Showing papers in "Journal of Consumer Policy in 2012"
TL;DR: In this article, consumer reactions to a fully furnished and equipped smart home are analyzed using focus groups (four groups with a total of 29 participants) and the analysis looks at consumer perceptions of and reactions to an energy management system which optimizes electricity consumption based on different ICT solutions.
Abstract: European and national policies are aimed at reducing greenhouse gases and increasing energy efficiency—also in the household sector. For this purpose, new solutions for private homes based on information and communication technologies (ICT) are being developed and tested. However, up to now, hardly anyone has seen, experienced or lived in an environment that offers the full range of ICT-based energy management solutions. In this study, consumer reactions to a fully furnished and equipped smart home are analysed using focus groups (four groups with a total of 29 participants). The analysis looks at consumer perceptions of and reactions to an energy management system which optimizes electricity consumption based on different ICT solutions. The topics that were demonstrated in practice and then discussed with the participants included variable tariffs, smart metering, smart appliances, and home automation. In general, there were positive group reactions to the smart home environment. Consumers saw many advantages for themselves; especially the chance to save money. However, giving up high levels of flexibility and adapting everyday routines to fit in with electricity tariffs were regarded as difficult. Smart appliances and smart meters were therefore considered to be necessary elements by most participants. Concerns regarding data privacy played a major role in one of the groups.
264 citations
TL;DR: In this paper, the authors investigated the effect of personality on sustainable consumer behavior and found that more agreeable and more open consumers are more likely to place importance on and to act on social and environmental concerns.
Abstract: Sustainable consumer behaviour—behaviour motivated or influenced by social and/or environmental considerations—is an important topic in public policy and consumer psychology. Research on the antecedents of sustainable consumer behaviour has found a robust “gender effect”: women are more likely than men to express concern about consumption’s broader impacts and to act upon those concerns. The mechanisms underlying the gender effect have not been well elucidated. At the same time, more limited research has found that sustainable consumer behaviour is also influenced by personality: more agreeable and more open consumers are more likely to place importance on and to act on social and environmental concerns. Separate research in personality psychology has shown that women tend to be more agreeable than men. The authors integrate these findings to propose and test a model in which personality mediates the effect of sex on sustainable consumer behaviour. The personality differences mediating this effect are the same ones elsewhere subsumed within “gender” differences. Our findings clarify the mechanisms underlying the observed sex effect, confirm the utility of personality constructs in clarifying differences in consumer attitudes and behaviours, and have compelling implications for public policy.
200 citations
TL;DR: In this paper, a survey was carried out in order to measure the difference between the ecological footprint of green and brown consumers, and no significant difference was found between their ecological footprints, suggesting that individual attitudes and behaviour do not always reduce the environmental impacts of consumption.
Abstract: Preceding research has made hardly any attempt to measure the ecological impacts of pro-environmental behaviour in an objective way. Those impacts were rather supposed or calculated. The research described herein scrutinized the ecological impact reductions achieved through pro-environmental behaviour and raised the question how much of a reduction in carbon footprint can be achieved through voluntary action without actually affecting the socio-economic determinants of life. A survey was carried out in order to measure the difference between the ecological footprint of “green” and “brown” consumers. No significant difference was found between the ecological footprints of the two groups—suggesting that individual pro-environmental attitudes and behaviour do not always reduce the environmental impacts of consumption. This finding resulted in the formulation of a new proposition called the BIG (behaviour–impact gap) problem, which is an interesting addition to research in the field of environmental awareness gaps.
168 citations
TL;DR: In this paper, the authors investigate whether life-course transitions can serve as starting point for sustainable consumption interventions, assuming that during such transitions people already need to adapt their behavioural routines and are thus more receptive to interventions.
Abstract: Strategies for motivating households towards sustainable consumption are confronted with the challenge of addressing seldom-reflected-upon routines, which cannot easily be changed. We investigate whether life-course transitions can serve as starting point for sustainable consumption interventions, assuming that during such transitions people already need to adapt their behavioural routines and are thus more receptive to interventions. The effects of two different campaigns (information mailing and personal consultation) were evaluated for people experiencing two different kinds of life events (childbirth and relocation). The experimental study found that the consultation campaign had significant effects on sustainable consumption concerning some of the focussed on behaviours, but did not have greater effects on the life-events groups. Mailing of information did not result in significant behavioural changes. To get a clearer picture about the impact of life-course transitions on everyday routines and susceptibility to interventions, additional qualitative interviews were carried out. The results indicate that everyday routines and consumption patterns change during life-course transitions, but with heterogeneous results regarding sustainability. The interviews revealed that the preparation phase preceding life events and a rather short period after them are decisive for changes in routine. Tentative explanations for the low impact of the consultation campaign on the persons in life-course transition are that the campaign addressed the target groups too late and that its design was not specifically adapted to these target groups.
