Προσδιοριστικοί Παράγοντες Χρήσης του Η/Υ και της Χρήσης Διαδικτύου στον Αγροτικό Πληθυσμό της Κύπρου

Συνεδριακή Ανακοίνωση

για το 12ο Πανελλήνιο Συνέδριο Αγροτικής Οικονομίας

Αριστοτέλειο Πανεπιστήμιο Θεσσαλονίκης (Α.Π.Θ),

Νοέμβριος 2012

 Προσδιοριστικοί Παράγοντες Χρήσης του Η/Υ και της Χρήσης Διαδικτύου στον Αγροτικό Πληθυσμό της Κύπρου

Γεώργιος Αδαμίδης*, Ανδρέας Στυλιανού*, Πέτρος Κ. Κοσμάς**, Κωνσταντίνος Δ. Αποστολόπουλος***

*Ινστιτούτο Γεωργικών Ερευνών (Κλάδος Αγροτικής Ανάπτυξης), Λευκωσία, Κύπρος, e-mail: adamides@arinet.ari.gov.cy, a.stylianou@arinet.ari.gov.cy.

**Ειδικός Επιστήμονας, Τεχνολογικό Πανεπιστήμιο Κύπρου, e-mail: petros.kosmas@cut.ac.cy

***Καθηγητής Χαροκοπείου Πανεπιστημίου (Εργαστήριο Ανθρωποοικολογίας και Αγροτικής Οικονομίας), Αθήνα, Ελλάδα, e-mail: capost@hua.gr

Περίληψη

Το άρθρο αυτό εξετάζει τους παράγοντες που επηρεάζουν τη χρήση του Η/Υ και του διαδικτύου από τους Κύπριους παραγωγούς, χρησιμοποιώντας δεδομένα από 526 γεωργούς και κτηνοτρόφους που επιλέχθηκαν με τη μέθοδο της τυχαίας στρωματοποιημένης δειγματοληψίας. Χρησιμοποιούνται μοντέλα logit για να εξεταστούν τα κοινωνικοοικονομικά χαρακτηριστικά των Κυπρίων παραγωγών, που πιθανόν να επηρεάζουν τη χρήση ή μη του Η/Υ και του διαδικτύου. Τα αποτελέσματα έδειξαν ότι το 60,6% των ερωτηθέντων χρησιμοποιούν Η/Υ και το 54,2% χρησιμοποιούν το διαδίκτυο. Από την ανάλυση των μοντέλων logit προέκυψε ότι η χρήση των δύο τεχνολογιών επηρεάζεται σημαντικά από παράγοντες όπως είναι η ηλικία, το μορφωτικό επίπεδο, το εισόδημα, ο τύπος της αγροτικής δραστηριότητας και η περιοχή της εκμετάλλευσης.

Λέξεις Κλειδιά: Τεχνολογίες της Πληροφορίας και των Επικοινωνιών (ΤΠΕ), χρήση Η/Υ και διαδικτύου, ανάλυση logit, αγροτική εκμετάλλευση, αγροτικός πληθυσμός, Κύπρος.

Nominal and Real Aims of Austerity Programmes: the Greek (extreme) Case

Nominal and Real Aims of Austerity Programmes:

the Greek (extreme) Case

————

Leonidas Vatikiotis, PhD

and

    Petros C. Kosmas, PhD

————

Abstract

One year after the adoption of the Memorandum between the Greek government and the IMF-EU, many official data allows us to check, whether the objectives were implemented for which imposed. The dominant opinion in Greek political circles supports strong cuts, which will in exchange save the Greek economy from relying on the high cost of borrowing on the financial markets. This report examines the detail of the adjustment programme of Greece and leads to the opposite conclusion. In particular we examine: Firstly, the reasons invoked to legitimize the society the use of IMF-EU. Secondly, the measures implemented this year. Thirdly, the real causes of the Greek financial crisis. Fourthly, these results were provided in terms of social measures and the conclusions were reached in relation to the real goals of austerity. On this basis we argue that the real challenge was to improve fiscal imbalance, but with a major shift in macroeconomic policy that will allow to increase the profits of capital.

Finally, reports in direct workable proposals have been produced that can solve the debt crisis faced by Greece and the mean improvement in the position of the social majority.

Keywords: Austerity Programs; Public Debt; Memorandum; Greece

1. Nominal aims

In May 2010 the government of Greece agreed with the IMF-EU for a set of economic austerity measures, which is supposed to solve the financial problem in Greece.

The basic outline of the financial problem in Greece is defined by a combination of high debt and fiscal deficit. Specifically, in 2009 and 2010, Greece’s government debt to GDP ratio was 127% and 143% when the average mean of the 17 countries of the Eurozone was 79% and 85% and the of EU 27 was 74% and 80% of GDP respectively. And the budget deficit in 2009 and 2010 was 15% and 11% of GDP when the corresponding mean for the EU-27 was 7% and 6% of Eurozone’s GDP for both years (Eurostat, 2011).

The action mechanism of EU-IMF in Greece accelerated by rising interest rates, which made it unusually expensive to be prohibitive to fund borrowing the Greek Republic and this in turn by the continuing degradation of the Greek economy from the credit rating agencies.

The resort to IMF- EU and the measures that accompanied the four Memorandums to date have been applied to correct these distortions.

 

2. Measures that imposed by IMF–EU

Outlining the measurements that have been imposed until today in order to confront the crisis of the public debt we observe that they concern:

  • Reductions in wages in the public and private sector by removing working allowances and cropping the 13th and 14th salary.
  • Against insurance law with reduces pensions and promotes the contributory system.
  • Sharp reduction in social expenditure having as a direct consequence the closure of 1056 schools – something unprecedented in the history of the Greek public sector, the dismantling of public health, as shown by the “working on the limits” of historic public hospitals and clinics and the shrinkage of public transport.
  • Dismissal of tens thousands of contracted employees meeting fixed and permanent needs in the broad and narrow public sector by not renewing the contracts.
  • Abolition of collective bargaining agreements and transferring the weight of trading in an increasingly low level: from the collective – in general area, then to the operational, and finally to the individual, where reigns the employing and managing arbitrariness.
  • Abolition of the institution of arbitration.
  • Increase the working hours in the public sector.
  • Reduction of compensation in order to facilitate redundancies.
  • Increased indirect taxation and in particular of the VAT and excise duties at the same time reducing the tax rate from 24% to 20% for business.
  • Facilitating business activities of multinational corporations and limited liability companies through the liberation of closed professions.
  • Sell-off public assets by privatization programmes of 50 billion euros, which were announced by the Troika, when its existence was initially denied by the government of Greece in a categorical manner.

 

3. Real causes of Greek sovereign Debt Crisis

The evaluation of the real goals of the austerity programs requires the examination of the actual causes of the Greek budget crisis which are seven in total.

3.1 Measures to tackle Depression

The collapse of Lehman Brothers in September 2008 increased the interbank interest rates, limited bank financing in the economy, reduced the consumer spending as well as the public and the public tax revenues in all EU countries. Furthermore, the government intervention aiming to mitigate the effects of the crisis increased public spending and widened the gap across the EU. This situation is much worse in Greece, where from 2008 until now the banks have absorbed a total of 108 billion (of which 85 billion. were guarantees and 23 billion. were cash or equivalent bonds). Likewise, the 20 most developed countries in the world were confronted with a comparable situation. Consequently, the only times in history that recorded a similar increase in debt to that of 2009 (13%) where in time of war and especially in 1944: 22% and 1919: 14 % (IMF, 2010).

Comprehensively, it is estimated that the current crisis in advanced countries led to output loses of 25% of GDP and a consequent increase in public debt of around 24% of GDP (Laeven and Valencia, 2010).

3.2 Addiction of the Greek capital in Direct Subsidies

The rescue of problematic firms in the 80s and the Olympic Games in 2004 -with an initial cost of 9.5 billion and probably a final cost of 20 billion- are the tip of the iceberg of direct aid to enterprises in the form of cash. However, in recent decades the Greek companies, especially the elite, have been steadily supported by billions each year in the form of development incentive through the Public Investment Program. The scandals are fostered by accomplices of the two powerful political parties (PASOK and ND) as well as of the big companies. The latter were imposed by the Memorandum and appear to be concerned about deficits.

3.3 Privatizations

By invoking the rationalization and the reduction of the state, the government revenues lost revenue source. The most popular but not unique example is the case of OTE Telecommunications, which was sold to the German Deutsche Telecom from the government of New Democracy under completely non-transparent procedures and a price equal to the public revenue for a year.

3.4 Equipment for Defense

The amounts spent nationally on armaments gives the impression that Greece is a military superpower in Europe and Mediterranean.

