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Insurance and asset holdings are modeled as the jointly determined outcomes of a constrained optimization problem. Consequently, (1) full coverage may be optimal despite limited premium loading, (2) insurance is normal if insurable assets are normal, (3) insurance cannot be a Giffen good, and (4) insurance is a complement to price‐elastic assets.

Conventional measures of risk aversion based on first and second derivatives of utility are strictly local instruments, valid only for infinitesimally small changes in wealth. This paper to develop a global index suitable for assessing attitudes toward large‐scale risks.

Integral calculus is used to measure the geometric area between an individual's actual utility function and a linear function displaying risk neutrality, over the entire range of potential wealth outcomes for a given risk. The area is then converted to an index number.

Local and global measures of risk aversion yield similar interpersonal comparisons only for small risks; with larger risks, local measures distort interpersonal differences. The analysis also shows that individuals having exponential utility functions evaluate risk exclusively on the basis of wealth dispersion, whereas those with logarithmic or square‐root utilities consider both the mean and variance of wealth.

The global index is quantifiable if the functional form of utility is known; further research is needed to approximate the index when information about utility is limited.

The most important risks encountered in practice, such as the possibility of unemployment or disability, involve variations in wealth far larger than differential calculus is designed to accommodate. The integral index therefore provides a more appropriate basis for measuring and comparing risk preferences.

The paper provides an innovative geometric interpretation of global risk aversion, and in contrast to local measures, the integral index captures differences in the intensity of an individual's aversion toward risks of various magnitudes.

The purpose of this paper is threefold: conceptually, to demonstrate that ethical behavior is rational; theoretically, to illustrate that conscience can be readily incorporated into an expected utility framework; and empirically, to investigate whether conscience is an effective and economically important deterrent to free riding.

An analogy to risk aversion demonstrates the rationality of ethical behavior. An expected utility model of tax evasion is then augmented by a conscience parameter and calibrated using recent empirical data from a transition economy.

Taxpayers in Moldova are estimated to have engaged in roughly 10‐33 percent as much tax evasion as predicted by a model of amoral preferences. The difference amounts to between $11 million and $19.6 million in government revenues annually between 1997 and 2000.

The model is calibrated with aggregate data and consequently the empirical results are approximate. Replications with disaggregated data sets would provide useful confirmation of the findings.

Economic models of individual decision‐making which assume amorality and ignore conscience vastly overestimate the level of free riding. In practice, compliance with taxation and other social regulation may be amenable to moral suasion as well as law enforcement.

Contrary to the predominant neoclassical paradigm of amoral self‐interest, this paper highlights the importance of ethical preferences in modeling and measuring economic behavior. Researchers can more accurately predict and policymakers can more effectively influence individual decision‐making by taking account of moral sentiments.

This paper simplifies and extends the literature on habit‐forming consumption. When addictive and nonaddictive goods are consumed, complements may become substitutes and normal nonaddictive goods may become inferior. Alternatively, when all goods are equally addictive, consumers favor goods with stable prices. Implications for product promotion and public policy are discussed.

Some labor supply curves exhibit inflection points at which they bend backward or fall forward; thus, some workers alternate between increasing and decreasing their labor hours as wages increase. No consensus has yet been reached on the underlying motive for such behavioral inconsistencies. This paper aims to develop a unified theory to explain each of these variations in labor supply.

The author employs a simple model of labor supply with additively separable utility over income and leisure. The sub-utility function for income is of the Friedman-Savage type, exhibiting preferences that alternate between increasing and diminishing marginal utility of income.

Labor supply curves slope downward where relative risk aversion is strong, and upward where relative risk aversion is weak or negative. Thus, utility functions with inflection points can form the basis of labor supply curves with inflection points.

Friedman-Savage utility can explain virtually any observed labor supply functions, including convex, backward-bending, forward-falling, and inverted-S curves.

Inflection points on the labor supply curve can create multiple and unstable market equilibria. Labor-market policies, including legislation pertaining to minimum wages and collective bargaining, and policies to enhance education and economic security, may reduce aversion to risk and thereby decrease the prevalence of unstable equilibria.