156 citations
TL;DR: In this article, the authors examined the moderating effect of the brand on organic label effects and found that, depending on brand equity, the marginal effect of organic labeling information in terms of perceived product quality varies.
Abstract: An organic label offers a market signal for producers of organic food products. In Western economies, the label has gained high recognition, but organic food still represents a small part of total food consumption, which raises questions about the label's efficacy. By considering organic labels as a signal of quality for consumers, this article studies how this signal interacts with brand signals when both are visible to consumers, applying a cobranding framework. This research examines the moderating effect of the brand on organic label effects. In a 2 × 2 experimental design using real consumers (N = 122) in a shopping context, it found that, depending on brand equity, the marginal effect of organic labelling information in terms of perceived product quality varies. In particular, when brand equity is high (low), the organic label appears less (more) effective. However, regardless of the brand equity level, an organic label makes the environmentally friendly attribute salient, which has a positive impact on perceived quality. Pertinent implications for marketing and public policy are discussed.
131 citations
TL;DR: In this paper, a discursive, practice-based perspective on explaining the knowledge-to-action gap observed in the consumer policy literature on sustainable consumption is presented, which can be attributed to the discursive confusion that arises from a simultaneous existence of multiple, continuously changing and partly clashing discourses of sustainable consumption as well as the associated discursive struggle that consumers need to deal with when trying to make sense of their roles and responsibilities in sustainable development.
Abstract: This paper works towards a discursive, practice-based perspective on explaining the “knowledge-to-action” gap observed in the consumer policy literature on sustainable consumption. Based on an empirical study that focuses on fashion and clothing markets, the objective is to elaborate on the nature and implications of the discursive polyphony that consumers face when striving for more sustainable consumption practices. Overall, it is concluded that part of the gap can be attributed to the discursive confusion that arises from a simultaneous existence of multiple, continuously changing and partly clashing discourses of sustainable consumption as well as the associated discursive struggle that consumers need to deal with when trying to make sense of their roles and responsibilities in sustainable development.
96 citations
TL;DR: In this article, the authors analyse an attempt to promote sustainable consumption by shaping the conditions for consumption, focusing on sustainable public catering as an approach to shaping both the supply of and demand for sustainable meals.
Abstract: The aim of this article was to analyse an attempt to promote sustainable consumption by shaping the conditions for consumption. In particular, the focus lies on sustainable public catering as an approach to shaping both the supply of and demand for sustainable meals. In order to capture the processes of governing consumption, the way is traced in which rationalities (ways of thinking and calculating), technologies (means and instruments), visibilities (concrete manifestations), and identities (types of agents assumed) related to a policy intervention for sustainable public catering are interpreted and recreated by three main groups of actors involved: policy makers, catering professionals, and consumers. This analysis highlights the active role of practitioners in realizing policies for sustainable consumption. It has implications for policy makers and analysts: Reflexive policies should heed to actors’ unfolding interpretations as they can take the policy process in different directions.
66 citations
TL;DR: The Journal of Consumer Policy published a special issue on sustainable consumption in 2011 as discussed by the authors, focusing on the different relevant actors (consumers, business, government, and NGOs) putting sustainable consumption into practice.
