conducted with ten Swedish married couples. Each spouse was interviewed separately about their incomes, financial organization, patterns of consumption, views about money and decision-making. Regardless of whether they pooled their incomes or kept money separately, all were in agreement about the importance of equal sharing and access to money and consumption. Despite stated goals of gender equality, however, consumption was not perceived as being shared equally. Two factors central to understanding this were the ways that daily finances were managed and the fact that women had responsibility for the daily finances of the family. Another important aspect was the ways that items of consumption were defined. Food and children's clothes were areas that were in a ‘grey zone’ regarding which money was used to pay for them, and they often fell to the woman. This practical responsibility and associated awareness of the family economy serve as obstacles to women's sense of entitlement and access to money for personal discretionary spending, a problem not experienced by men.     

Consumer perceptions and preferences for public expenditure

This study deals with consumer evaluations of public spending. Ideological and self-interest factors are analysed to determine how these factors are related to consumer perceptions and preferences for public expenditure on legal advice, public transport and hospital services. Involvement in socio-economic issues, voting behavior and public spending preferences are discussed in relation with each other. The ‘fiscal connection’ between taxes and public expenditure is interpreted.     

EVALUATING CHANGES IN THE DISTRIBUTION OF CAPITAL WEALTH

A small-scale general equilibrium model in which the distribution of capital wealth is a key parameter is employed to examine the potential economic consequences of greater capital wealth equality. Every performance indicator examined – aggregate income, consumption equality, social welfare in the sum-of-utilities sense, and aggregate saving –is improved by greater capital wealth equality. However, the bottom-line social welfare gain, relative to the present high-inequality situation – even from the maximum achievable level of complete equality in capital wealth distribution – would be numerically rather modest.     

Migration to the US and marital mobility

When immigrants enter the US they typically access a marriage market with a larger supply of educated spouses compared to the marriage market in their home countries. Absent any selectivity bias, this access should increase the likelihood that migrants ‘marry-up’ in terms of education. We combine survey data on British and German immigrants in the US with data on natives in Britain and Germany to estimate the causal effect of migration on educational mobility through cross-national marriage. To control for selective mating, we instrument educational attainment using government spending on education in the years each person was of school-age. To control for selective migration, we instrument the migration decision using inflows of immigrants to the US during puberty and early adulthood. We find strong selectivity effects that work against the positive prospects of the US marriage market. All migrants give up spousal education in exchange for US entry and assimilation. Migrant men also give up spousal education because they cannot compete with native men as bread-earners. Migrant women have some advantage in the US marriage market, as they can compete with native women in home production.     

What Not to Wear? Girls,Clothing and ‘Showing’ the Body

Consumption practices of children in contemporary Western societies are implicated in the reconstruction of childhood, according to both popular debate and to those academic perspectives stressing the individualisation of identities within the life course of late modern consumer societies. Yet, little is known about the meanings children themselves give to their own consumption. Drawing from an ethnographic study of children aged 6–11 years and their families, the paper presents girls’ constructions of fashion in relation to their own bodies and to those of others. It is shown that although girls may both desire and actually ‘dress up’ in fashionable clothing, they present a range of contingent and contradictory meanings for doing so. For some girls, ‘dressing up’ in certain clothes may be a way of ‘ageing up’ toward feminine adulthood, albeit in restricted contexts and after negotiations between themselves and their parents as to what can be worn and where. Nonetheless, girls in the study also showed anxieties and disapproval of ‘showing the body’ through ‘revealing’ clothing. The article concludes by considering the implication of these findings for debates about gendered childhoods, and intergenerational relations in late modern consumer society.     

Techno economic systems and excessive consumption: a political economy of ‘pathological’ gambling

This article argues that gambling is a paradigmatic form of consumption that captures the intensified logic at the heart of late modern capitalist societies. As well as a site of intensified consumption, it claims that gambling has also become the location of what has been described as a new form of ‘social pathology’ related to excess play. Drawing on Castells' (1996) notion of techno‐economic systems, it explores the ways that intersections between technology, capital and states have generated the conditions for this situation, and critiques the unequal distribution of gambling environments that result. It argues that, while the products of these systems are consumed on a global scale, the risks associated with them tend to be articulated in bio‐psychological discourses of ‘pathology’ which are typical of certain types of knowledge that have salience in neo‐liberal societies, and which work to conceal wider structural relationships. We argue that a deeper understanding of the political and cultural economy of gambling environments is necessary, and provide a synoptic overview of the conditions upon which gambling expansion is based. This perspective highlights parallels with the wider global economy of finance capital, as well as the significance of intensified consumption, of which gambling is an exemplary instance. It also reveals the existence of a geo‐political dispersal of ‘harms’, conceived as deteriorations of financial, temporal and social relationships, which disproportionately affect vulnerable social groups. From this, we urge an understanding of commercial gambling based on a critique of the wider social body of gambling environments within techno economic systems, rather than the (flawed) individual bodies within them.     

A note on the measurement,quantification, and use of consumer confidence

It is argued that consumer spending on durable items is not necessarily the only type of consumer spending to be influenced by consumer confidence but. given a certain degree of affluence. spending on non-durables can also be influenced by it.Different methods of quantification of consumer confidence are touched upon and the issue of equal weighting versus differential weighting, where weights are ascertained by the use of factor analysis, is discussed in more detail. Various indices of consumer confidence are computed and tested by means of regression analyses. It was found that it is immaterial whether a composite measure of confidence is based on factor analysis or simply on the summing and averaging of responses.The results of the regression analyses suggest that the hypothesis that consumer sentiment partly determines movements in private consumption expenditure holds true, especially in the case of durables. There are indications, however, that spending on non-durable goods might also be influenced by consumer sentiment.     

Think rich,feel hurt: the critique of capitalism and the production of affect in the making of financial subjects in South Korea

This article describes the process of financial subjectification by observing a private educational programme on financial self-management in South Korea. ‘Wealth-tech’ is a popular Korean term that refers to techniques of personal finance and money-management. Ethnographic research on a private educational programme on the subject of wealth-tech brings to light justifying mechanisms of financial investments and moral foundations for the pursuit of wealth whereby laypeople’s engagement with, and attachment to, financial markets are (re-)vitalized. In particular, this study highlights the role of critiques about capitalism as well as the production of affect in the making of financial subjects. By re-appropriating critiques of capitalism and employing therapeutic narratives, the wealth-tech pedagogy redefines financial investment as an act of resistance against the ills of capitalism and foreign capital. Moreover, this case study shows that wealth-tech is legitimized not solely by risk calculations per se, but also by feelings of hurt. Participants tend to transform themselves into active wealth-tech practitioners by cultivating the kind of affect that I call here ‘thinking rich, feeling hurt’. Therefore, the financial subjects configured in this wealth-tech pedagogy are those who feel hurt, and in this emotive state are led to think from the perspective of the rich. Moreover, they are configured not only as self-governing individuals but also as collective beings who resist foreign capital through their own engagement with financial markets. In this process of financial subjectification, the beliefs that finance can make them rich become consolidated. By illustrating these Korean experiences, this article calls attention to critical and affective practices in the process of financial subjectification, in particular those that take shape at the encounter between market rationality and ordinary experiences, memories, and feelings whereby laypeople translate discourses and techniques of financial capitalism into their own values and judgments.