For the purpose of illustration, when on average in the EU of the 27 spends 1.6% of GDP on armaments, Greece spends 3,3% (SIPRI, 2011), which is twice the EU average and three times more of what other neighboring countries such as the Mediterranean Europe, spend. Although this equipment is not necessary, it is however enforced by NATO and not by the national defense.

 TABLE 1: Total Expenditure for Payment of Debt, in Euro (1991-2011)

 

YEAR

 

AMORTIZATION

 

INTERESTS

CONCURRENT COSTS

 

TOTAL

1991

2.703

4.203

46

6.952

1992

6.406

4.123

71

10.600

1993

4.707

6.228

135

11.070

1994

7.162

8.990

190

16.342

1995

7.907

9.098

307

17.312

1996

10.263

9.641

339

20.243

1997

10.145

8.809

308

19.262

1998

9.682

9.018

170

18.870

1999

9.251

9.290

101

18.642

2000

13.131

9.499

58

22.688

2001

11.618

9.289

39

20.946

2002

20.280

8.535

59

28.874

2003

20.763

9.208

70

30.041

2004

18.444

9.283

72

27.799

2005

20.379

9.616

71

       30.066

2006

16.589

9.441

56

26.086

2007

22.195

9.657

71

31.923

2008

26.246

11.134

72

37.452

2009

29.000

12.195

145

41.340

2010

19.510

12.950

0

32.460

2011

28.130

15.920

0

44.050

ΣΥΝΟΛΟ

314.511

196.127

2.380

513.018

Source: Ministry of Economics, Government Budgets

3.5 Low Taxes on Capital

Greece has is one of the countries with the lower tax revenue to GDP: 32.6% of GDP when the average in the EU of the 27 and the euro area is 37% and in Denmark that has the highest ratio of 48%. The low tax revenues are a consequence of the almost symbolic taxation of the capital.

This reflects from the great discrepancy that display the rates of capital taxation in Greece compared to the EU: the rate is 15% in Greece while the corresponding tax rates are 27% in the EU (Eurostat, 2010).

3.6 Participation in the Eurozone

The participation of Greece in the European Union in 1981 and in the Eurozone in 2002 initially accelerated the liquidation of capital at the expense of manufacturing, agriculture, livestock and total employment and, of course, of government revenues. Furthermore, the reason for the low rate of exports in total GDP (21%vs.40% for the euro area) should be sought in the adoption of a monetary policy that is not only inappropriate but diametrically opposite to the interests of the Greek economy. Suffice it to say that the Greek economy is required to survive in an environment of appreciation of the «national» currency by 64% within a decade (this how much the euro has appreciated against the dollar since the 01/02/2002), while in the past every seven years was devaluated.

The causes of the current crisis in the Eurozone are related to the separation of the Eurozone in periphery and center respectively.  The intensification of conflicts within was a result of depressed wages policy that was followed by Germany over the last decade (RMF, 2010).

 

3.7 Servicing Public Debt  

The costs of servicing the public debt between 1991 and 2011 amounted to 513 billion € (Table 1). The redemption of short-term securities or titles only in the last 9 years (2003 – 2011) amounted to 151 billion. Evidently, it is easy to conclude that over the last 20 years we have paid the debt twice. (A clear case of compound interest!)

The destructive role of the public debt on public finances is evident by the fact that tax revenues this year (52.9 billion) is more than enough for the necessary social expenditure, i.e., wages and public pensions, pension funds and financing, costs for Department of Health, Education and Defense (51.6 billion). The public debt will instead absorb interest and amortization of 62 billion. Three times more than the salaries and pensions, and ten times more than the expenses for education will be.

 

4. Implications to the Society and Real Aims of the Austerity Programmes 

Although it is still early there is considerable evidence of the worsening social problem in Greece, as a result of the austerity policy imposed by the IMF and the EU.

4.1 Explosion Unemployment

Based on recent evidence of the Greek Statistical Service, the official unemployment rate in February 2011 amounted to 15.9% (affecting 787.229 people). Compared with last year this was increased by 30.1% (then hit 605,277 people) [1].

 

4.2 Flexibility in Labour Relations

According to statement by Minister L. Katseli, businesses in Greece using the new workplace, in 2010 necessitated the change of contract full-time flexible in a number greater by 55% compared with 2009.

4.3 Decreases in Salaries and Pensions

On the basis of a statement of the Governor of the Bank of Greece, George Provopoulos, 2010, in the first year implementation of the Memorandum wages in Greece fell by 14% and pensions by 11%. Also, the hourly labor costs in Greece in 2010 recorded a record drop of 6.5% when the EU-27 increased by 2% and the 17 euro zone increased by 1.4% (Eurostat, 42/2011).

4.4 Increases in Poverty

Based on data released last year by the Bank of Greece, the poverty rose by one quarter and now it reaches 25.07% of the population. Obviously, workers and the social majority did not benefit from the Memorandum, while the bourgeoisie was benefited by reversing gains of several decades.

Notable gains were recorded by foreign banks, in particular the Franco-German that had the highest exposure in Greek bonds. To corroborate recent evidence showing that while the beginning of the crisis involving the foreign banks in the Greek debt was around 150 billion, now stands at 50 billion. On the other hand European banks were from 115 to 40 million. More specifically, Germans and French had the greatest exposure to the Greek debt by 30 to 8 and 45 to 12 billion euros (BIS, 21 April 2010) respectively. As a result of this economic policy, the main creditors of Greece will not risk more than a possible cessation of payments that was initiated by the debtors. In this way, the IMF confirmed its role as negotiator and organizer of creditor’s cartel, just as had happened in Argentina (Cibils, Weisbrot and Kar, 2002).

All these measures were not only ineffective but also class-biased as the crisis deepens. Witnesses: Firstly, the increase in public debt of 127% in 2009, when decisions are taken on appeal to 160% of GDP when it is supposed to complete the memorandum. Secondly, the deterioration of the reliability of Greece with the explosion of interest in the secondary market and the continuing deterioration of credit rating agencies.

Table 2 below shows the trend of interest rates in the time since the adoption of the Memorandum.

 Table 2: Interest Rates in the Secondary Market for 2 years, 5 years, and 10 years – Greek Government Bonds

2y

5y

1

5 May 2010

14,91%

12,48%

10,17%

5 May 2011

25,28%

16,71%

15,51%

Source: Bloomberg Generic

 Thirdly, plans to restructure the debt and new loans will result in a failure of Greece to come to market in 2012.

 

5. Conclusions

In conclusion, the simplicity and the Memorandum have not been applied to overcome the debt crisis, but to change the balance between the forces of labor and capital. In this occasion, Greece deficits have been the testbed of the economic attack, which unleashed the hawk’s deficits (Polin, 2010). Also, the IMF, as in the case of Argentina and Southeast Asia, proved unable to manage the crisis (Cibils and Vuolo, 2007).

The only thing in reality the packet of measures achieves is an important change in the ownership of the debt, where the national debt of Greece is transferred from European bank accounts to labour class. The claim that fiscal austerity during a recession is “economically correct”, in reality is “economically incorrect” and is designed to avoid public criticism. As far as to why, that many dominant circles support today this catastrophic policy, is simple: those circles are concern for the purpose of the capital, less for the interest of the workers and the poor, but rather they identify their interest with those of the Wall Street and the City, and the higher classes. The obvious beneficiary from the ‘rescue packet’ of the Eurozone governments will not be the Greek workers and pensioners who suffer from extreme cuts and resection, but the financial centres.

6. An Alternative to the «Chemotherapy» of IMF-EU

In contrast to these measures a condition for overcoming the financial crisis and improve the position of the majority is to implement the following measures:

  •     Stop paying the debt with responsibility of the debtor on the basis of emergency (RMF, 2010),
  •     Exit from the Eurozone to halt the creation of deficits,
  •     Devaluation of the new national currency[2],
  •     Nationalisation of banks,
  •     Barriers to entry and exit of capital,
  •     Production restructuring of the economy.

This is a minimum set of measures on which the Greek society will leave from the position of Ulysses, who spent a decade to return from where it started, and will go in place of Prometheus, who pioneered the effect of helping all humanity.

7. References

Cibils, A., Weisbrot M., and K., Debayani, (2002), ‘Argentina since Default: The IMF and the Depression’, Center for Economic and Policy Research, Briefing Paper.

Cibils, Alan and R., L., Vuolo, (2007), ‘At Debt’s door: What can we learn from Argentina’s recent Debt Crisis and Restructuring’? Seattle Journal for Social Justice, Vol. 5, Issue 2.

EEAG (2011), Report on the European Economy, Governing Europe.

Eurostat (2011), Euro Area and EU27 Government Deficit, 60/2011.

Eurostat (2010), Taxation trends in the European Union, Main Results.

Eurostat (2011), Fourth quarter 2010 compared with fourth quarter, 42/2011.

