...{text:bookmark-start} Decisions in Paradise Pt1 {text:bookmark-end} “Kraft is reinforcing a mindset of candor, courage and action throughout the company. Kraft management team is leading by example to encourage open and honest discussions. We want to learn from what's working well, identify what's not and decide how we can fix it. We're also striking a balance between decision-making globally and locally. We're putting more decisions in the hands of our local-market leaders. After all, they are closest to our consumers. We're reframing our categories to make them more relevant to consumers. We are making our products more contemporary by identifying key consumer trends that can have the biggest impact on our business. Kraft has one of the largest and most powerful sales forces in the food industry. In the United States, we are piloting a new sales initiative to give store managers a single point of contact for Kraft. This will create more opportunities to showcase the products consumers want and ensure they're always in stock. Internationally, we're expanding our distribution reach in developing countries where there is rapidly growing demand. Investing in and leveraging these competitive advantages will help drive business growth. We always keep an eye on keeping costs down. But not at the expense of quality. We're continuing to invest in our products to ensure everything we make is truly delicious. We're also taking stock of what we do best as a company and where we might be...
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...Risk in Housing Markets: An Equilibrium Approach⇤ Aurel Hizmo† NYU Stern January 30, 2012 Abstract Homeowners are overexposed to city-specific house price risk and income risks, which may be very di cult to insure against using standard financial instruments. This paper develops a micro-founded equilibrium model that transparently shows how this local uninsurable risk a↵ects individual location decisions and portfolio choices, and ultimately how it a↵ects prices in equilibrium. I estimate a version of this model using house price and wage data and provide estimates for risk premia for di↵erent cities, which imply that homes are on average about $20000 cheaper than they would be if owners were risk-neutral. This estimate is over $100000 for volatile coastal cities. Next, I simulate the model to study the e↵ects of financial innovation on equilibrium outcomes. Creating assets that hedge city-specific risks increases house prices by about 20% and productivity by about 10%. The average willingness to pay for completing the market per homeowner is between $10000 and $20000. Welfare gains come both from better risk-sharing and from more e cient sorting of households across cities. ⇤ I am deeply grateful to Patrick Bayer, Andrew Patton, and Peter Arcidiacono for their encouragement and support. I also thank Robert McMillan, Tim Bollerslev, Vish Viswanathan, Chris Timmins, Jimmy Roberts and the seminar participants at Duke Finance, the ERID Conference at Duke, Fed Board, NYU Stern...
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