The Relationship between Consumption and CO2 Emissions: Evidence for Portugal

This paper establishes an empirical relationship between CO2 emissions from burning fossil fuels and household consumption of nondurable goods and services. Using a typical life cycle-permanent income hypothesis framework, we reject the hypothesis that inclusion of CO2 emissions in the consumption function is not supported by the data. Furthermore, our results suggest the existence of a distaste effect or negative state dependence effect. This result has important policy implications as it suggests that decarbonizing the economy would ultimately stimulate household consumption. Our results also have implications for both the cyclical behavior and the smoothing process of consumption, which depend on the branch of the environmental Kuznets curve that the country is on as well as on the prevalence of intertemporal dependent preferences.

INFLUENCE OF INVESTMENT DECISIONS AND CONSUMPTION ON ASSET PRICING: CCAPM APPROACH

Purpose of the study: This study examines the influence of investment decisions and consumption on asset pricing from 1980 to 2016. Methodology: This study has used a quantitative research design and a secondary source is deployed to collect data from 1980 to 2016. The data was gathered from Saint Louis Fed, whereas Standard and Poor’s 500 (S&P 500 index at a closing price of the first day of the month) was from Yahoo Finance. The software used for the data analysis was R Studio and statistical methods such as descriptive statistics, Generalized Method of Moments (GMM) model Fitting and Consumption Capital Asset Pricing Model (CCAPM) Fitting was performed to examine the influence of investment decisions and consumption on asset pricing. Main Findings: The finding of the study shows that Personal Consumption Expenditures: Nondurable Goods (PCE): Nondurable goods, (PCEN) and 1-Year Treasury Constant Maturity Rate (GS1) jointly accounted for about 7.9% of the variance observable in excess return SP500. Furthermore, independently, GS1 (annualized 1-Year Treasury Constant Maturity Rate) was significant while PCE (Personal Consumption Expenditures: Nondurable Goods) and PCEN: Nondurable goods were insignificant. The implication of the Study: The current study is useful for investors and especially fund managers across the globe to determine what return they expect on their investment for putting their capital at risk on it. Novelty/Originality of this study: Studies have been conducted to analyze the impact of investment decision based on the CAPM model, whereas this study introduces the influence of investment decisions and consumption on asset pricing by deploying the CCAPM approach which is an extension of the capital asset pricing model that uses a consumption beta instead of a market beta to explain expected return premiums over the risk-free rate.

Pursuing premium: comparing pre-owned versus new durable markets

Purpose The purpose of this paper is to investigate whether consumers in pre-owned durable goods markets (such as pre-owned automobiles) purchase products with higher premium/luxury positioning in a vertical line-up compared to consumers in new durable goods markets. The moderating role of brand loyalty on choice is also investigated. Design/methodology/approach The hypotheses are tested using a data set that includes the sales of new and pre-owned vehicles from an independently owned automotive dealer in the Northwestern USA during the first nine months of 2017 (N = 200). An ordered logit regression is used to estimate the relationship between consumers’ purchase of pre-owned vs new vehicles and the premium-level of the model that they choose, while controlling for the vehicle price. Two experimental robustness tests are conducted to provide empirical evidence of the proposed theoretical process. Findings Consumers who purchased pre-owned vehicles chose models with higher premium/luxury positioning compared to consumers who purchased new vehicles, even when controlling for price. This effect was moderated by brand loyalty, such that consumers’ premium-level of purchase was magnified if they previously owned a vehicle of the same brand. The results of an experimental robustness test indicated that consumers’ preference for pre-owned vehicles with higher premium/luxury positioning was because of greater perceptions of the quality along the dimensions of versatility, performance and prestige. Practical implications Sellers of complex durable goods (e.g. automobiles) should consider segmenting their upselling strategies for pre-owned vs new products. They should specifically focus more effort on the upselling of pre-owned durables as buyers appear more likely to pursue premium/luxury alternatives compared to new durables. Further, they should focus upselling efforts for pre-owned durables on brand loyal consumers. Originality/value To the best of the authors’ knowledge, this work is the first to examine consumers’ desire for pre-owned durable goods with premium/luxury positioning in a vertical product line-up. Further, it is also the first to explore the role of brand loyalty in shaping consumer preferences for premium/luxury pre-owned durable goods. As such, it makes an important contribution to an emerging literature exploring the appeal of premium and luxury pre-owned goods. Much work in this area has focused on the motivations that consumers have for buying pre-owned premium and luxury nondurable goods, such as vintage clothing or accessories. By contrast, the present research investigates the appeal of premium/luxury positioning for complex, pre-owned durable goods (vehicles), which are more difficult for consumers to evaluate at the point-of-purchase.