IMF (2010), ‘A Historical Public Debt Database’, S. Ali Abbas, Nazim Belhocine, Asmaa El Ganainy and Mark Horton, WP/10/245,

IMF, (2010), ‘Greece: Staff Report on Request for Stand – By Arrangement’, Country Report, No.10/110.

Laeven, L., and F., Valencia (2010), ‘Resolution of Banking Crisis: The Good, the Bad and the Ugly’, IMF Working Paper, No. 10/146.

Pollin R., (2010), ‘Austerity is not a solution, why the Deficit Hawks are Wrong’, Challenge, November / December 2010.

RMF (2010), ‘The Eurozone between Austerity and Default’, RMF Occasional Report, September 2010.

SIPRI (2011), ‘Stockholm International Peace Research Institute Yearbook, 2011.


[1]               The explosion of unemployment is the most typical failure among many other false predictions of the IMF related to inflation, the depth of the recession, etc. For unemployment in particular the IMF forecasts that this year will fall only to 14.6% (IMF, May 2010).

[2]                 The option of leaving the euro and the depreciation in response to tackle the Greek tragedy is not displayed only by radical school of thoughts. It is referred for example from European Economic Advisory Group Report on the European Economy 2011: “The two options (exiting the euro and introducing a devalued drachma, the first and a radical internal depreciation, with Greek prices and wages falling sharply relative to those in the rest of the euro area, the second) impose very large costs and will not work quickly. Both will increase the burden of foreign debt expressed as a share of GDP and have dangerous effects on the balance sheets of many firms and financial institutions. An internal depreciation as large as required can certainly not be achieved without a painful and sustained contraction of the economy and higher unemployment. An external depreciation is likely to be preceded by rumours that can cause a bank run and lead to a currency crisis. There is therefore no alternative that is clearly more palatable than the other in every respect. The choice is between two evils” (EEAG Report, 2011).

(2nd International Conference in Political Economy: Neoliberalism and the Crises of Economic Science,

International Initiative for Promoting Political Economy (IIPPE), Instabul-Turkey, 20-22 May 2011)

“Where is the stability that should be provided by resorting to IMF – EU measures?”*

On the 9th May 2010 a joint team of IMF and European Committee negotiated a loan to the government of Greece. The amount of this loan and the effort required by the austerity programme is highly ambitious. In exchange for a programme of austerity to reduce the loan for Greece by 30 billion € (additional), it will receive 80 billion € in European bilateral loans and 30 billion € from the IMF in the next three years. The dominant opinion in Greek political circles supports strong cuts which will in exchange save the Greek economy from relying of the high cost of borrowing on the financial markets.

This report examines the detail of the adjustment programme of Greece and the leads to the opposite conclusion. In three years from now, Greece will face a heavier debt burden. Meanwhile, employment and economic growth and development will be sacrificed. The only thing in reality the packet achieves is an important change in the ownership of the debt, where the national debt of Greece is transferred from European bank accounts to European governments. The real proposal appears to be more an attempt to save the European banks, by freeing them from holding Greek debt which may lead to a potential bankruptcy. If the confidence of the market is not restored despite at the same time the Greek economy been pushed in to recession with double-digit unemployment and increasing poverty, what is the purpose of the rescue packet. My question, with many others, who or what is exactly being rescued?

The 110 billion € loan Greece is borrowing now from the IMF and European governments will be used (generally) to repay banks and institutional investors who are the owners of the Greek debt today. So, is not the purpose of the rescue packet related to a large transfer of debt from (generally) banks to state hands?

Banks, insurance companies and pension funds are the true beneficiaries. The probability of default on repayments and the amount of interests due should be excluded for the next three years. There is a clear European dimension to this. The main bulk (almost 80%) of Greece’s debt is not in the hands of Greek financial markets but in the accounts of the German, French and British banks. Europe and IMF don’t provide fresh financing to Greece but rather,  they are protecting the European financing system from debts up to 200 billion €, that could be caused by any Greek bankruptcy.

Curiously, almost 25% of the Greek debt belongs to British (and Irish) financing field, with the rest being held by mainly German and French interests. The obvious beneficiary from the rescue packet of the euro zone governments will not be the Greek workers and pensioners who will suffer from extreme cuts and resection, but the financial centres such as the City of London and others.

Globally the fiscal austerity programme and the delay in financial report in response to the worst financial crisis and deepest recession of the last 80 years, does not provide the improvement in economical return as claim by the supporters. These policies extent the continuation of income transfer on wealth from poor people to the rich and from the industrial section to the financial, insurance and real estate sections, which dominate increasingly in the USA and Europe. In spite of the fact of these policies exacerbate deprivation of the economy and raise possibility of another financial crisis.

The claim that fiscal austerity during a recession is “economically correct”, in reality is “economically incorrect” and is designed to avoid public criticism. As far as to why, that many government circles support today this catastrophic policy, is simple: those circles are concern for the purpose of the economy, less for the interest of the workers and the poor, but rather they identify there interest with those of the Wall Street and the City, and the higher classes.

After the compliments from the IMF, EU and the ECB, from the implantation of the terms of the rescue packet, the first optimistic predictions for the “progress of the Greek economy” by banks, economists and politicians have been heard. These predictions, amongst other, foresee the end of the crisis the second semester in 2011 and the comeback of Greece in the capital markets in the same year.

Previously it was consider that Greece would not be significantly affected by the global crisis. Because of the strong economy there would be no liquidity problem but instead a problem correct management of money which was in excess, that they was no requirement to turn to the IMF for help, that they would be no need to borrow from the capital market, that they would not need help from anybody etc.

Under the leadership of the IMF, the ECB and the major European powers are deciding Greece’s future the new measures created because of the current deep financial crisis exceed the current governments manifesto in terms of improving and altering the real economy in the greatest extreme for the last 40 years.

The truth is that is not necessary to look further that the nearing shopping centre to realise that the situation won’t improve in the coming months. However it is worth having a look at the numbers of the Greek economy and to compare with those of the 50 biggest countries in the world, to see the real situation in Greece compared to them.

Starting with the unemployment data, the unemployment rate in Greece reached 12% in May against 8,5% in corresponding month in 2009. This is the largest annual increase which has ever been recorded since records were kept. Compared with May 2009, the unemployed increased by (+43,2%) against 181.784 individuals, to 602.185. Compared to April, the unemployed increased by 5.206 individuals (+0.9%). It is most likely that this situation will continue to deteriorate until the end of the summer period, as a fresh labour force will enter the labour market. The trend is expected to continue to increase as long as the crisis continues.

The devastating effects of the policy implemented by the Troika is apparent for the following facts: the decline of industrial production by 4,5% in June, a decrease in building activity by 12%, the decline of tourism revenues by 16% in June etc. In addition also a decline in tax revenue as a result of the recession that began when the Greek economy took unpopular measures imposed by the Memorandum. Particularly illustrating the failure of the policy is the increase in the spread to a level close to 810 units! Where is the stability that should be provided by resorting to IMF – EU measures? The declared stability and better terms which were the ultimate aspiration for the “chemotherapy” imposed have not manifested themselves!

With the current rate of 12% unemployment however, Greece is in the 6th worst position in the world in unemployment rates, worse than countries such as Venezuela, Chile, Peru, Indonesia, Poland, Brazil, Mexico, Pakistan and others.

Greece is also the 6th worst in the world (among the 50 largest countries) in the reduction of GDP, while inflation is the 8th greatest and certainly the greatest in Europe.

As if all this isn’t enough, the prices of the Greek CDS premiums that have to be paid for those who want to cover the bankruptcy of the country (or speculating on this possibility) is the second highest in the world only less than Venezuela (which recently was higher). Furthermore, based on the CDS, Greece is the second more likely country in the world to become bankrupt, with a possibility of bankruptcy within the next 5 years of 50%.

Where is the hope for Greece a country that sees the basic economic and financing indices to be in the international top ten negative? As examples, the debt to GDP ratio is among the highest in the world (with the potential to grow much more readily) and the deficit is also dramatically high because there is no ability to have access to borrow funds at a reasonable cost, makes Greece unable to cope with it’s obligations, including trying to stimulate development and to submit to the financial and budgetary amounts of Nations such us USA and Germany.

Unfortunately, Greece has the second highest borrowing cost in the world, behind Pakistan only and far above that of South Africa, Indonesia, India, Mexico, Poland, Hungary, Thailand and others. Thus, while for example the extremely unstable political Thailand borrows for a term of 10 years at 3,4%, Malaysia 3,89% and the (third world) Peru 5,64%, the equivalent cost for Greece is 10,15%.

The question is simple: is there a magic wand, which can be used (otherwise would have been used that we do not find in the current crisis or to get ourselves away from it) for Greece to improve their economic situation in the next 12 months? If the first signs of “improvements are indeed seen”, why does the cost of borrowing remain at the pre-support rescue package levels, which are the second highest in the world?