Abstract: In March 2011, the Journal of Consumer Policy published a special issue on sustainable consumption. The main focus of that issue was on how the different relevant actors (consumers, business, government, and NGOs) are “putting sustainable consumption into practice” (Schrader and Thogersen 2011). That issue continued a row of special issues on sustainable consumption (and production) in 2010 by the Journal of Industrial Ecology (in January/February, edited by Arnold Tukker, Maurie J. Cohen, Klaus Hubacek, and Oksana Mont), the Natural Resources Forum (in February, edited by David Le Blanc), the Journal of Macromarketing (June, edited byWilliam E. Kilbourne), and the Journal of Consumer Behaviour (November/December, edited by Iain Black). The calls for these special issues were well received in the research community and so were the published articles. This, together with the ending of a number of large research projects on sustainable consumption in 2011, convinced the editors of the Journal of Consumer Policy that they should once more support the development of this fertile research field by offering space for another special issue on sustainable consumption, just 1 year after the previous one. The backcloth of the stream of research reported in these special issues is a shared understanding that changes in consumer behaviour are crucial if we are to move to a sustainable development path. Research has shown ways through which it might be possible to fulfil consumers’ needs without harming the ecological, social, and economic well-being of people today and in the future. However, the prevailing consumption patterns in modern societies are still far from being sustainable (EEA 2010). For example, the Global Footprint Network has calculated that it takes the Earth 1 year and 6 months to regenerate what we currently use in a year (Pollard et al. 2010). The imminent J Consum Policy (2012) 35:1–5 DOI 10.1007/s10603-012-9188-7
66 citations
TL;DR: In this paper, a cost accuracy estimation experiment reveals that disclosing annual energy operating costs for the product category of televisions might risk assisting consumers in realising that the possible energy operating cost savings fall below initial estimates.
Abstract: Consumers frequently act contrary to rational economic theory by overvaluing an initially higher purchase price while heavily discounting future energy operating costs. One opportunity to help limit the scale of over-discounting is to fully disclose the energy consumption of a product, e.g., by means of an energy label. However, not only the availability of information, but also the way in which specific information about the energy consumption is framed, is likely to affect how individuals discount future operating costs. A cost accuracy estimation experiment reveals that disclosing annual energy operating costs for the product category of televisions might risk assisting consumers in realising that the possible energy operating cost savings fall below initial estimates. A subsequent choice-based conjoint experiment shows that disclosing annual energy operating costs thus affects consumers by causing them to discount future energy operating costs of a television more heavily than when the information is disclosed in the form of “watts.” Owing to the power of the reversed “pennies-a-day” effect, disclosing lifetime energy operating cost information, however, proves to be most effective in guiding consumers towards more energy-efficient shopping behaviour. Implications for consumer policy and suggestions for future research are discussed.
65 citations
TL;DR: In this paper, the authors introduce a conceptionalization of carrotmobs that takes into account the perspective of the three relevant parties: activists, companies, and consumers, and highlight the consumer perspective, discussing different views on consumer power and the motivation to participate in a carrotmob.
Abstract: A new form of ethical consumption has recently evolved: The carrotmob. As in a flashmob, consumers collectively swarm a specific store and purchase its goods in order to reward corporate socially responsible behaviour. The present paper introduces a conceptionalization of carrotmobs that takes into account the perspective of the three relevant parties: activists, companies, and consumers. First, the paper considers activists’ objectives in initiating such a social movement. It describes how they use guerrilla tactics to foster the participation of companies and consumers. Second, the paper considers the perspective of the target company, stressing the role of corporate social responsibility and describing how companies compete in an auction to become the carrotmob target. Third, the paper highlights the consumer perspective, discussing different views on consumer power and the motivation to participate in a carrotmob. The paper also points out directions for further empirical research for each of these three perspectives.
60 citations
TL;DR: In this paper, the authors examined the use of avoidant coping strategies following buying lapses and relate them with dispositional self-conscious emotions, and they found that the avoidance strategies were positively influenced by shame-proneness, and this effect would be partially mediated by compulsive buying.
Abstract: Although compulsive buying is understood as an attempt to deal with chronic negative affect, the role of self-conscious emotions has not been explicitly theorized nor empirically examined. One objective of this manuscript was to fill this gap by integrating the escape theory account of compulsive buying with the psychological literature on negative self-conscious emotions. Specifically, shame-proneness was posited to be an important risk factor of compulsive buying severity. Another objective of this study was to examine the use of avoidant coping strategies following buying lapses and relate them with dispositional self-conscious emotions. Specifically, it was hypothesized that the use of avoidant coping strategies following buying lapses would be positively influenced by shame-proneness, and that this effect would be partially mediated by compulsive buying. These hypotheses received strong support from two studies, in which compulsive buying was assessed with different self-report instruments.
TL;DR: In this article, the authors examine the role of social enterprises in providing fair services to vulnerable consumers, focusing on the vulnerability of low-income consumers to high-cost exploitative credit as a result of a lack of access to mainstream financial services.
