Self-service versus human interaction in private consumption: The moderating role of brand personality

We explored how consumer attitudes toward service delivery types (self-service technology vs. face-to-face) differ in a private consumption context depending on the brand personality (underdog brand vs. top- dog brand). Using banking service (Study 1) and hotel service (Study 2) scenarios, we empirically investigated the interaction effects between service delivery types and brand personalities on consumer attitudes. The results indicate that for humanized underdog brands consumers showed a more positive attitude toward self-service technologies than toward face-to-face services. However, for the top-dog brands there were no significant moderation effects. Thus, when managers in the marketing field are planning to regulate new directions for their service policy, they need to be very cautious by considering both consumption context and brand personality. We have theoretically and practically expanded the existing literature on service delivery by focusing on private consumption services.

The Impact of the Ongoing Pandemic on Digital Finance Transactions: An Empirical Analysis

The ongoing pandemic has resulted in a disruption of the life of all citizens and impacted all the spheres, more so the financial system because the Pandemic and its aftermath has shut all economic activity except those which as per the government directives are considered the most essential. This has deeply impacted private consumption, external trade as well as investment in the economy. Accordingly, both in retail stores and e-commerce orders, a common strand is that many of the consumers are now paying bills via digital payment mechanisms and taking contactless delivery of goods wherever possible. “Digital financial transaction systems, e-wallets and apps, online transactions using e-banking, usage of Plastic money (Debit and Credit Cards), etc. have recorded a substantial increase in demand during the crisis”. The objective of the present paper is to examine and analyze the digital finance transactions in selected cities during the ongoing pandemic

Implications for Public Policy

The failure of higher private consumption to increase happiness significantly due to environmental disruption, relative competition, adaptation, our materialistic bias, etc. are relevant for public policy, especially in making higher public spending in the right areas like environmental protection, research, poverty elimination, etc. more welfare-improving than a ‘big society, small government’. Some soft paternalistic measures such as nudging people to save adequately for old age may also be needed in the widespread presence of imperfect rationality and foresight.

A Case for Higher Public Spending

Studies by psychologists, sociologists, and economists indicate that increases in incomes beyond a moderate level are not related to happiness nor significantly with the objective quality-of-life indicators (which increase with scientific and technological breakthroughs at the global level). Yet everyone wants more money. This may be explained by environmental disruption, relative-income effects, inadequate recognition of adaptation effects, and the materialistic bias due to our accumulation instinct and advertising. These factors cause a bias towards private consumption, making public spending, especially on research and environmental protection (with their long-term and global public-good nature) well below optimal. This is made worse by economists’ emphasis on the excess burden of taxation, ignoring the negative excess burden on the spending side. As Kaplow argues, if taxes are raised in accordance to the benefits of the funded public goods at the respective income levels, no disincentive effects are involved.

Empirical Evidence on Factors Conditioning the Turning Point of the Public Debt–Growth Relationship

This paper contributes to the limited literature on the factors conditioning the turning point of the public debt–growth relationship. A decade after the global financial crisis, when the debt ratio in many countries was still above pre-crisis levels, the COVID-19 pandemic again increased the pressure on public finances. It revived the debate on the ability to promote economic recovery through debt-financed government expenditure. However, more intense government borrowing increases its costs and uncertainty about future taxation policy, thus potentially disturbing private consumption, investment, and economic growth. In this paper, we estimate the thresholds of indicators on which the expenditure multiplier depends, which may already imply a risk that public debt will dampen economic growth. We use a methodology of structural threshold regression to examine the varying effects that debt might have on growth using consumption, investment, taxes, and imports as threshold variables, as well as several other factors suggested by previous contributions. The applied methodology allows for the addressing of parameter heterogeneity and endogeneity to be accounted for at the same time. The main results suggest that a positive debt effect is more likely if the conditions for a high expenditure multiplier are met, that an increase in the public-debt-to-GDP ratio is not necessarily deleterious to growth if shares of private consumption and investment in GDP are high, while the tax-revenue-to-GDP ratio is low.

Disaggregate income and wealth effects on private consumption in Greece

The Working Paper Series disseminates research papers of high quality and often of a more technical nature relevant to the various areas of interest to the Bank.They constitute "work in progress" and are published to stimulate discussion and contribute to the advancement of knowledge of economic matters. They are addressed to experts, so readers should be knowledgeable in economics.Working Papers are available in electronic format only (pdf).

Two Scenarios for Sustainable Welfare: A Framework for an Eco-Social Contract

More nation states are now committing to zero net carbon by 2050 at the latest, which is encouraging, but none have faced up to the transformation of economies, societies and lives that this will entail. This article considers two scenarios for a fair transition to net zero, concentrating only on climate change, and discusses the implications for contemporary ‘welfare states’. The first is the Green New Deal framework coupled with a ‘social guarantee’. I argue that expanded public provision of essential goods and services would be a necessary component of this strategy. The second scenario goes further to counteract runaway private consumption by building a sufficiency economy with ceilings to income, wealth and consumption. This would require a further extension of state capacities and welfare state interventions. The article provides a framework for comparing and developing these two very different approaches.

SUBSTITUTABILITY BETWEEN GOVERNMENT AND PRIVATE CONSUMPTION IN SUB-SAHARAN AFRICA

The question of whether private and public consumption are complements or substitutes has been an issue of concern and hence, attracted the attention of researchers and policy think tanks. This study therefore investigates this important phenomenon within the context of sub-Saharan Africa (SSA) to inform the design of fiscal policy measures. Using panel data spanning the period 1981–2016 for 21 sub-Saharan African countries, the results indicate that, government and private consumption are substitutes. This indicates that government spending crowds out private consumption in the sub region. Vital policy implications have been provided for consideration based on the findings.

Analysis of Relationship amongst Money Supply, Prices and Output in India

The paper studies the relationship between Money Supply, Prices and Output by creating a robust VAR Model incorporating the changing trend of the macro-economic variables. The observations were that rate of change of Prices and Money Supply have a direct relationship (in short and long run), rate of change of Price and Private Consumption have an inverse relationship (more significant in long run), and rate of change of Investment and Money Supply have an inverse relationship (significant in long run). The study provides a foundation for understanding of stability and shocks amongst the macro-economic variables which have further scope of exploration in terms of magnitude of absolute change and implicit relationships which exist amongst the variables in the Quantity Theory of Money.