Financial markets anticipate, in their pricing country’s capability to meet its obligation. Greece has been forced to rely on the IMF – EU “bail out” in order to borrow funding to meet our obligation at a reasonable cost. In the process, Greece has been obliged to instigate the most severe austerity package in our modern economic history (which has also been recognised by the IMF – EU). Why, therefore, is the cost of the “bail out” so high? Surely, in recognition of Greece’s efforts the IMF – EU should be available at a more reasonable cost than 10,15%.

At this cost there is an acute danger that the resulting recession in Greece will lead to the very situation it was meant to avoid – i.e. a default by Greece with the resultant effect it will have on the Euro…

*This paper was announced at the Meeting of NGO’s with the EFC Sub-Committee on IMF and related issues on 23 August 2010 in Brussels.

The socio-economic characteristics and consumer behaviour of economic immigrants in Athens, Greece

Helen Theodoropoulou and Kosmas C., Petros   (2007), The Socio-Economic Characteristics, Consumer behaviour, and Social Integration of Economic Immigrants in Athens, Greece”, Consumer Citizenship: Promoting New Responses, Building Bridges, Vol. 3, pp. 81 – 94.

 

Helen Theodoropoulou[1], Assistant Professor, Department of Home Economics and Ecology, Harokopio University of Athens, Greece

Petros C. Kosmas, Lecturer , Department of Public Administration and European Integration, Varna free University of Nicosia, Cyprus

Abstract

The present study is an empirical approach to examine the economic and social characteristics of economic immigrants in Athens, Greece, as well as the factors that influence their consumer behaviour and integration in the Greek society. Based on data, derived from a questionnaire survey of 273 immigrants randomly selected out of 957 registered economic immigrants of various nationalities living in Athens, the study examined the factors influencing the social integration of immigrants from the Greek society and their consumer behaviour. The sample population of the study composed of 122 women and 159 men. Their average age was 34.9 years old, their average income per capita was €756.3, and their average number of years of residence in Greece was 8.3 years. The factors influencing their social integration were analysed using a model of logistic regression. It was found that nationality exerts a significant influence on social integration. Immigrants from Eastern European countries showed higher percentage of accession than all the others. The length of residence, the personal relationship with the Greeks, which includes both the adoption of the Greek lifestyle and also the positive attitude of the Greeks towards them, exerts significant influence. The consumer behaviour of economic immigrants was analysed using least squares models. It was found that income exerts a positive influence on food expenditure and immigrants with higher education invest more money on their children education.

Key words: immigration; consumer behavior; integration; Greece

1. Introduction

Immigration is the temporary or permanent movement of people from one place to another. According to the neoclassical economic theory the reason for this movement is based on the supply and demand for labour force. People living in places where the labour supply is larger than the labour demand move to places where the local population cannot meet the labour demand in these places. On the other hand, according to the Marxist theory, immigration is due to the abject socio-economic conditions prevailing in a labour’s country of origin. In any way, immigrants move in search of better living conditions. Following the crumbling of the economies in the former Soviet block countries many immigrants moved to Western parts of Europe in search of jobs.

Many studies have shown concern with the processes through which societies and cultures are transformed as a result to immigration and with the reasons why people migrate to different areas. These studies have also been concerned with the role of the political conditions, climate, geography and religion as compared with social and historical circumstances of immigration. Generally, most studies report that the main reasons for immigration are the unemployment levels, the social discrimination and the poor quality of life that many people face in their countries (Iredale et all, 2003; Spencer, 2003; Edwards, 1989; Bade, 1987; Thomas, 1985; Castles and Kosack, 1985; Boehning, 1983).

Some nations are affected significantly by immigration because of the concomitant social and economic changes that come with it. Specifically, demographic changes increased the social and cultural diversity of many areas causing an expansion in the cultural and economic horizons of residents and also producing conflicts in interests, values and lifestyles. On the other hand, the economy of many countries is becoming more diversified as the service sector grows significantly because of the immigration. The dynamics of regional change and the uneven development observed in many countries have been the subject of many studies for immigration policy formulation and program implementation (Haug et all, 2002; Simon, 1999; Holmes, 1996; Jones, 1990).

Devising an immigration policy involves making political choices to ease community adjustments to structural economic changes. The development of these policies requires information on regional trends in economic and social conditions. This information can be drawn from appropriate indicators describing the immigrants life and the conditions of their adjustment in the areas where they settle (Castles and Miller, 2003; King and Black, 1997). More specifically, Greece was the place of destination for many immigrants especially from the Balkan countries (Siadima, 2001). Many of these immigrants seeking a better future, they collectively abandoned their homelands and came to establish themselves in Greece, creating new realignments in its economy. Thus the need for a study of their consumer behaviour is imperative.

Immigrant consumer behaviour is an important research area in a number of fields including marketing, geography, and ethnic studies. While the distinct consumption patterns within an ethnic minority group have always been noticed, it has not until recently received significant attention from either academics or market practitioners. The catalyst for the increasing interest in immigrant consumption is the fast changing ethnic landscape in many metropolitan areas due to accelerated international migration. The size, geographical concentration, and purchasing power of many ethnic populations offer both opportunities and challenges to market practitioners. In academia, recent studies have examined the distinct characteristics and consumption patterns of ethnic minority populations, of which a large proportion are immigrants. Much attention has been focused on the relationship between ethnicity, ethnic identity, and consumption (Donthu and Cherian, 1992, 1994; Venkatesh, 1995; Hui et al., 1998; Rossiter and Chan, 1998; Laroche et al., 1998; Chung and Fischer, 1999), and the impact of acculturation and assimilation on consumption practices (Webster, 1994; Lee and Tse, 1994; Eastlich and Lotz, 2000; Laroche and Tomiuk, 2001).  Under the primordial view ethnicity is seen as a static demographic classification based on last name, common origin, race, language, or religion (Stayman and Deshpande, 1989; Webster, 1994). The focus of the academic research examining the consumption patterns and consumer behaviour of immigrants is either the relationship between ethnicity and consumer expenditure patterns for broad categories of consumer goods such as food (Wagner and Soberon – Ferer, 1990) and transportation (Paulin, 1998; Fan and Zuiker, 1994) or the relationship between ethnicity and family budgeting for typical household product categories (Fan and Lewis, 1990). Combining of literature concerning consumption and ethnicity, ethnic economies and consumer spatial behaviour offers a new conceptual framework to describe and analyse immigrant consumer behaviour. The meaning of researching the consumer behaviour of economic immigrants is an important question since economic immigrants constitute also a respectable part of Greek society and for this reason, the determination and the recording of their behaviour are judged necessary.

The objective of the present study was to examine the economic and social characteristics of economic immigrants in Athens, Greece, as well as the factors that influence their consumer behaviour and integration in the Greek society.

2. Data and Method

A questionnaire survey of economic immigrants living in Athens, Greece was carried out during 2005. Investigators visited randomly 957 economic immigrants in the areas where they were working and completed the questionnaires on location. A total of 273 responses were collected.

The composition of the questionnaire was based on international studies (Deshpande et al., 1986; Douthu and Cherian, 1992, 1994; Venkatesh, 1995; Hui et Al, 1998; Rossiter and Chan, 1998; Laroche et Al, 1998; Chung and Fischer, 1999; Wang 2004). The questionnaire comprised five sections namely demographic, educational, employment characteristics, reasons for immigration, and living conditions. The data collected were analysed by using descriptive statistics for calculating the means and standard deviations of continuous variables and the frequencies and percentages of discrete variables. The factors that influence the social integration of economic immigrants in Greece studied, by using logistic regression, while for the investigation of consumer behaviour of economic immigrants in Athens – Greece this study developed least squares models (OLS).

3. Results

 

Personal Characteristics

The sample of immigrants was made up of 273 individuals among whom 122 were women and 159 were men. The average age of the respondents was 34.9 years ranging between 19 and 80 years of age. The ethnic composition of the 273 respondents was as follows: 48.3% were of Albanian origin and constitute the overwhelming majority of the sample, 11% were from Arab countries, 7.7% from Romania, 7.4% from China, 6.6% from Bulgaria and 4.7% from Africa. In addition, 4.4% were from Russia and the Ukraine, 4% from the Philippines, 3.7% from Georgia, 1.5% from Poland and just barely 0.7% were from Serbia.

The religious composition of the sample was as follows: The largest segment of the whole sample was Orthodox Christians (55.3%) and 28.6% were Muslims and only 7.7% Catholics. Seven percent of the respondents were Buddhists and on the whole a very small percentage 1.1% were Protestants and Confucians.

The geographical distribution of the immigrants according to their place of residence was as follows: 50.5% of the respondents resided in Central Athens, 30.4% in the Southern Suburbs, 7.7% in the Northern Suburbs and 5.1% in the Western Suburbs. The remaining 6.2% of the respondents resided in  the remaining area of Attiki prefecture.