Abstract: This article examines the role of social enterprises in providing fair services to vulnerable consumers, focusing on the vulnerability of low-income consumers to high-cost exploitative credit as a result of a lack of access to mainstream financial services. It will be argued that both the state and the corporate sector have a role to play in providing the means with which vulnerable consumers can overcome financial exclusion, through access to fair services. However, this cannot and should not be achieved through increased welfare provision or through reliance on corporate social responsibility initiatives alone. In rejecting solutions focused on increased welfare or voluntary corporate social responsibility initiatives, this article suggests that regulatory support for the development and growth of social enterprises, such as community development finance institutions, will most effectively give rise to a social framework in which vulnerability and unequal opportunity with respect to financial services is addressed.
TL;DR: In this article, the authors examine experience in European consumer insolvency systems, based on the modest empirical studies of existing systems, primarily England, France and Germany, and chart distinct national approaches and outlines common themes and objectives for consumer insolventcy in the context of EU measures to create an integrated credit market in a "competitive social market".
Abstract: Many EU countries introduced debt adjustment systems as a response to the growth of over-indebtedness since the 1980s. These systems, originally introduced in many countries as crisis measures, have now become normalized, metamorphosing through a continuing learning process into a combination of debt adjustment and insolvency relief through a discharge of debt, sometimes after only 1 year, but often after a debt repayment plan over a period of 3–7 years. Since the early 2000s, new Member States of the EU have also introduced insolvency systems, often based on models from the old states. This paper examines experience in European consumer insolvency systems, based on the modest empirical studies of existing systems, primarily England, France and Germany. It discusses the reasons for the use of consumer insolvency, and the limited data on the characteristics of users, charts distinct national approaches and outlines common themes and objectives for consumer insolvency in the context of EU measures to create an integrated credit market in a “competitive social market. To economy”. It concludes by underlining the absence of systematic social science knowledge on existing systems and outlines areas for further research.
TL;DR: In this article, the authors argue that the shift in paradigm does not set aside the need to strive for legal rules that cover the weakest in the society, and that the weak consumer is not the one who is needed for the completion of the Internal Market.
Abstract: Consumer law started in the 1960s and 1970s as consumer protection law, meant to compensate for the risks and deficiencies of the consumption society which led to an enormous increase. The target of the first generation of national consumer law was the weak consumers, those who could not cope with the increased choice and the resulting risks. The argument here presented is that the European Union by taking over consumer legislation gradually but steadily changed the outlook, from consumer protection law into consumer law. The weak consumer is not the one who is needed for the completion of the Internal Market. This is the famous average consumer which governs today’s’ normative design of the consumer law making and enforcement. However, the shift in paradigm does not set aside the need to strive for legal rules that cover the weakest in the society.
TL;DR: In this paper, the authors argue that even in the absence of a European Union law instrument, the Member States should recognize debt adjustment judgments made in another Member State and that there is a need for a regulation in the European Union Law in this field.
Abstract: Consumer credit, as an important aspect of the free movement of capital, has for a long time now been subject to European Union regulations. However, one important aspect of consumer credit, over-indebtedness, has not been acknowledged in the Consumer Credit directives of 1978 and 2009, nor is there any other European Union law instrument that addresses over-indebtedness or insolvency of consumers. The only European-level document addressing the problem of over-indebtedness of ordinary people is the Council of Europe Recommendation of 2007. In European Union law, over-indebtedness can and should be approached from several angles. The Insolvency Regulation (2000) does not directly address situations facing the consumer debtor and leaves it up to the discretion of the Member States to include or exclude insolvency proceedings for consumer debtors regarding the scope of the Regulation. There can be little doubt that the European Union has a legal basis for action in this field, and it has also used its competence in a number of related issues, such as general insolvency law and enforcement of judgments. Case C-461/11, in which Advocate General delivered her opinion on Sept 13th, 2012 shows that national insolvency procedures for natural persons may constitute a restriction on the freedom of movement. This article argues that, even in the absence of a European Union law instrument, the Member States should recognize debt adjustment judgments made in another Member State and that there is a need for a regulation in the European Union law in this field.