This paper unites two lines of research – labor supply and Friedman-Savage utility – which have, rather remarkably, been separate to date. In doing so, it provides a new application of the classic Friedman-Savage paradigm, and a new explanation of labor supply curves with negatively-sloped regions.

High school student achievement in economics has been predominantly characterized by low test scores, while secondary social studies preservice teachers have less formal training in economics than most other social studies disciplines. In this self-study, the instructional affordances and constraints of an experimental economics methods course are analyzed in terms of developing secondary social studies preservice and inservice teachers’ pedagogical content knowledge (PCK) in economics from both the instructor and pre and inservice teachers’ perspectives. Two course assignments appeared to most notably develop PCK in economics, the Analysis of Economic Events and the Active-Learning, Interdisciplinary Economic Lesson. Findings suggest interrelationships exist among common content knowledge, specialized content knowledge, and horizon content knowledge for teaching economics. Implications and instructional suggestions for social studies teacher education and professional development are discussed.

This study aims to answer two unique related questions on the overarching relationship between a CEO’s personal religious affiliation, the firm’s advertising spending decision and its shareholder value. First, does the CEO’s religious affiliation, a proxy for risk taking, influence the firm’s advertising spending decision? Second, does the advertising spending decision mediate the relationship between the CEO’s religious affiliation and the firm’s shareholder value?

This study uses data on the religious affiliations of CEOs of publicly listed US firms, 1992–2014, from Marquis Who’s Who; advertising spending and shareholder value from Compustat, and panel data-based regression models including CEO characteristics from ExecuComp, and firm-, industry- and time-based controls.

We find higher advertising spending levels for Protestant over Catholic-led firms, and advertising spending mediates the relationship between a CEO’s religious affiliation and the firm’s shareholder value.

Marketing theory needs to incorporate the missing but fundamental effect of the CEO’s religious affiliation-based values on decisions and outcomes.

Boards of Directors may need to align the CEO’s and their firm’s spending goals.

While previous studies focused on the influence of religious affiliation on consumers’ attitudes and behavior, and executives’ financial and R&D spending decisions, this study, to the best of the authors’ knowledge, is the first to investigate the effect of a CEO’s religious affiliation on the firm’s advertising spending decision and its shareholder value.

The oil and gas sector are among the nonrenewable energy sectors that contribute immensely to the economic development of more than 98 countries around the globe. Nigeria depends largely on revenue from oil and gas. Unfortunately, oil and gas companies mostly evade taxes. This study aims to investigate the effects of variables subsumed in the economic deterrence theory of Allingham and Sandmo (1972), which comprise (tax rate, penalty and detection probability) with one additional variable royalty rates (RR) on petroleum profit tax compliance (PPTC).

The study used a survey to collect data from 300 local and multi-national oil and gas companies in Nigeria. SPSS version 25 and partial least squares-structural equation modeling (PLS-SEM) version 3.8 were used to analyze the data.

The results reveal that there is a negatively significant relationship between tax rate and RR and PPTC. The findings also show a positive and significant relationship between penalty and detection probability and PPTC.

The implication of the current study is that the current tax rate and RR are determinants of PPTC in Nigeria. Policymakers, in collaboration with the tax authority, should revisit these variables to enhance the level of PPTC, which could lead to an overall improvement in the country’s tax revenue.

This paper aims to clearly conceptualize the idea of the smart library and propose a holistic approach to building smart libraries, in accordance with recent practices and state-of-the-art technologies.

Drawing on an extensive review of existing literature and practice about library construction, this paper distinguishes between similar types of smart library and divides the concepts associated with smart library building into three dimensions: technology, service and human.

Traditional libraries can transform to smart libraries by strategic design and implementation of advanced technologies, such as cloud computing, data mining and artificial intelligence, but they also need to consider service building, user cultivation and librarian training.

Aligning to the three main dimensions of smart libraries (technology, service and human), this study clarifies the concept of the smart library and offers strategic principles: integration of infrastructures, construction of service and human learning. It provides guidelines and directions for public and academic libraries committed to becoming smart libraries.