The educational level of the immigrants was mostly high school (50.6%), while for 25.1% was high education and for 16.8% was elementary school. Most of the individuals were not married (56.6%) and the number of children per responder was mostly two (27.5%), while for 14.7% from the total sample was one and for 8.4% was three. 43.2% of the total sample were sending their children to school.

From the entire sample of economic immigrants 43.2% send their children to school. From that portion 78.8% send them to public schools and 5.5% to private schools. Eighty percent declared that they send their children to a Greek school, while just 6.0% send them to a school of their ethnic origin.

 

Social Characteristics

Most of the individuals of the sample used their mother tongue at home. Ninety seven percent of the responders watch television and from those 90.8% watch Greek programs, while almost half of them (40.7%) watch also foreign programs. Eighty eight percent listen to Greek radio and 37.7% of them listen also to radios of their ethnic origin. Eighty four percent of the sample declared that they read newspapers. Sixty one percent answered that they read the Greek press and 63.4% of them read also foreign papers.

Most of immigrants (70.3%) keep up the traditions and customs of their country of origin and 74.5% follow the traditions and customs of Greece. Sixty two percent of the total sample felt integrated in the Greek society. From the total sample 37.7% answered that they participate in cultural activities, 45.4% in social activities, 22.0% in political activities and 41.4% religion activities. To the question if they have Greek friends 82.8% answered that they have. To the question if they consume or cook Greek traditional food 89.7% answered that they do. To the question if they feel satisfied by the general behaviour from the natives towards them 89.7% answered positively.

Cross tabulation analysis (χ2) showed that the more immigrants spoke the Greek language the less they reported problems in their social integration, unemployment, or economic exploitation (p<0.00).

 

 

 

Economic Characteristics

The average monthly income per capita of the respondents was €756.3, while the average monthly family income was €1.053.  Immigrants considered their monthly income non satisfactory (55.0%). Eighty three percent save up to 500€ per month. Most of the individuals were employed in construction activities (36.6%) and in household activities (39.9%). Furthermore, 93.8% of the respondents worked an average of 8.3 hours per day and 6.0 days per week. Most of the immigrants answered that they were in the same job for the last 10 years (84.0%). The percentage of the respondents who have national health and retirement coverage was 66.3%. Thirteen percent were homeowners, 75.8%, were in rent, and 11.4% were guests in relatives and friends. Sixty five percent had deposit accounts and 8.8% had loans. From those who have taken loans, 45.8% had taken a loan to buy a home and 54.2% had taken a consumption loan. The percentage of the immigrants who answered that they invest their money was 19.4%, out of which 21.2% invest in the bond market, 11.6% invest in the stock exchange and 92.3% invest in real estate.

Cross tabulation analysis (χ2) showed that immigrants’ satisfaction with their income level depended on how long they had worked in Greece. The longer they worked in Greece the more satisfied they were from their income (p<0.00).

Table 1 shows the average expenditure of immigrants. Expenditure for food was 228.50€ which was the 21.71% of the average family income. According to the survey of the National Statistic Service of Greece, 13.2% of the family income goes for food expenditures, which is less by 8.5 units than that of the immigrants.

 

Table 1. Expenditure averages

Categories of Expenditures  

N

Average Expenditure(€) (%) of Income per Family Sample

Food

273 228.50 21.71
Education 176 142.79 13.56
Clothing 273 92.03 8.74
Transportation 273 62.02 5.89
Entertainment 273 87.19 8.28
New Technologies 273 76.13 7.23
Social integration in the Greek society

Initially, a binary logistic regression was analyzed to investigate the direct effects of immigrants characteristics variables on the social integration in the Greek society. The dependent variable was measured based on the sample’s responses to a 2-point scale: yes, no to the following statement: » Do you feel integrated or not in the Greek society». The independent variables included the sex of individuals, ethnicity, length of residence in Greece, education, usage of mother tongue, usage of TV, friendship with Greeks, use of the customs of Greece and satisfaction from general behaviour from the natives towards the immigrants.

The equation for the effects of immigrants characteristics variables on the social integration is the following:

Ln(Social integration)= -7,114***+ 0,524Sex +0,997** Nationality + 0,724 Education +0,043 Residency – 0,366Mother tongue +0,851Greek TV + 1,481***Greek Friends +0,989*** Customs of Greece +2,515***Greek Attitude + ei

Where: (*** P-value<0.01 and ** P-value<0.05)

Table 2. List of variables used in the social integration logistic regression model

Variable Type Description
Sex of immigrants Nominal 1 if respondent are men; 0 if they are women
Nationality Nominal 1 if they are from Eastern European Countries; 0 otherwise
Education Nominal (1if they have bachelor & above; 0 otherwise
Residency Scale Years of Residence in Greece
Mother tongue Nominal 1 if immigrants use of mother tongue with family; 0 otherwise
Greek TV Nominal 1 if there watch Greek TV; 0 otherwise
Greek Friends Nominal 1 if they have Greek Friends; 0 otherwise
Customs of Greece Nominal 1 if immigrants follow and adapt the traditions and customs of Greece; 0 otherwise
Greek Attitude Nominal 1 if immigrants are satisfied from the general behaviour from the natives; 0 otherwise

The analysis of the regression model showed that 90,6% of the variance of Social integration was significantly explained by the immigrants characteristics variables. Specifically, Social integration was significantly associated with Nationality (p<0,05), Greek Friends, Greek Attitude and Customs of Greece (p<0,01). Nationality, Greek Friends, Customs of Greece and Greek Attitude were associated with 0,99; 71,481; 2,515 increase of Social integration respectively. These results suggest as Nationality exerts significant statistical influence on social integration. Immigrants from Eastern European countries show higher percentage of integration than all the others. The personal relationship with the Greeks, which includes both the adoption of the Greek lifestyle and also the positive attitude of the Greeks towards them, exerts significant statistical influence on social integration.

Expenditures on Food Product

In the current model the method of Ordinary Least Squares Estimators (O.L.S.) has been used. Expenditure on food product is the dependent variable. It is a variable containing the amount of household expenditure for food products from immigrants. Independent variables include the age of individuals, education, income, children in the family, evaluation store quality, evaluation store price, choice of Greek shops, choice of street markets (Plath and Stevenson, 2005).

The equation for the effects of immigrants characteristics variables on the expenditure on food product is the following:

Ln(Expenditure on food product)= 1.619*** – 0,002Age + 0,037Education +

0,375*** ln Income + 0,361***Children + 0,325***Quality + 0,315**Price – 0,185*Greeks Shop + 0,176*Street Market +ui

Where: (*** P-value<0.01; **P-value<0.05 and * P-value<0.1)

Table 3. List of variables used in the expenditure on food product equation

Variable Type Description
Age Scale The age of responders
Education Nominal 1 if they have bachelor & above; 0 otherwise
Income Scale The logarithmic monthly income per capita
Children Nominal 1 if the family have children; 0 otherwise
Quality Nominal 1 if immigrants buy higher quality products; 0 otherwise
Price Nominal 1 if immigrants buy from low prices stores; 0 otherwise
Greek  Shop Nominal 1 if immigrants buy from local stores; 0 otherwise
Street Market Nominal 1 if immigrants buy from street market stores; 0 otherwise

The analysis of the above model showed that 27% of the variance of Expenditure on food product was significantly explained by the immigrants characteristics variables. Income exerts a positive influence on food expenditure. When income increases by 1% then food expenditure increases by 37%. Families with children spend more money on food than families without children. Also, immigrants who prefer high quality products, or choose to shop in low price markets, or choose local shops and street markets tend to spend more on food products than those who do not.

Expenditures on Education

Also, in the current model the method of Ordinary Least Squares Estimators (O.L.S.) has been used. Expenditure on education is the depended variable. It is a variable containing the amount of household expenditure for education. Independent variables include the level of education, religion, income, number of children and manual work.

The equation for the effects of immigrants characteristics variables on the expenditure on education is the following:

Ln(Expenditure on education)= 1,326* + 0,464***Education + 0,255** Religion +  0,333***ln Income + 0,301***Children – 0,202 Manual Work +ui

 

Where: (*** P-value<0.01; **P-value<0.05 and * P-value<0.1)

Table 4. List of variables used in the expenditure on education model

Variable Type Description
Education Nominal 1 if they have bachelor & above; 0 otherwise
Religion Nominal 1 if they are Christians, 0=other;
Income Scale The logarithmic monthly income per capita
Children Scale Number of children
Manual Work Nominal 1 if immigrants are manual worker; 0 otherwise

 

The analysis of the above model showed that 23% of the variance of Expenditure on education was significantly explained by the immigrants characteristics variables. Immigrants with higher educational background invest more money on the education of their children than those who have a lower level of education. Christians spend more on child educational purposes than immigrants from other religions. When income increases by 1%, the educational expenditure increases by 24%. As child numbers increase in a family, educational expenses also increase. Manual immigrant workers spend less on child education than those working with their intellect.

