What makes a good label? : the effect of wine label design on product evaluation and purchasing behaviour : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Marketing at Massey University, Albany, New Zealand

Companies spend billions annually on packaging and labelling, yet little is known about how and why specific features of package design influence consumer responses. This thesis identifies, across two projects, what wine label elements or themes should be used, where and when. First, while the use of fantasy themes is increasing across product categories, it is unclear how consumers react to fantasy labels. Across five studies, the results unite seemingly contradicting theories predicting the effects of fantasy labels on product evaluation and purchasing behaviour by uncovering an important boundary condition: product quality signal, in line with the principle of hedonic dominance. The results suggest that for low quality products, fantasy labels backfire (consistent with research on metacognition). For products average in quality, fantasy and non-fantasy labels do not differ in their performance. Yet, in the presence of a high quality signal, fantasy labels impact product evaluation and purchasing behaviour positively. This positive effect is sequentially driven by the evocation of the imaginary and affect, in line with research on mental simulation. Second, it is unclear to what extent elements of wine label design affect sales relative to other marketing mix effects. Specifically, we use wine transactional data for 127 SKUs across two liquor stores in New Zealand, covering 105 weeks. The findings suggest that some specific label elements have strong effects on sales. Specifically, extra text, as a quality cue, has the strongest positive effect. Overall, after price, the combination of image(s) and extra text has the strongest (negative) effect on sales. In line with research on processing fluency, this research also shows whether and when to use simple versus complex elements (typeface, label structure, mode of information). This thesis has important implications for wine companies and retailers

Local Social Capital and Geographical Mobility: Some Empirics and a Conjecture on the Nature of European Unemployment

European labor markets are characterized by the low geographical mobility of workers. The absence of mobility is a factor behind high unemployment when jobless people prefer to remain in their home region rather than to go prospecting in more dynamic areas. In this paper, we attempt to understand the determinants of mobility by introducing the concept of local social capital. Using data from a European household panel (ECHP), we provide various measures of social capital, which appears to be a strong factor of immobility. It is also a fairly large factor of unemployment when social capital is clearly local, while other types of social capital are found to have a positive effect on employability. We also find evidence of the reciprocal causality, that is, individuals born in another region have accumulated less local social capital. Finally, observing that individuals in the South of Europe appear to accumulate more local social capital, while in Northern Europe they tend to invest in more general types of social capital, we argue that part of the European unemployment puzzle can be better understood thanks to the concept of local social capital.European unemployment, geographical mobility, social capital

Tipping and the Dynamics of Segregation

In a classic paper, Schelling (1971) showed that extreme segregation can arise from social interactions in white preferences: once the minority share in a neighborhood exceeds a critical "tipping point," all the whites leave. We use regression discontinuity methods and Census tract data from 1970 through 2000 to test for discontinuities in the dynamics of neighborhood racial composition. White population flows exhibit tipping-like behavior in most cities, with a distribution of tipping points ranging from 5% to 20% minority share. The estimated discontinuities are robust to controls for a wide variety of neighborhood characteristics, and are as strong in the suburbs as in tracts close to high-minority neighborhoods, ruling out the main alternative explanations for apparent tipping behavior. In contrast to white population flows, there is no systematic evidence that rents or housing prices exhibit non-linearities around the tipping point. Finally, we relate the location of the estimated tipping points in different cities to measures of the racial attitudes of whites, and find that cities with more tolerant whites have higher tipping points.

The Trade Reducing Effects of Market Power in International Shipping

Developing countries pay substantially higher transportation costs than developed nations, which leads to less trade and perhaps lower incomes. This paper investigates price discrimination in the shipping industry and the role it plays in determining transportation costs. In the presence of market power, shipping prices depend on the demand characteristics of goods being traded. We show theoretically and estimate empirically that shipping firms charge higher prices when transporting goods with higher product prices, lower import demand elasticities, and higher tariffs, and when facing fewer competitors on a trade route. These characteristics explain more variation in shipping prices than do conventional proxies such as distance, and significantly contribute to the higher shipping prices facing the developing world. Markups increase shipping prices by at least 83 percent for the mean shipment in Latin American imports. Our findings are also important for evaluating the impact of tariff liberalization. Shipping firms decrease prices by 1-2 percent for every 1 percent reduction in tariffs.