Determinants of Online Word-of-Mouth: Evidence from Durable Goods Market
Online reviews have become one of the most effective tools to influence consumer behavior and level of sales. In this paper we consider determinants of online reviews and ratings. The study is based on more than three thousand online reviews from Russian consumers of durable goods (electronics and home appliances). We found a significant difference in the level of influence between new and old reviews. Moreover, the higher the total numbers of reviews available, the higher the number of reviews taken into account by a particular consumer. Another finding is that both average online rank and price of a product are positively correlated with variance of reviews about that product. Based on differences in the effectiveness of information transmission about quality, products were divided into two categories: experience goods and search goods. We provide an econometric model that helps explain not only the dynamic but also the direction of consumers’ ranking of a product depending on the number and content of existing reviews.
In theory, a poverty line can be defined as the cost of a common (inter-personally comparable) utility level across a population. But how can one know if this holds in practice? For groups sharing common consumption needs but facing different prices, the theory of revealed preference can be used to derive testable implications of utility consistency knowing only the "poverty bundles" and their prices. Heterogeneity in needs calls for extra information. We argue that subjective welfare data offer a credible means of testing utility consistency across different needs groups. A case study of Russia's official poverty lines shows how revealed preference tests can be used in conjunction with qualitative information on needs heterogeneity. The results lead us to question the utility consistency of Russia's official poverty lines.
Refurbishing products, which are increasingly sold in business-to-consumer markets, is a key strategy to reduce waste. Nevertheless, research finds that consumers’ willingness to pay (WTP) for refurbished products is low. Strategies for a higher WTP are needed in order to grow consumer markets for refurbished products. Eco-certification of refurbished products may be a key strategy here. Drawing on the consumer WTP literature concerning “green” products, we investigate the impact of independent eco-certificates. Our analysis is based on a survey of 231 potential customers. The results suggest that, across various product categories, the WTP for products with refurbished components is significantly lower. Adding an eco-certificate tends to return the WTP toward the virgin product level. We show that consumers with proenvironmental attitudes particularly exhibit green buying behavior. Our findings indicate that eco-certification is often worthwhile because it enhances the business rationale for producing products with refurbished components.
The article presents the analysis of research results of FOM, which was carried out within the bounds of the project «People XXI». The project was devoted to a comprehensive study of the behavior of «social innovators» and their life style. The conceptual base for the analysis' sociology has been the works by Russian and foreign economic sociologists and specialists in the field of consumption. «People XXI» show a rational approach to spending of spare time which is characterized by its capitalization, active cultural consumption and consumer leadership.
Advances in the bioeconomy lead to a range of innovative products appearing at the consumer markets. However, these products often face consumer resistance. In this chapter we test if a reference point affects approach can provide more information about consumers decision-making regarding novel food products than a random utility approach. We draw on data from a survey and second price Vicrey auction for novel foods with health and environmental benefits. First, we analyze consumer choice within a random utility framework and compare states and revealed preferences. Second, reference point effects are included into the methodological framework and weighted and unweighted models for revealed preferences are obtained. Results of random utility estimations provide information on attributes value and the evidence of overestimated stated preferences. The preference point approach indicates the presence of reference points in the experimental auction data and asymmetrical effects of gains and losses on utility values.
In this book, the impact of modern social media on the development of management system in the hospitality and tourism industry is examined. The present research project was elaborated in two subsequent phases. During the first research phase the localization of the apparatus, methodology, study design, questionnaire and methodology for the Russian version of the research project were carried out. That was done based on the courtesy materials recently completed project by a Center for Hospitality Research Cornel the United States. The second project phase was aimed at identification of the specifics of the Russian consumers perception towards the use of social media for planning their trips.
The authors develop a definition of the sharing economy as a new business model. The article analyzes and systemizes different approaches to understanding this term, highlights its key components. Also, the authors discuss a number of factors affecting the consumers’ behavior in the era of the digital economy, highlight key trends in the market of the collabo-rative consumption. As a result, based on the online-survey data, the authors identify the most popular services of the sharing economy for Russian consumers.
The rise of creative industries is closely connected with the range of changes concerning socio-economic development in postindustrial and digital economy; reflects new trends in consumer behavior and innovations in business models. Entrepreneurship in creative industries is very attractive sphere for small and medium-sized businesses, it gives new opportunities for cooperation between representatives of creative industries and other agents of economic and social relations. An interest to creative industries development could be observed from different stakeholders across Russia. Issues of effective functioning and interaction of commercial and non-profit organizations and entrepreneurs in creative sector are becoming the key points for successful development of markets in creative sphere.
This manual is designed to expand knowledge in the field of creative entrepreneurship, to understand the particular features of market structure from supply and demand side, and to apply practical recommendations and tools for solving specific problems that an entrepreneur faces in his activities. The manual consists of 3 chapters, the text reveals the definition and boundaries of the creative industries sector; economic bases of demand and supply side of market for products and services created by creative workers and having a symbolic and cultural value (Chapter 1). Besides, authors pay attention on dealing business in the digital environment and infrastructure for creative entrepreneurs. Chapter 2 of the manual reveals the issues of interaction and communication with consumers, identifying and working with various consumers segments, analyses factors that influence consumer’s decision-making process. The manual presents practical examples (cases) and tasks that allow to master and improve the tools of marketing research. Chapter 3 describes in detail methodology and stages of the business modeling in creative industries. Questions for self-examination, cases and exercises make it possible to combine the theory and practice of the questions studied. The manual is addressed to a wide range of readers, can be used by educational institutions, it is useful to the industry representatives as an additional theoretical and practical guide. The manual is created in the framework of the project “Creative Grasp” supported by the Council of Nordic Countries.
The paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2012. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.
The paper examines the principles for the supervision of financial conglomerates proposed by BCBS in the consultative document published in December 2011. Moreover, the article proposes a number of suggestions worked out by the authors within the HSE research team.