4. Conclusions

Greece was the place of destination for many immigrants especially from the Balkan countries during the 1990s. Unfortunately, the legal framework regarding immigration to Greece at that time was inadequate to confront the flux of immigrants and many immigrants lived in Greece illegally. Appropriate law measures were taken in 2001 that specified the requirements for the entrance and the establishment of immigrants in Greece.

Factors related to the immigrants’ characteristics such as the knowledge of the Greek language, the better educational level, the length of residence and the personal relationship with the Greeks, adoption to the Greek lifestyle were found to affect the social and economical integration of the immigrants in the Greek way of life.

Apparently, immigrants with a good knowledge of the language, longer residency, and better education achieve a better treatment from the Greek society. Therefore, immigrants of low skills and educational level will not be able to integrate in the Greek society. For that reason, it is significant for the immigration policy to take into account those weaknesses and to help these people to adapt to their new life for the sake of a good and productive Greek socio-economic life through special vocational courses mainly to teach the Greek language.

5. References

Bade J.J. (1987), Population labor and migration in 19th – and 20th – century. Germany, New York: Berg Publishing

Boehing W.R. (1983), The ILO and contermporary International economic migration, International Migration Review, Vol X.

Castles S. and Kosack G. (1985), Immigrant workers and class structure in Western Europe, Oxford University Press.

Castles S. and Miller M.J. (2003), The Age of Migration, Third edition, New York: Palgrave Macmillan Publishing.

Chung, E. and Fischer E., (1999), “It’s Who You Know: Intracultural differences in Ethnic Product Consumption”, Journal of Consumer Marketing, Vol. 16, pp. 482 – 501.

Deshpande, R., W.D. Hoyer and N. Donthu, (1986), “The Intensity of Ethnic Affiliation: A Study of the Sociology of Hispanic Consumption”, Journal of Consumer Research, Vol. 13, No. 2 (Semptember), pp. 214- 220.

Donthu, N. and Cherian J., (1992), “Hispanic Coupon Usage: The Impact of Strong and Weak Ethnic Identification”, Journal of Psychology and Marketing, Vol. 13, pp. 501 – 510.

Donthu, N. and Cherian J., (1994), “Impact of Strength of Ethnic Identification on Hispanic Shopping Behavior”, Journal of Retailing, Vol. 70, pp. 383 – 393.

Edwards J. (1989), Language, Society and Identity, New York: Blackwell Publishing.

Eastlick, M. and Lotz S., (2000), “Objective and Multidimensional Acculturation Measures: Implications for Retailing to Hispanic Consumers”, Journal of Retailing and Consumer Services, Vol. 7, pp. 149 – 160.

Fan J. and Lewis J., (1999), “Budget Allocation Patterns of African Americans”, Journal of Consumer Affairs, Vol. 33, pp. 134 – 164.

Fan J. and Zuiker V., (1994), “Budget Allocation Patterns of Hispanic Households”, Journal of Consumer Affairs, Vol. 33, pp. 89 – 96.

Haug W., Compton P., Courbage Y. (2002), The demographic characteristics of immigrant populations, Council of Europe Publishing.

Holmes C. (1996), Migration in European history Volume II, UK: The International Library of Studies In Immigration- Edward Elgar Publishing.

Hui, M.K., Laroche M. and Kim C., (1998), “A Typology of Consumption Based on Ethnic Origin and Media Usage”, European Journal of Marketing, Vol. 32, pp. 868 – 883.

Iredale R., Hawksley Ch., Castles S. (2003), Migration in the Asia Pacific. Population, Settlement and citizenship Issues, USA: Edward Elgar Publsihing.

Jones H.R. (1990), Population geography, New York: Paul Chapman.

King R. and Black R., (1997), Southern Europe and the new immigrations, Great Britain: Sussex Academic press.

Laroche, M., Kim C. and Tomiuk M., (1998), “Italian Ethnic Identity and its Relative Impact on the Consumption of Convenience and Traditional Foods”, Journal of Consumer Research, Vol. 15, pp. 125 – 151.

Lee, W. and Tse, D.K., (1994), “Changing media consumption in a new home: acculturation patterns among Hong Kong immigrants to Canada”, Journal of Advertising, Vol. 23, pp. 57–70.

Plath, A. and Stevenson T., (2005), “Financial Services and Consumption Behavior Across Hispanic American Consumers”, Journal of Business Research, Vol., 58, pp. 1089 – 1099.

Rossiter, J.R., A.M. Chan., (1998), ‘Ethnicity in Business and Consumer Behavior”, Journal of Business Research¸ Vol. 42, pp. 127 – 134.

Siadima M. (2001), Immigration in Greece during the 1990’s: an overview, King’s College London.

Simon J.L. (1999), The economics consequences of immigration, University of Michigan press.

Spencer S. (2003), The politics of Migration, Managing opportunity, conflict and change, Institute for public policy research, Blackwell pulishing.

Stayman, D.M. and R. Deshpande, (1989), “Situational Ethnicity and Consumer Behavior”, Journal of Consumer Research, Vol. 16, pp. 361 – 371.

Thomas B. (1985), The economics of international migration, London: Mac-millian Publishing.

Venkatesh, A., (1995), “Ethnoconsumerism: A New Paradigm to Study Cultural and Cross – Cultural Consumer Behavior”, In: Costa, J.A., Bamossy, G.J. (Eds.), Marketing in a Multicultural World, Ethnicity, Nationalism, and Cultural Identity. Sage Publication, Thousand Oaks, pp. 26 – 27.

Wagner, J. and Soberon – Ferrer H., (1990), “The Effect of Ethnicity on Selected Household Expenditures”, Journal of Social Science, Vol., 21, pp. 181 – 198.

Wang, L., (2004), “An Investigation of Chinese Immigrant Consumer Behaviour in Toronto, Canada”, Journal of Retailing and Consumer Services, Vol. 11, pp. 307 – 320.

Webster, C., (1994), “Effects of Hispanic ethnic identification on marital roles in the purchase decision process”, Journal of Consumer Research, Vol. 21, pp. 319–331.

 

 


[1] Contact information: Department of Home Economics and Ecology, Harokopio University of Athens 70 El. Venizelou, 17671 Athens, Greece. E-mail: etheodo@hua.gr

The Social and Economic Characteristics of Immigrants in Athens, Greece.

Τhe 3rd Hellenic Observatory PhD Symposium on Contemporary Greece: Structures, Context and Challenges, Hellenic Observatory, European Institute, London School of Economics June 14-15, 2007, με θέμα:

The Social and Economic Characteristics of Immigrants in Athens, Greece.


Abstract

The present study is an empirical approach to examine the economic and social characteristics of economic immigrants in Athens, Greece, as well as the factors that influence their consumer behaviour and integration in the Greek society. Based on data, derived from a questionnaire survey of 273 immigrants randomly selected out of 957 registered economic immigrants of various nationalities living in Athens, the study examined the factors influencing the social integration of immigrants from the Greek society and their consumer behaviour. The sample population of the study composed of 122 women and 159 men. Their average age was 34.9 years old, their average income per capita was €756.3, and their average number of years of residence in Greece was 8.3 years. The factors influencing their social integration were analysed using a model of logistic regression. It was found that nationality exerts a significant influence on social integration. Immigrants from Eastern European countries showed higher percentage of accession than all the others. The length of residence, the personal relationship with the Greeks, which includes both the adoption of the Greek lifestyle and also the positive attitude of the Greeks towards them, exerts significant influence. The consumer behaviour of economic immigrants was analysed using least squares models. It was found that income exerts a positive influence on food expenditure and immigrants with higher education invest more money on their children education.

Key words: immigration; consumer behavior; integration; Greece

1. Introduction

Immigration is the temporary or permanent movement of people from one place to another. According to the neoclassical economic theory the reason for this movement is based on the supply and demand for labour force. People living in places where the labour supply is larger than the labour demand move to places where the local population cannot meet the labour demand in these places. On the other hand, according to the Marxist theory, immigration is due to the abject socio-economic conditions prevailing in a labour’s country of origin. In any way, immigrants move in search of better living conditions. Following the crumbling of the economies in the former Soviet block countries many immigrants moved to Western parts of Europe in search of jobs.

Many studies have shown concern with the processes through which societies and cultures are transformed as a result to immigration and with the reasons why people migrate to different areas. These studies have also been concerned with the role of the political conditions, climate, geography and religion as compared with social and historical circumstances of immigration. Generally, most studies report that the main reasons for immigration are the unemployment levels, the social discrimination and the poor quality of life that many people face in their countries (Iredale et al, 2003; Spencer, 2003; Edwards, 1989; Bade, 1987; Thomas, 1985; Castles and Kosack, 1985; Boehning, 1983).