TL;DR: In this paper, the economic model of Internet comparison sites (ICSs) is changed from a two-sided platform to a one-sided one to solve the problem that consumers do not trust ICSs because of concerns about commission biases and lack of full market coverage.
Abstract: In today's information society, there is such a large amount of available information about any given good or service that consumers are unable to make an informed choice. Internet comparison sites (ICSs) could provide a solution to this problem by comparing markets for consumers and making a comprehensive recommendation. However, currently, they are not fully effective for consumers. Consumers do not trust ICSs because of concerns about commission biases and lack of full market coverage. To be fully effective, ICSs also ought to cover non-price dimensions such as product quality and after-sales service. Changing the economic model from the current two-sided platform to a one-sided platform could solve these problems. In order for this to occur, changes or clarifications to existing EU consumer laws might need to be made.
TL;DR: In this paper, the authors propose different approaches to balance the interests of debtors and creditors by normative means in consumer insolvency tourism, i.e., the relocation of over-indebted natural persons into a Member State granting a more favourable discharge regime from personal debt than the home country.
Abstract: Consumer insolvency tourism, i.e., the relocation of over-indebted natural persons into a Member State granting a more favourable discharge regime from personal debt than the home country, has been focused by media as well as by legal practitioners quite intensively lately. Conflicts arise not only in distinguishing genuine and fictional relocations of the centre of main interest (COMI), but also between the effect of discharge and creditor's perspectives who did not take into account the possibility of considerably more debtor-friendly discharge facilities abroad when issuing the credit. While relocating a corporate COMI to another Member State providing better restructuring conditions will generally benefit both creditor and debtor, the effect of discharge in consumer insolvency procedures leads to less balanced results. It is not controversial that the current practice is in accordance with the wording of the European Insolvency Regulation (EIR). However, little research has been done so far on the question whether the phenomenon itself has been endorsed by the EIR. Even if consumer insolvency tourism is generally not regarded as an abuse of the EIR or of European freedoms, it may still not respect the interests of both debtors and creditors appropriately. With regard to the prospective revision of the EIR, this paper proposes different approaches to balance the interests of debtors and creditors by normative means.
TL;DR: In some countries like Bulgaria, Italy, Croatia, Lithuania, and Poland, there are no consumer bankruptcy procedures which provide for an exemption from residual debt as mentioned in this paper, and the differences in the level of protection entices insolvency tourism, which is open only to those consumers who have remaining resources and who are capable of engaging in the organization of transborder debt relief.
Abstract: The economic crisis has fueled the debate on regulated state insolvencies. While debt relief is being considered for some states, citizens in some cases live their whole lives in debt. In some countries like Bulgaria, Italy, Croatia, Lithuania, and Poland, there are no consumer bankruptcy procedures which provide for an exemption from residual debt. In Spain, private debtors are entitled to debt relief on a maximum of only 50% of their debt and in other countries long periods of differing lengths are needed until complete exemption from remaining debt is granted. The length of time that information in which the publication of consumer bankruptcy notifications in public or private registers can be published also varies. There are thus no uniform regulations on how private individuals can make a clean financial start in Europe, and debtors and creditors have different opportunities. The differences in the level of protection entices insolvency tourism, which, however, is open only to those consumers who have remaining resources and who are capable of engaging in the organization of transborder debt relief. Poorer consumers are dependent on their national insolvency regime, if indeed there is any. The European legislator has done next to nothing to get to grips with over-indebtedness from a European perspective. So far, the European approach is limited to opening up consumer credit markets. The whole EU rhetoric is very much based on the idea that consumer credit is a source of income which could and should be used. The official documents might be read so as to entice consumers and credit institutions in particular in countries with a low total number of credits to engage in credit transactions. The dark side of consumer credit, i.e., delayed payments, the percentage of interest rates, compound interests, indebtedness, over-indebtedness, or insolvency, has not gained much attention at the EU level. To be sure, there are policy recommendations to fight social exclusion, and there are also more specific recommendations related to consumer over-indebtedness. However, none of these initiatives has led to concrete regulatory steps aimed at closing the gap between intensive regulatory attempts to open up the credit market and the social consequences in circumstances where the consumer is unable to satisfy a creditor. This is all the more J Consum Policy (2012) 35:417–419 DOI 10.1007/s10603-012-9213-x
TL;DR: In this paper, the authors argue that three strategies that have contributed to keeping levels of credit default low: reliance on savings, financial support from relatives and friends, and cuts in household expenses are near to collapse and consequently the levels of consumer default will rise steeply in the next years.
