06162oam 22010934 450 991078823400332120230721045656.01-4623-5680-X1-4527-8237-797866128412861-282-84128-91-4518-7035-3(CKB)3170000000055069(EBL)1607940(SSID)ssj0000943997(PQKBManifestationID)11473540(PQKBTitleCode)TC0000943997(PQKBWorkID)10983801(PQKB)10413346(OCoLC)762093397(MiAaPQ)EBC1607940(IMF)WPIEE2008177(EXLCZ)99317000000005506920020129d2008 uf 0engtxtccrConsumer Confusion : The Choice of AFORE /Moisés Schwartz, Enrique Domínguez, Roberto Calderón-ColínWashington, D.C. :International Monetary Fund,2008.1 online resource (63 p.)IMF Working PapersIMF working paper ;WP/08/177Description based upon print version of record.1-4519-1488-1 Includes bibliographical references.Contents; I. Introduction; II. The Choice of AFORE in Mexico; A. Inelasticity of Demand and Switching among Fund Managers; Figures; 1. Switches; 2. Turnover Ratio for Mexico and Chile; Tables; 1. Regression Analysis 1; 2. Regression Analysis 2; 3. Switches In 2006; 4. Gain or Loss after Switching Workers' Estimated Balance at the Age of Retirement; 5. Gain or Loss after Switching Workers' Estimated Balance after a Five-Year Period; 6. Loss from not Switching to the to the "Optimal" AFORE Workers' Estimated Balance at the Age of Retirement7. Loss from not Switching to the "Optimal" AFORE Workers' Estimated Balance after a Five-Year Period B. The Effectiveness of an Increase in Supply; 3. Gain/Loss in Balances for Hypothetical Cases of Workers that began accruing; 4. Winners and Losers Due to Decreases in Fees; 5. Changes in Balances Due to Decreases in Fees; III. Consumer's "Confusion" and "Noise"; A. Theoretical Framework; B. Statistical Analysis of Possible "Noise" Distributions8. "Noise Distribution" Percentage Loss in Pension Balances at Retirement Age Due to "Sub-Optimal" Choice of AFORE Fitted by the Normal and Weibull Distributions.9. "Noise Distribution" Percentage Loss in Pension Balances After A Five-year Period Due to "Sub-Optimal" Choice of AFORE Fitted By The Normal and Weibull Distributions; C. Mark-up Estimation in the AFORE Industry; 6. Mark-up According to the Number of AFOREs; IV. Empirical Study; A. Measurement of "Noise" and Consumer "Confusion"; B. Econometric Framework to Measure "Confusion's " Relative Importance; C. Empirical ResultsV. Concluding Remarks Annexes; I. The Model; II. Questionnaires; ReferencesThis paper was prepared for the World Bank 4th Annual Contractual Savings Conference (Washington DC, April 2008) co-organized by Gregorio Impavido (gimpavido@imf.org). The article shows that account transfers among pension administrators in Mexico barely respond to price or return considerations and in general has not improved the consumer's pension balance. Instead of strengthening competition through lower fees and higher returns for the consumer, AFORE switching has so far undermined the system and resulted in the destruction of value. Moreover, "noisy" evaluations of the product by the consumer tend to undermine the power of competition. Thus, an increased number of pension fund managers has not provided a more competitive environment. The theoretical framework allows for the estimation of "noise" and mark-ups in the AFORE industry. As the number of AFOREs increases, the mark-up diminishes at a very slow rate. This implies that more participants in the industry will hardly affect prices.IMF Working Papers; Working Paper ;No. 2008/177Pension trustsMexicoManagementEconometric modelsCompetitionMexicoEconometric modelsFinance: GeneralimfLaborimfPublic FinanceimfSocial Security and Public PensionsimfNonwage Labor Costs and BenefitsimfPrivate PensionsimfRetirementimfRetirement PoliciesimfGeneral Financial Markets: General (includes Measurement and Data)imfNational Government Expenditures and Related Policies: GeneralimfPensionsimfLabourimfincome economicsimfFinanceimfPublic finance & taxationimfPension spendingimfCompetitionimfExpenditureimfExpenditures, PublicimfMexicoimfPension trustsManagementEconometric models.CompetitionEconometric models.Finance: GeneralLaborPublic FinanceSocial Security and Public PensionsNonwage Labor Costs and BenefitsPrivate PensionsRetirementRetirement PoliciesGeneral Financial Markets: General (includes Measurement and Data)National Government Expenditures and Related Policies: GeneralPensionsLabourincome economicsFinancePublic finance & taxationPension spendingCompetitionExpenditureExpenditures, Public332.67254Schwartz Moisés1485177Domínguez Enrique1485178Calderón-Colín Roberto1485179DcWaIMFBOOK9910788234003321Consumer Confusion3704169UNINA