Some nations are affected significantly by immigration because of the concomitant social and economic changes that come with it. Specifically, demographic changes increased the social and cultural diversity of many areas causing an expansion in the cultural and economic horizons of residents and also producing conflicts in interests, values and lifestyles. On the other hand, the economy of many countries is becoming more diversified as the service sector grows significantly because of the immigration. The dynamics of regional change and the uneven development observed in many countries have been the subject of many studies for immigration policy formulation and program implementation (Haug et al, 2002; Simon, 1999; Holmes, 1996; Jones, 1990).

Devising an immigration policy involves making political choices to ease community adjustments to structural economic changes. The development of these policies requires information on regional trends in economic and social conditions. This information can be drawn from appropriate indicators describing the immigrants life and the conditions of their adjustment in the areas where they settle (Castles and Miller, 2003; King and Black, 1997). More specifically, Greece was the place of destination for many immigrants especially from the Balkan countries (Siadima, 2001). Many of these immigrants seeking a better future, they collectively abandoned their homelands and came to establish themselves in Greece, creating new realignments in its economy. Thus the need for a study of their consumer behaviour is imperative.

Immigrant consumer behaviour is an important research area in a number of fields including marketing, geography, and ethnic studies. While the distinct consumption patterns within an ethnic minority group have always been noticed, it has not until recently received significant attention from either academics or market practitioners. The catalyst for the increasing interest in immigrant consumption is the fast changing ethnic landscape in many metropolitan areas due to accelerated international migration. The size, geographical concentration, and purchasing power of many ethnic populations offer both opportunities and challenges to market practitioners. In academia, recent studies have examined the distinct characteristics and consumption patterns of ethnic minority populations, of which a large proportion are immigrants. Much attention has been focused on the relationship between ethnicity, ethnic identity, and consumption (Donthu and Cherian, 1992, 1994; Venkatesh, 1995; Hui et al., 1998; Rossiter and Chan, 1998; Laroche et al., 1998; Chung and Fischer, 1999), and the impact of acculturation and assimilation on consumption practices (Webster, 1994; Lee and Tse, 1994; Eastlich and Lotz, 2000; Laroche and Tomiuk, 2001).  Under the primordial view ethnicity is seen as a static demographic classification based on last name, common origin, race, language, or religion (Stayman and Deshpande, 1989; Webster, 1994). The focus of the academic research examining the consumption patterns and consumer behaviour of immigrants is either the relationship between ethnicity and consumer expenditure patterns for broad categories of consumer goods such as food (Wagner and Soberon – Ferer, 1990) and transportation (Paulin, 1998; Fan and Zuiker, 1994) or the relationship between ethnicity and family budgeting for typical household product categories (Fan and Lewis, 1990). Combining of literature concerning consumption and ethnicity, ethnic economies and consumer spatial behaviour offers a new conceptual framework to describe and analyse immigrant consumer behaviour. The meaning of researching the consumer behaviour of economic immigrants is an important question since economic immigrants constitute also a respectable part of Greek society and for this reason, the determination and the recording of their behaviour are judged necessary.

The objective of the present study was to examine the economic and social characteristics of economic immigrants in Athens, Greece, as well as the factors that influence their consumer behaviour and integration in the Greek society.

2. Data and Method

A questionnaire survey of economic immigrants living in Athens, Greece was carried out during 2005. Investigators visited randomly 957 economic immigrants in the areas where they were working and completed the questionnaires on location. A total of 273 responses were collected.

The composition of the questionnaire was based on international studies (Deshpande et al., 1986; Douthu and Cherian, 1992, 1994; Venkatesh, 1995; Hui et Al, 1998; Rossiter and Chan, 1998; Laroche et al, 1998; Chung and Fischer, 1999; Wang 2004). The questionnaire comprised five sections namely demographic, educational, employment characteristics, reasons for immigration, and living conditions. The data collected were analysed by using descriptive statistics for calculating the means and standard deviations of continuous variables and the frequencies and percentages of discrete variables. The factors that influence the social integration of economic immigrants in Greece studied, by using logistic regression, while for the investigation of consumer behaviour of economic immigrants in Athens – Greece this study developed least squares models (OLS).

3. Results

Personal Characteristics

The sample of immigrants was made up of 273 individuals among whom 122 were women and 159 were men. The average age of the respondents was 34.9 years ranging between 19 and 80 years of age. The ethnic composition of the 273 respondents was as follows: 48.3% were of Albanian origin and constitute the overwhelming majority of the sample, 11% were from Arab countries, 7.7% from Romania, 7.4% from China, 6.6% from Bulgaria and 4.7% from Africa. In addition, 4.4% were from Russia and the Ukraine, 4% from the Philippines, 3.7% from Georgia, 1.5% from Poland and just barely 0.7% were from Serbia.

The religious composition of the sample was as follows: The largest segment of the whole sample was Orthodox Christians (55.3%) and 28.6% were Muslims and only 7.7% Catholics. Seven percent of the respondents were Buddhists and on the whole a very small percentage 1.1% were Protestants and Confucians.

The geographical distribution of the immigrants according to their place of residence was as follows: 50.5% of the respondents resided in Central Athens, 30.4% in the Southern Suburbs, 7.7% in the Northern Suburbs and 5.1% in the Western Suburbs. The remaining 6.2% of the respondents resided in the remaining area of Attiki prefecture.

The educational level of the immigrants was mostly high school (50.6%), while for 25.1% was high education and for 16.8% was elementary school. Most of the individuals were not married (56.6%) and the number of children per responder was mostly two (27.5%), while for 14.7% from the total sample was one and for 8.4% was three. 43.2% of the total sample were sending their children to school.

From the entire sample of economic immigrants 43.2% send their children to school. From that portion 78.8% send them to public schools and 5.5% to private schools. Eighty percent declared that they send their children to a Greek school, while just 6.0% send them to a school of their ethnic origin.

Social Characteristics

Most of the individuals of the sample used their mother tongue at home. Ninety seven percent of the responders watch television and from those 90.8% watch Greek programs, while almost half of them (40.7%) watch also foreign programs. Eighty eight percent listen to Greek radio and 37.7% of them listen also to radios of their ethnic origin. Eighty four percent of the sample declared that they read newspapers. Sixty one percent answered that they read the Greek press and 63.4% of them read also foreign papers.

Most of immigrants (70.3%) keep up the traditions and customs of their country of origin and 74.5% follow the traditions and customs of Greece. Sixty two percent of the total sample felt integrated in the Greek society. From the total sample 37.7% answered that they participate in cultural activities, 45.4% in social activities, 22.0% in political activities and 41.4% religion activities. To the question if they have Greek friends 82.8% answered that they have. To the question if they consume or cook Greek traditional food 89.7% answered that they do. To the question if they feel satisfied by the general behaviour from the natives towards them 89.7% answered positively.

Cross tabulation analysis (χ2) showed that the more immigrants spoke the Greek language the less they reported problems in their social integration, unemployment, or economic exploitation (p<0.00).

Economic Characteristics

The average monthly income per capita of the respondents was €756.3, while the average monthly family income was €1.053.  Immigrants considered their monthly income non satisfactory (55.0%). Eighty three percent save up to 500€ per month. Most of the individuals were employed in construction activities (36.6%) and in household activities (39.9%). Furthermore, 93.8% of the respondents worked an average of 8.3 hours per day and 6.0 days per week. Most of the immigrants answered that they were in the same job for the last 10 years (84.0%). The percentage of the respondents who have national health and retirement coverage was 66.3%. Thirteen percent were homeowners, 75.8%, were in rent, and 11.4% were guests in relatives and friends. Sixty five percent had deposit accounts and 8.8% had loans. From those who have taken loans, 45.8% had taken a loan to buy a home and 54.2% had taken a consumption loan. The percentage of the immigrants who answered that they invest their money was 19.4%, out of which 21.2% invest in the bond market, 11.6% invest in the stock exchange and 92.3% invest in real estate.

Cross tabulation analysis (χ2) showed that immigrants’ satisfaction with their income level depended on how long they had worked in Greece. The longer they worked in Greece the more satisfied they were from their income (p<0.00).

Table 1 shows the average expenditure of immigrants. Expenditure for food was 228.50€ which was the 21.71% of the average family income. According to the survey of the National Statistic Service of Greece, 13.2% of the natives family income goes for food expenditures, which is less by 8.5 units than that of the immigrants. This finding shows empirically that immigrants in Greece have less quality of life.

