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Faculty & Research

Consumers' Willingness to Spend May Exceed Ability

After nudging upward last quarter, the American Customer Satisfaction Index rose to 74.1 in the first quarter 2006, its largest jump in three years.

Both consumer spending and Gross Domestic Product had significant increases in the first quarter, and ACSI data predict that trend may continue to defy expectations despite slow wage and salary growth and a negative savings rate. Customer satisfaction data show that rising satisfaction as measured by the ACSI is correlated with increased inclination to spend, even if consumers' ability to spend is uncertain.

"Even with climbing energy prices, higher interest rates, a soft dollar, a low approval ratings for the president, satisfied American consumers will likely continue to spend only if they can find the money to do so, and that is certainly unclear," said Claes Fornell, head of the ACSI and professor of marketing at the Ross School. "But as consumers feel a bigger economic pinch, companies will be competing for fewer and fewer dollars, making customer satisfaction increasingly important."

In the first quarter of every year, the ACSI measures customer satisfaction with the quality of products and services in energy utilities, airlines, express delivery, U.S. Postal Service, hospitals, hotels, fast food restaurants, cable and satellite television, and telecommunications. More...


It Takes a "Village" to Reduce African-American Infant Mortality

Despite federal, state and local efforts to improve the quality and access to prenatal care among African Americans, race-based disparities in infant mortality—driven by poverty, poor access to medical care, environmental hazards, stress and racism—persist in the United States.

Leaders at the community, family and individual levels must mount a concerted effort to address the high mortality rate among African-American infants and to develop and implement creative solutions.

"It takes a 'village' to alleviate the infant-mortality gap between whites and African Americans," said Lynn Perry Wooten, clinical assistant professor of strategy and of management and organizations. "Public-policy makers, health-care executives and community leaders must adopt a new approach that increases synergies between traditional disciplines and goes beyond simplistic solutions to this complex problem. Their strategy should involve multiple stakeholders and incorporate a diversity of intervention programs aimed at preventing pre-term deliveries and reducing infant deaths." More...

   

Highly Taxed Stocks Get Higher Returns

Investors who own stocks with higher tax rates also get higher returns, says finance professor Clemens Sialm.

Using new data covering tax burdens on a cross-section of equity securities between 1927 and 2004, Sialm found a strong link between risk-adjusted stock returns and effective personal tax rates (total tax paid divided by net taxable income before taxes).

Specifically, a one percentage point increase in the effective tax of an equity portfolio increases the average return of the portfolio by 1.54 percentage points.

"Consistent with tax capitalization, stocks facing higher effective tax rates tend to compensate taxable investors by generating higher before-tax returns," Sialm said. "The average returns of highly taxed securities tend to be high because their valuation levels are relatively low. Thus, taxes tend to depress asset valuations, resulting in higher average before-tax returns." More...

 

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Highlights

Dave Ulrich Tops List of Most Influential Leaders in Human Resources.

Michelle Hanlon (Accounting), Reuven Lehavy (Accounting), Carolyn Yoon (Marketing) and Lu Zheng (Finance) have been promoted to associate professor with tenure.

Students Honor Top Teachers - Five Ross School faculty tapped for Teaching Excellence Awards.

Ross School Honors Faculty - Six cited for research, teaching and service.

Ted London selected as finalist for best dissertation award.

Brian Talbot named interim director of the Graham Environmental Sustainability Institute.

Judy Olson recognized for contributions to the study of human-computer interaction.

Black Business Students Honor Professor Emeritus Al Edwards

E. Han Kim recognized for outstanding research on the Korean Economy