Abstract: Portugal ranks among the EU27 countries with higher levels of consumer indebtedness. Contrary to the trend observed in countries with similar indebtedness rates, Portugal has one of the lowest rates of consumer default. Previous studies (e.g., Frade et al. 2006) have identified three strategies that have contributed to keep levels of credit default low: reliance on savings, financial support from relatives and friends, and cuts in household expenses. These strategies have been widely used for the last decade and have been strained since the very beginning of the global financial crisis in 2007. We argue that these three strategies are near to collapse and consequently the levels of consumer default will rise steeply in the next years. The savings rate in Portugal has been declining over time, and the social networks are limited in their action due to the current crisis that affects everyone. In this article, we advance the hypothesis that sacrificing living standards is rooted on collective beliefs about the current economic crisis in Portugal and trust in political and market agents in line with the Theory of Market Anomie (Karstedt and Farrall 2006). The conclusions are based on macroeconomic statistics and on the results of a Web survey of 1244 Portuguese households, which focuses on attitudes towards the financial crisis, trust in political and economic institutions, and strategies to cope with the crisis. The results show that trust in financial companies (banks and insurance companies) and in the European Parliament promotes a sense of empowerment to contribute to the country economic restoration. This attitude induces citizens to avoid default by sacrificing living standards. But in the current austerity context, with low levels of trust in political institutions and detachment of the economy, consumers will be less prone to sacrifice. In this scenario, credit default and insolvency is expected to rise especially in those households most exposed to unemployment and to cuts in social benefits. This reality puts a huge and growing pressure on bankruptcy procedure, civil courts, and economic and social policies. Some adjustments should be made to the Portuguese Bankruptcy Code by facilitating and simplifying the bankruptcy regime in order to accommodate the increase in insolvency cases. But the improvement of the insolvency procedure will not resolve the situation of financial distress if the structural causes persist, such as unemployment and deterioration of salaries, and cuts in social benefits. A reform of the Bankruptcy Code facilitating and simplifying the bankruptcy regime should be coupled with measures that boost the economy and stimulate the labour market. Otherwise, Portuguese households will not have the resources necessary to benefit from the bankruptcy process and regain the control over their financial lives.
TL;DR: In this article, the authors argue that consumers generally do not have a sufficient level of financial literacy in order to make informed, rational decisions and that behavioural biases have a distorting influence on consumer decision making.
Abstract: Examples of financial mistakes made by consumers lend support to the view that systematic mistakes of consumers exist in the EU credit market and that service providers respond strategically to these by redesigning their products. This paper seeks to determine how existing regulation can be improved to ensure consumer protection. Using insights from behavioural economics, this paper argues that financial literacy—that is, knowledge and understanding of complex financial products and skills to navigate the financial market—as a cornerstone for European financial consumer law is problematic. Current regulation is based primarily on information provision to consumers, which should enable them to make appropriate decisions about the risks and suitability of financial products. Although behavioural economics does not necessarily require legal intervention to take other forms than the introduction of information duties, the type of intervention is dependent on the design and needs of a particular market. The EU consumer credit market, in our view, demands more than the current regulation offers in terms of consumer protection. In particular, behavioural studies reveal that consumers generally do not have a sufficient level of financial literacy in order to enable them to make informed, rational decisions. Moreover, behavioural biases have a distorting influence on consumer decision making. The law as it stands, therefore, seems ill-equipped to offer protection to consumers and to prevent them from rash and bad decision making. Reviewing existing regulation and case law, we propose that in the EU law, the Consumer Credit Directive and the Markets in Financial Instruments Directive require updating in order to offer sufficient protection to vulnerable groups of consumers who, on average, have low levels of financial literacy.
TL;DR: In 2009, the German parliament approved a specific regulation under the Data Protection Act on scoring which came into effect on 1 April 2010 as mentioned in this paper, which set standards for scoring and granted transparency rights to consumers.