Exchange Rates and Prices: Evidence from the 2015 Swiss Franc Appreciation

We dissect the impact of a large and sudden exchange rate appreciation on Swiss border import prices, retail prices, and consumer expenditures on domestic and imported nondurable goods, following the removal of the EUR/CHF floor in January 2015. Cross-sectional variation in border price changes by currency of invoicing carries over to consumer prices and allocations, impacting retail prices of imports and competing domestic goods, as well as import expenditures. We provide measures of the sensitivity of retail import prices to border prices and the sensitivity of import shares to relative prices, which is higher when using retail prices than border prices. (JEL E21, E31, F14, F31, L11)

On the welfare cost of consumption fluctuations in the presence of memorable goods

We propose a new category of consumption goods, memorable goods, that generate a utility flow even after physical consumption. Empirically, memorable goods expenditures exhibit frequent zero monthly purchases and lumpy expenditure spikes. Memorable goods expenditures are 20% the size of nondurable expenditures, but three times as volatile. We then develop a consumption‐savings model with borrowing constraints and income risk that formalizes the notion of memorable goods and distinguishes them from other nondurable goods. We show that consumers optimally choose lumpy consumption of memorable goods. We then measure the welfare cost of consumption fluctuations using our calibrated model and empirically evaluate our calibrated model's predictions for the consumption response to predictable income changes. We find that the welfare cost of household‐level consumption fluctuations induced by income shocks fall from 20.4 to 12.3 percentage points if memorable goods are accounted for, and that empirical estimates of excess sensitivity of consumption may significantly be driven by memorable goods expenditures.

Consumer Buying Behavior for Nondurable Goods

The aims of the study is to analyse consumer buying behavior for non-durable goods. Descriptive and causal research design was used. Structure questionnaires were administered to gather responses. Measurement instrument is based on five point Likert scale. The study confirmed perceived quality influence on consumer purchase decision. There were no significance differences on consumer purchase decision regarding age and income level of respondents.

Consumer Buying Behavior for Nondurable Goods

The aims of the study is to analyse consumer buying behavior for non-durable goods. Descriptive and causal research design was used. Structure questionnaires were administered to gather responses. Measurement instrument is based on five point Likert scale. The study confirmed perceived quality influence on consumer purchase decision. There were no significance differences on consumer purchase decision regarding age and income level of respondents.

CONSUMER DEMAND, CONSUMPTION, AND ASSET PRICING: AN INTEGRATED ANALYSIS WITH INTERTEMPORAL TWO-STAGE BUDGETING

This paper integrates seemingly disjoint studies on consumer behavior in micro and macroanalyses via an intertemporal two-stage budgeting procedure with durable goods and liquidity constraints. The model specifies an indirect utility function as a function of nondurable consumption, commodity (nondurables) prices, and durables stock, and derives the demand functions for nondurable goods. A demand function for durable goods is derived in an adjustment cost framework. The consumption growth equation accounts for relative price effects with precautionary saving, durables stock, and liquidity constraints. The stochastic discount factor is approximated by a time-varying linear function of nondurable consumption growth, commodity price growth, durables stock growth, and disposable income growth. The demand functions for six nondurable goods and services are jointly estimated with the Euler equations for bonds, stocks, and durable goods with allowance for liquidity constraints, using US data. Estimation provides new findings for intertemporal consumption and a multifactor consumption-based capital asset pricing model.

KINERJA SAHAM DURABLE GOODS DAN NONDURABLE GOODS MASA KRISIS FINANSIAL GLOBAL

The purpose of this research is to analyze the stock performance of “the durable goods” and “the nondurable goods” during global financial crisis of 2008. The amount of sample used is about 298 kinds of stocks with the data of individual stock index and coupon rate of government bond. The stock performance used Sharpe’s Model. The period of financial crisis divided into two periods: contraction period and recovery period. Hypothesis: (1) there are differences of stock performance between the durable goods and the nondurable goods during each of contraction period and recovery period; (2) there are differences of stock performance between recovery period and contraction period for each of durable goods and nondurable goods. The result of this research showed that: (1) the stock performance of durable goods is insignificantly different than nondurable goods neither for contraction nor recovery period; (2) the stock performance is significantly difference between contraction and recovery period for each of durable goods and nondurable goods. These result was consistant to prior research. Suggestion: the treatment policy of nondurable goods should be the same as durable goods during the contraction and recovery periods, when the global financial market shock occurred