An Evaluation of the Retail Service Quality Scale For U.S. and Korean Customers of Discount Stores


Soyoung Kim and Byoungho Jin (2001) ,"An Evaluation of the Retail Service Quality Scale For U.S. and Korean Customers of Discount Stores", in NA - Advances in Consumer Research Volume 28, eds. Mary C. Gilly and Joan Meyers-Levy, Valdosta, GA : Association for Consumer Research, Pages: 169-176.

Advances in Consumer Research Volume 28, 2001     Pages 169-176


Soyoung Kim, University of Georgia

Byoungho Jin, Yonsei University

The objective of this study is to examine if the Retail Service Quality Scale could successfully capture customers’ perceptions of service quality in discount stores across cultures. The U.S. and South Korea are selected as they reflect two different discount retail environments and cultural backgrounds. Behavioral intentions and satisfaction are also examined in relation to customer perceptions of service quality. Data are collected from two convenience samples of U.S. and Korean college students and analyzed using factor and regression analyses. The results suggest that the dimensionality of service quality is not universal across countries.


Faced with increasing competition and limited opportunities for growth in their home markets, a growing number of retailers are expanding globally. The top 100 global retailers represent one-fifth of the world’s retail market and continue to take market shares from their smaller local competitors (Carr, Hostrop, and O’Connor 1998). Leading discounters, such as Wal-Mart in the U.S. and Carrefour in France, are among the most successful global retailers, aggressively moving into foreign markets including many Asian countries. While discount retailing holds a dominant position in the retail industry in many western countries such as the U.S. (Chain Store Age 1999), it is a relatively new concept in Asia where most consumers shop at supermarkets and small neighborhood stores (Korea Herald 1999; Murphy 1999). Global discounters have long been aware that their success overseas depends largely upon their ability to adapt to the local market. A sound understanding of the foreign market becomes even more important to those looking for opportunities in Asia, given the differences in the retail environment and cultural background.

An examination of customers’ retail store experiences provides insight into how retailers can modify their goods and services to satisfy their customers. While much retail research has focused on customers’ evaluations of physical goods and overall store image (e.g., Hansen and Deutscher, 1977-78; Lindquist 1974-75; Reardon, Miller, and Coe 1995), few researchers have attempted to fully understand customers’ service-related retail store experiences (e.g., Parasuraman, Zeithmal, and Berry 1985; Parasuraman, Zeithmal, and Berry 1988). Providing high quality service is essential in the retail industry as it increases customers’ purchase intentions, store loyalty, and favorable word-of-mouth communication (McAlexander, Kaldenburg, and Koenig 1994; Zeithaml, Berry, and Parasuraman 1996). By satisfying customers through high qualty service, business firms not only retain their current customers, but also increase their market share. Ultimately, it leads to the enhancement of their overall financial performance (Finn and Lamb 1991; Sirohi, McLaughlin, and Wittink 1998).

While considerable efforts have been directed to developing and validating research instruments for measuring service quality in the service sector, (e.g., Hurley and Estelami 1998; Parasuraman et al. 1985; Parasuraman et al. 1988; Ynkel and Rimmington 1998), little research has considered service quality in the retail sector (Dabholkar Thorpe and Rentz 1996). A recent exception is a study by Dabholkar et al. (1996), who proposed the Retail Service Quality Scale (RSQS), an instrument for measuring service quality in a retail environment. In their study, the validity of the scale was supported for U.S. customers of department stores. We do not know if the RSQS instrument is applicable to non-U.S. cultures and to retail formats other than department stores. The generalizability of a measure is important because "constructing a new measure for each specific situation is both wasteful and expensive" (Reardon et al. 1995, p. 86).

The objective of this study is to examine the generalizability of the RSQS instrument in different research settings. In order to explore whether consumers’ perceptions of service quality in discount stores differ from culture to culture, we selected the United States and South Korea (hereafter Korea) because these two countries reflect two different discount retail environments as well as dissimilar cultural backgrounds. Korea represents the collectivist culture with a high tolerance of power differences whereas the United States is classified as the individualistic culture with a low tolerance of power differences (Hofstede 1980). In addition, compared to the United States, Korea has a relatively short history of discount retailing. It is important to know whether cultural and retail environmental differences would bring customers different service-related retail store experiences.

It is also of interest to examine the applicability of the RSQS instrument to discount retail settings. Traditionally, discount stores have offered relatively limited customer service to keep their prices down. In today’s highly competitive market, however, discounters have come to realize that price is no longer the great differentiator (Discount Store News 1996b). Now discounters are offering more and more value-added services in order to differentiate themselves from their competitors and also to satisfy customers who are becoming increasingly sensitive to service (Schwartz 1997). Their improvements in customer service are evidenced by a recent consumer survey that found discount and department stores tied in rankings of customer service (Paajanen 1997). Wal-Mart, the most successful discounter in the United States, is now known not only for low prices but also for "warm-sell" service (Discount Store News 1996a). If the RSQS instrument is to be a valid tool for measuring retail service quality, it should successfully capture customers’ perceptions of service quality in discount stores across cultures. This study would contribute to the extant literature in service quality by examining whether an instrument developed in the United States can be replicated in another culture and applied to a different research setting. Furthermore, this study has a practical implication in that its empirical results may be used to help multinational and domestic discounters operating in the United States or Korea better understand their target market.