Abstract: Data protection has become an increasingly important aspect of consumer policy in recent years in Germany. One of the most interesting subjects under discussion was that of scoring. Scoring attempts to give a prognosis as to whether a consumer is willing and able to repay a given kind of credit. While the USA already had specific regulations on scoring, there was no such equivalent in Germany, especially with regard to consumer rights on transparency. In 2009, the German parliament approved a specific regulation under the Data Protection Act on scoring which came into effect on 1 April 2010. This new law set standards for scoring and granted transparency rights to consumers. One of the effects has been that large numbers of consumers have since availed of these new rights and addressed scoring agencies in order to receive information on their scores.
TL;DR: In this paper, the effectiveness of the Consumer Protection Cooperation Network (also known as "CPC Network") for consumer protection in cross-border disputes in the European Union (EU) is discussed.
Abstract: Central to this paper is the aim to discuss the effectiveness of the Consumer Protection Cooperation Network (also known as “CPC Network”) for consumer protection in cross-border disputes in the European Union (EU). In doing so, this paper deals with the literature about networks established by grouping the Commission and national authorities to enforce European Law. The examples of the European Competition Network and the CPC Network are interesting because they raise questions with regard to the effectiveness and the accountability of emerging network-based law enforcement. The development of the CPC Network may have relevant implications for other areas of EU law and policy, including the question whether network-based governance could be transposed in other fields of EU Law.
TL;DR: In this paper, the authors propose a merger of the fields of debt relief and debt collection, with a pivotal role for independent trustees, and suggest a new-chance approach has dramatically changed the playing field amongst debtors and creditors.
Abstract: Since the 1990s, each Member State of the European Union designed a policy that infused the liberal American fresh start policy into its own social institutions and legal culture. Especially in countries with a civil law tradition, the legal position of the consumer has improved. The paradigm of lifelong liability of debts has been replaced by a form of limited liability. Discharge of debts has established itself as a firm legal principle in all European jurisdictions. In most European countries, the new approach consists of a combination of legal and extrajudicial instruments. Under the umbrella of the courts, social workers, trustees, and administrators perform a broad range of activities in monitoring and helping debtors. The so-called new-chance approach has dramatically changed the playing field amongst debtors and creditors. The new legal equilibrium worked rather well in most European countries in the 1990s and 2000s. However, the systems are obviously far from perfect as almost all European governments are still fine-tuning their laws. Recently, two innovations have appeared on the European stage: Some Nordic countries have opted for a centralized state-controlled enforcement system, while in the UK, commercial debt management plans were developed, mainly by commercial suppliers. In 2005, the US Bankruptcy Code was changed in favour of the creditors. The 2008 credit crunch and its aftermath present a window of opportunity for the next step in the modernization of debt enforcement policy. I will suggest a merger of the fields of debt relief and debt collection, with a pivotal role for independent trustees.
TL;DR: In this paper, the distributional effects of a price decrease on food consumption in Sweden were investigated based on a simple model of household utility, and the households demand for food was derived and estimated.
Abstract: Controlling for differences in taxes and transportation costs, the Nordic Competition Authorities claims, in a report from 2005, that food prices are 11% higher in Sweden compared to the EU-15 countries. One explanation for this put forward in the report is the limited competition on this market which suggests there to be a potential for lower food prices. This paper focuses on distributional effects of a price decrease on food. Based on a simple model of household utility, the households demand for food is derived and estimated. Price and income elasticities for different income groups are then calculated based on these parameter estimates. Our results suggest that food is a normal good with an average income elasticity of approximately 0.18 and a price elasticity of 0.45. In addition, and of importance from a policy perspective, the results indicate the income elasticity to differ across income groups while price elasticities are constant.
TL;DR: The right to safety is to be protected against the marketing of goods which are hazardous to health or life, and the right to choose is to have access to a variety of products and services at competitive prices as discussed by the authors.
Abstract: “(1) The right to safety—to be protected against the marketing of goods which are hazardous to health or life. (2) The right to be informed—to be protected against fraudulent, deceitful, or grossly misleading information, advertising, labelling, or other practices, and to be given the facts he needs to make an informed choice. (3) The right to choose—to be assured, wherever possible, access to a variety of products and services at competitive prices; and in those industries in which competition is not workable and Government regulation is substituted, an assurance of satisfactory quality and service at fair prices. J Consum Policy (2012) 35:165–173 DOI 10.1007/s10603-012-9190-0
TL;DR: In this paper, the authors identify several situational factors, including the information available to the consumer, the promotional environment, and a customer's trade-in, that may have an impact on the bargaining outcome.