Table 1: Expenditure averages

 

Categories of

Expenditures

 

N

Average Expenditure per Family Sample 

(€)

(%)  

of Income per Family Sample

(%)  

of Income per Family of Natives

Food

273 228.50 21.71 13.2%
Education 176 142.79 13.56 15,3%
Clothing 273 92.03 8.74 6,0%
Transportation 273 62.02 5.89 14.7%
Entertainment 273 87.19 8.28 10.0%
New Technologies 273 76.13 7.23 10/0%
Social Integration in the Greek Society

Initially, a binary logistic regression was analyzed to investigate the direct effects of immigrants characteristics variables on the social integration in the Greek society. The dependent variable was measured based on the sample’s responses to a 2-point scale: yes, no to the following statement: » Do you feel integrated or not in the Greek society». The independent variables included the sex of individuals, ethnicity, length of residence in Greece, education, usage of mother tongue, usage of TV, friendship with Greeks, use of the customs of Greece and satisfaction from general behaviour from the natives towards the immigrants.

Τhe key logistic regression is therefore:

ODDS Social integration = b0+ b1 Sex +b2 Dethn + b3 Dedu + b4 YOfLInG + b5 MLFamily + b6WGrChan + b7 GrFriend +

+ b8 COfGr +b9 GrAtt + ei

Table 2. List of variables used in the social integration logistic regression model

Variable Type Description
Sex of immigrants Nominal 1 if respondent are men; 0 if they are women
Nationality Nominal 1 if they are from Eastern European Countries; 0 otherwise
Education Nominal (1if they have bachelor & above; 0 otherwise
Residency Numeric Years of Residence in Greece
Mother tongue Nominal 1 if immigrants use of mother tongue with family; 0 otherwise
Greek TV Nominal 1 if there watch Greek TV; 0 otherwise
Greek Friends Nominal 1 if they have Greek Friends; 0 otherwise
Customs of Greece Nominal 1 if immigrants follow and adapt the traditions and customs of Greece; 0 otherwise
Greek Attitude Nominal 1 if immigrants are satisfied from the general behaviour from the natives; 0 otherwise

The equation for the effects of immigrants characteristics variables on the social integration is the following is analyzed in table 3:

Table 3: The effects of immigrants characteristics variables on the social integration

Variables Model I Odds Ratio
Constant -7,114*** 

(-5,83)

Sex 0,524 

(1,41)

1,69
Dethn 0,997** 

(2,17)

2,71
Dedu 0,724 

(1,57)

2,06
YofLInG 0,043 

(0,90)

1,04
MLFamily -0,366 

(-0,52)

0,69
WgrChan 0,851 

(1,27)

2,34
GrFriend 1,481*** 

(2,86)

4,40
CofGr 0,989*** 

(5,04)

2,69
GrAtt 2,515*** 

(5,84)

12,37
Log-Likelihood -100,024
Hosmer-Lemeshow 8,239
R 90,6%
N 273
*** Denotes significance p-value < 0,01 and 

** Denotes significance p-value < 0,05

* Denotes significance p-value < 0,1

The analysis of the regression model showed that 90,6% of the variance of Social integration was significantly explained by the immigrants characteristics variables. Specifically, Social integration was significantly associated with Nationality (p<0,05), Greek Friends, Greek Attitude and Customs of Greece (p<0,01). Nationality, Greek Friends, Customs of Greece and Greek Attitude were associated with 0,99; 71,481; 2,515 increase of Social integration respectively. These results suggest as Nationality exerts significant statistical influence on social integration. Immigrants from Eastern European countries show higher percentage of integration than all the others. The personal relationship with the Greeks, which includes both the adoption of the Greek lifestyle and also the positive attitude of the Greeks towards them, exerts significant statistical influence on social integration.

Expenditures on Food Product

In the current model the method of Ordinary Least Squares Estimators (O.L.S.) has been used. Expenditure on food product is the dependent variable. It is a variable containing the amount of household expenditure for food products from immigrants. Independent variables include the age of individuals, education, income, children in the family, evaluation store quality, evaluation store price, choice of Greek shops, choice of street markets (Plath and Stevenson, 2005).

Τhe key multivariate regression is therefore:

LnΕxpfood = b0 + b1Age + b2Dedu + b3lnY + b4Hkids + b5CrQualit

+ b6CrPrice + b7ChGrShop + b8StMarket+ui

Table 4. List of variables used in the expenditure on food product equation

Variable Type Description
Age Scale The age of responders
Education Nominal 1 if they have bachelor & above; 0 otherwise
Income Numeric The logarithmic monthly income per family
Children Nominal 1 if the family have children; 0 otherwise
Quality Nominal 1 if immigrants buy higher quality products; 0 otherwise
Price Nominal 1 if immigrants buy from low prices stores; 0 otherwise
Greek  Shop Nominal 1 if immigrants buy from local stores; 0 otherwise
Street Market Nominal 1 if immigrants buy from street market stores; 0 otherwise

The equation for the effects of immigrants characteristics variables on the expenditure on food product is the following is analyzed in table 5:

Table 5: The effects of immigrants characteristics variables on food expenditures

Variables

Model ΙΙ

Constant 1.619*** 

(3,44)

Age

-0,002 

(-0,59)

Dedu 0,037 

(0,42)

LnY 0,375*** 

(5,37)

Hkids 0,361*** 

(4,30)

CrQualit 0,325*** 

(3,40)

CrPrice 0,315** 

(2,07)

ChGrShop -0,185* 

(-1,80)

StMarket 0,176* 

(1,91)

N 273
R2 0,272
R2(adj) 0,25
F 12,36***
*** Denotes significance p-value < 0,01 and 

** Denotes significance p-value < 0,05

* Denotes significance p-value < 0,1

The analysis of the above model showed that 27% of the variance of Expenditure on food product was significantly explained by the immigrants characteristics variables. Income exerts a positive influence on food expenditure. When income increases by 1% then food expenditure increases by 37%. Families with children spend more money on food than families without children. Also, immigrants who prefer high quality products, or choose to shop in low price markets, or choose local shops and street markets tend to spend more on food products than those who do not.

Expenditures on Education

Also, in the current model the method of Ordinary Least Squares Estimators (O.L.S.) has been used. Expenditure on education is the depended variable. It is a variable containing the amount of household expenditure for education. Independent variables include the level of education, religion, income, number of children and manual work.

The model for the effects of immigrants characteristics variables on the expenditure on education is the following:

LnΕxpeducation = a0+ a1 Dedu + a2 Drel +a3 lnY + a4 Nkids+

+ a5 KWHand + ui

Table 6. List of variables used in the expenditure on education model

Variable Type Description
Education Nominal 1 if they have bachelor & above; 0 otherwise
Religion Nominal 1 if they are Christians, 0=other;
Income Numeric The logarithmic monthly income per family
Children Numeric Number of children
Manual Work Nominal 1 if immigrants are manual worker; 0 otherwise

The equation for the effects of immigrants characteristics variables on the expenditure on food product is the following is analyzed in table 7:

Table 7. The effects of immigrants characteristics variables on expenditures on education

Variables

Model ΙΙΙ

Constant 1,326* 

(1,90)

Dedu 0,464*** 

(3,28)

Drel 0,255** 

(2,01)

LnY 0,333*** 

(2,94)

Νkids 0,301*** 

(4,95)

KWHand -0,202 

(-1,06)

N 175
R2 0,225
R2(adj) 0,202
F 9,87***
*** Denotes significance p-value < 0,01 and 

** Denotes significance p-value < 0,05

* Denotes significance p-value < 0,1

The analysis of the above model showed that 23% of the variance of Expenditure on education was significantly explained by the immigrants characteristics variables. Immigrants with higher educational background invest more money on the education of their children than those who have a lower level of education. Christians spend more on child educational purposes than immigrants from other religions. When income increases by 1%, the educational expenditure increases by 24%. As child numbers increase in a family, educational expenses also increase. Manual immigrant workers spend less on child education than those working with their intellect.

4. Conclusions

Greece was the place of destination for many immigrants especially from the Balkan countries during the 1990s. Unfortunately, the legal framework regarding immigration to Greece at that time was inadequate to confront the flux of immigrants and many immigrants lived in Greece illegally. Appropriate law measures were taken in 2001 that specified the requirements for the entrance and the establishment of immigrants in Greece.

Factors related to the immigrants’ characteristics such as the knowledge of the Greek language, the better educational level, the length of residence and the personal relationship with the Greeks, adoption to the Greek lifestyle were found to affect the social and economical integration of the immigrants in the Greek way of life.

Apparently, immigrants with a good knowledge of the language, longer residency, and better education achieve a better treatment from the Greek society. Therefore, immigrants of low skills and educational level will not be able to integrate in the Greek society. For that reason, it is significant for the immigration policy to take into account those weaknesses and to help these people to adapt to their new life for the sake of a good and productive Greek socio-economic life through special vocational courses mainly to teach the Greek language.

The consumer behaviour of economic immigrants was analysed using least squares models and it was found that income exerts a positive influence on food expenditure and immigrants with higher education invest more money on their children education.

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