Does Consumer Financial Management Behavior Relate to Their Financial Access? Abstract Financial management behavior and financial access are important to overall financial well-being, yet have not been well studied. This study contributes to the literature of financial access and financial management behavior by empirically exploring relevant factors for each and the relationship between them. The data are derived from the 2012 and 2015 National Financial Capacity Study. Exploratory factor analysis (EFA) was applied to derive the factors relevant for consumer financial access and consumer financial management behaviors. Confirmatory factor analysis (CFA) was applied to establish reliability and construct validity of the identified factors. The structural equation modeling and linear regression were jointly used to examine the relationship between them. Results suggest that consumer financial access consists of a nine-element structure: savings accounts, checking accounts, retirement accounts, retirement plans, emergency funds, homeownership, investments, credit, and health insurance. Financial management behavior consists of a five-element structure: consumption, cash management, emergency savings, small-dollar consumer loans, and credit management. Financial management behavior is significantly associated with financial access. Better consumer financial management behavior is associated with better financial access. Policy implications are discussed.

A Matter of Principle: Comparing Norm-Based Explanations for Fair Trade Consumption Abstract Research on fair trade consumption has proliferated in recent years. However, to date, systematic comparisons of the various theoretical models attempting to explain the purchase of fair trade products are rare. The present paper addresses this gap by comparing three theories which explain fair trade consumption by reference to a personal norm: The norm-activation model (NAM), the value-belief-norm (VBN) theory, and the value-identity-personal norm (VIP) model. Using data from a random sample of the general population in Zurich (Switzerland), the paper compares the explanatory power and the causal structures of these theories with structural equation models. The results show that the value-identity-personal norm (VIP) model explains the largest amount of variance in the purchase of fair trade products, followed by the value-belief-norm (VBN) theory. Furthermore, the analysis indicates that values influence the personal norm via specific beliefs (awareness of consequences and ascription of responsibility), as specified in VBN, as well as via the more general concept of an identity as a critical consumer, as hypothesized by VIP. In contrast, the results do not support the moderator-formulation of the NAM. The paper therefore concludes that VIP and VBN both represent valuable theories specifying complementary mechanisms for explaining fair trade consumption, whereas there is no evidence for the NAM as an explanation of fair trade consumption.

Improving Nutritional Quality of Consumers’ Food Purchases With Traffic-Lights Labels: An Experimental Analysis Abstract A laboratory experiment was conducted in France to evaluate the role of colour-coded traffic lights (TLs) in signalling the nutritional quality of food. The experimental protocol focused on participants’ willingness-to-pay (WTP) for breakfast cereals, and it precisely identified the impact of both TL appearance and additional explanations about these TLs. The results of this paper show a significant influence of both TL appearance and additional explanations on consumers’ WTP. Regarding the TL appearance, the red colour associated with a low nutritional quality of foods has a sustained impact compared to the impact of the green and yellow colours. In other words, the placement of TLs on all products mainly leads to a reduction in WTP for products with the red colour, although WTP for other products with the green or yellow colours also changes. Additional explanations about TLs and nutrition also matter because they significantly influence WTP. Based on the participants’ WTP, we estimate the welfare impact of mandatory TLs, suggesting that it would be socially optimal to introduce these mandatory TLs with additional explanations.

How Much Is Data Privacy Worth? A Preliminary Investigation Abstract Do consumers value data privacy? How much? In a survey of 2,416 Americans, we find that the median consumer is willing to pay just $5 per month to maintain data privacy (along specified dimensions), but would demand $80 to allow access to personal data. This is a “superendowment effect,” much higher than the 1:2 ratio often found between willingness to pay and willingness to accept. In addition, people demand significantly more money to allow access to personal data when primed that such data includes health-related data than when primed that such data includes demographic data. We analyze reasons for these disparities and offer some notations on their implications for theory and practice. A general theme is that because of a lack of information and behavioural biases, both willingness to pay and willingness to accept measures are highly unreliable guides to the welfare effects of retaining or giving up data privacy. Gertrude Stein’s comment about Oakland, California may hold for consumer valuations of data privacy: “There is no there there.” For guidance, policymakers should give little or no attention to either of those conventional measures of economic value, at least when steps are not taken to overcome deficits in information and behavioural biases.

Consumer Protection and the Regulation of Mobile Phone Contracts: A Study of Automatically Renewable Long-Term Contracts Across Jurisdictions Abstract This article deconstructs mobile phone contracts as an example of long-term contractual relations in four jurisdictions to reveal that there are three elements which define consumer protection. The elements are contract duration, renewal of the agreement and unilateral modification. Each of these factors are regulated differently in each of the jurisdictions, but, assessed collectively, similar levels of consumer protection are found. The authors show that the reason for the different weighting is determined by regulation (subject-specific or general); by external factors, such as technological development, geography or business considerations; and by wider cultural considerations. The comparison of these features across the jurisdictions shows that, ultimately, regulatory intervention plays little role in contract design, unless an overwhelming policy goal is pursued, which means that, in most cases, regulators would be advised to avoid or reduce regulation of mobile phone and other long-term contracts.

Nudged to a Menu Position: The Role of “I’m Loving It”! Abstract The position of food items on supermarket shelves or dishes on restaurant menus seems to influence consumers’ choices. However, it is still unclear which position is the most favourable, respectively which factor can explain the variety of different position effects observed (e.g., centre-stage effect). We assume that this factor is based on whether or not “your love” (or your preference) for the cuisine of the restaurant (e.g., Italian) where you have dinner plays a role regarding your dish choice or not. Hence, in a computer-based study, participants had to choose dishes, appetizers, entrées and desserts from menus whose cuisine they most (e.g., Italian) or least preferred (e.g., Japanese). We found that regarding the meal type entrées, preference indeed played a role. Regarding menus from their most preferred cuisine, participants chose significantly more often entrées positioned in the centre of the menu. No such effect could be found regarding menus from their least preferred cuisine. Regarding the meal type appetizer, preference did not seem to play a role; hence, participants did, regarding both preferences, choose more appetizers positioned at the top of the menu. Regarding desserts, no effects could be found. A developed theoretical framework tries to illustrate how preference comes into play, by changing the way the dishes within a meal type are perceived, and hence modulates the different position effects observed. The framework should provide choice architects with guidelines about where they could place healthier dishes on a menu to fight the current overweight and obesity crisis.

Book Notes “Economics and Social Sciences”

Disabled People’s Vulnerability in the European Single Market: The Case of Consumer Information Abstract The United Nations Convention on the Rights of Persons with Disabilities (2006) recognizes access to consumer goods and services in the mainstream private market as essential for full participation in the society. It shapes the concepts of consumer participation and market accessibility around the social model of disability and does not make a distinction between disabled and non-disabled market participants. Meanwhile, the European Union and Member States do not recognize people with impairments as equal market participants. They see them as “vulnerable” consumers and classify impairment as one of the criteria for becoming a “vulnerable” participant in the European single market. This paper argues, however, that by shaping policy and market positions and actions around ableism, the European Union, Member States, and the private market prioritize non-disabled citizens and consumers and so construct people with impairments’ consumer vulnerability. To illustrate the case, empirical evidence from mystery shopping and qualitative interviews with consumers with impairments from Lithuania and the UK is used. Since consumer information is essential for informed choice and participation in the market, information provision about mainstream retail outlets and products is used as a case study.

Awards

Cass R. Sunstein and Lucia A. Reisch: Trusting Nudges