Abstract: Many large ticket items, such as cars and real estate, involve extensive bargaining on the part of consumers. From a consumer protection perspective, it is thus important to understand the determinants of bargaining outcomes and identify ways in which consumers can improve their bargaining performance. This research identifies several situational factors, including the information available to the consumer, the promotional environment, and a customer’s trade-in, that may have an impact on the bargaining outcome. A unique dataset is created from the US automobile market that combines actual vehicle transaction data with survey data on buyer search and bargaining behaviour. The results show that these situational variables indeed have an impact on the price a consumer pays. Specifically, on average, consumers who used the Internet and those that were offered a manufacturer rebate saved $481 and $2,126, respectively, while consumers who traded-in their old vehicle ended up paying $159 more on the new car compared to consumers who did not trade-in. Interestingly, the impact of some of these situational variables differed depending on the consumers’ ability to bargain and their enjoyment of bargaining. For example, high ability bargainers achieved more price reductions than low ability bargainers, given more information and a more active promotional environment, but this advantage did not extend in overcoming the negative impact of a trade-in. On the other hand, while buyers who enjoy bargaining do not possess a better position in a bargaining situation, they have greater tendency to search for price information and thus are better at identifying suppliers that offer a lower initial price. From a policy perspective, these results suggest that information search should be encouraged and made easier, particularly for consumers who dislike bargaining. Furthermore, even if some consumers have a high bargaining ability, there are still circumstances where their ability to get a lower price is limited. Education that highlights these pitfalls is likely to improve the final bargaining outcome and thus enhance consumer welfare.
TL;DR: In this paper, the authors examined the reasons for the rebound in the saving rate by undertaking a new examination of the determinants of household saving and found support for an inverse relationship between the personal saving rate and the return to home equity.
Abstract: The “Great Recession” of 2007–2009 (Rampell 2009) had a devastating impact on personal finances, causing households to retrench by limiting spending and reducing indebtedness. One positive outcome—evaluated by some—has been a rise in the widely cited “personal saving rate” from historic lows set in the middle of the decade. This paper evaluates the reasons for the rebound in the saving rate by undertaking a new examination of the determinants of household saving. Extending previous work and making use of data inclusive of the turbulent 2000s decade, the analysis finds support for an inverse relationship between the personal saving rate and the return to home equity. New in the research is a similar finding of an inverse relationship between the personal saving rate and the return to household investment in human capital. The results are used to make alternative forecasts of the personal saving rate through 2020. The path of the household human capital return is found to be a key determinant of these forecasts.
Journal Article•
TL;DR: The findings suggest that “report cards” comparing hospital quality will be used by only a subset of consumers and there is broader support for the idea that consumers who care about the attributes of the hospital—reputation, medical services, and amenities—have higher values for information sources.
Abstract: This study tests whether the Hirshleifer–Riley (HR) model predicts the values of information sources for a future hospital admission. The main testable prediction of that model concerns the values of information sources for those who intend to choose the same hospital again and those who intend to choose a different hospital. Satisfaction with the prior choice should be negatively correlated with the values of information sources for intentional “stayers,” but positively correlated with the values of information sources for intentional “switchers.” The authors had a dataset comprising a sample of employees and spouses at a large employer who had been hospitalized during the past year. Respondents were asked to name the hospital(s) they would consider for a future overnight stay, as well as the values of three information sources: their physician’s recommendation, family or friends’ recommendation, and quality ratings comparing hospitals in the community. Analysis of the responses showed that moderately and highly satisfied consumers who intend to use the same hospital have lower values of quality ratings and that moderately and highly satisfied consumers who intend to switch hospitals have weakly significant, higher values of a physician’s recommendation. Otherwise, the HR model’s predictions are not supported. There is broader support for the idea that consumers who care about the attributes of the hospital—reputation, medical services, and amenities—have higher values for information sources. The findings suggest that “report cards” comparing hospital quality will be used by only a subset of consumers.
TL;DR: In Germany, private insolvency law in Germany paralyses the ambitious entrepreneurial powers of clients who want to heal the conflict as mentioned in this paper, and a better outcome for creditors and debtors is made possible.
Abstract: Private insolvency law in Germany paralyses the ambitious entrepreneurial powers of clients who want to heal the conflict. A better outcome for creditors and debtors is made possible.