Korea is the 11th largest economy in the world with a population of 47 million people (Discount Store News 1999). The first discount store in Korea, E-Mart, was introduced in 1993 by a leading Korean retailer. Since then, sales of the Korean discount store market increased 2000 times (Dong-A Il Bo 1998), reaching 2.49 trillion won ($2.08 billion) in the first half of 1998 (Korea Herald 1998). Since the Korean retail sector was fully liberalized in 1996, three global retailers, Carrefour, Costco, and Wal-Mart, have expanded into Korea, intensifying the competition. These global discounters currently hold a market share of 18.7% in Korea (Korea Herald 1998). As the ninth largest trading partner of the United States (USITC 2000), Korea possesses a great potential for U.S. discounters wishing to expand their market. Wal-Mart, the biggest U.S.-based discount retailer, moved into Korea in 1998 and, as of 1999, it operates five superstores in Korea (Discount Store News 1999). Joe Hatfield, president of Wal-Mart Asia, commented that "Wal-Mart is committed to the Korean market for the long-term" (Discount Store News 1999, p. 93). Among 87 discount retailers operating in Korea, two U.S.-based discounters, Wal-Mart and Costco (Price Club), respectively, achieved the seventh and the tenth highest sales in 1999. E-Mart, a Korean discounter, took the top position by reporting sales of 695.2 billion won ($579 million) in the first half of 1999, while Carrefour of France took the third position with sales of 298.1 billion won ($248 million) (Korea Economic Daily 1999).

In the United States, full-line discount retailing has over 40 years of history. The U.S. discount-store sector of the retail industry has grown from about $2 billion in sales in 1960 to more than $175 billion in 1999 (Chain Store Age 1999). This sector retains the largest market share of many product categories, such as table linen and kitchen textile products (Gunin 1999), menswear, boyswear, girlswear, and bath products (Chain Store Age 1999). Many successful discounters, such as Wal-Mart and Kmart, are among the fastest-growing retailers in the U.S.


Many business organizations have felt the critical need to develop a reliable and valid tool for evaluating service quality so that they can properly assess and improve their service performance. Using in-depth interviews with executives from service firms as well as focus group interviews, Parasuraman and his colleagues (1988) developed the SERVQUAL scale, which has become the most widely known research instrument for measuring service quality. SERVQUAL measures a gap between customers’ original expectations and the actual service they receive. Parasuraman et al. (1988) argued that, regardless of the type of service, consumers evaluate service quality using similar criteria, which can be grouped into five dimensions: tangibles, reliability, responsiveness, assurance, and empathy.

Since the original work of Parasuraman et al. in 1988, SERVQUAL has attracted numerous studies by both academics and practicing managers. It has been replicated in many different pure service settings as well as retail store environments. Despite its wide usage and the fact that it has proven to be a reliable scale in several studies for assessing pure service organizations, SERVQUAL has been criticized by many marketing researchers. In fact, the definition and operationalization of SERVQUAL have emerged as major debate topics among researchers in service quality for the past decade. Some of the widespread concerns are the five-dimension structure of the scale, the appropriateness of operationalizing service quality as the expectations-performances gap score, and the scale’s applicability to a retail setting (Babakus and Boller 1992; Finn and Lamb 1991; Gagliano and Hathcote 1994; Winsted 1997).

Several researchers (e.g., Babakus and Boller 1992) argued that people tend to indicate consistently high expectation ratings and that their perception scores rarely exceed their expectations. Therefore, including expectation scores on an instrument may be inefficient and unnecessary. Cronin and Taylor (1992), who questioned the relevance of he perceptions-expectations gap conceptualization, suggested that their performance-only SERVPERF scale is superior to SERVQUAL in terms of construct validity and operational efficacy. Researchers also found that performance-only measures better predict customer satisfaction than the gap expectation-perception score (Ynksel and Rimmington 1998). These studies provide support for the decision to use performance-only measures in this study.


Parasuraman et al. (1991) argued that SERVQUAL can be applied to a wide range of industries. However, many researchers (e.g., Babakus and Boller 1991; Dabholka et al. 1996; Finn and Lamb 1991) have suggested the need to design measures for specific industries. For example, Dabholka et al. (1996) recently developed the RSQS instrument, a hierarchical model of retail service quality, suggesting that the dimensionality of service quality in a retail setting may not be similar to that of service quality in pure service industries. This model includes five dimensions of retail service quality: physical aspects; reliability; personal interaction; problem solving; and store policies. Dabholka et al. used only performance-based measures and found that their scale possessed strong validity and reliability, adequately capturing customers’ perceptions of retail service quality. In their study, the five-factor structure model was tested with U.S. customers of department stores. To our knowledge, the present study is the first attempt to test Dabholka et al.’s hierarchical model, using data obtained from customers of discount stores.

Given the differences in the cultural background and the discount retail environment, we do not expect the service quality of discount stores in the United States and Korea to have the same five-factor structure identified by Dabholka et al. Although there exist only a few comparative studies that explored differences in service quality perceptions between countries, they agree that different cultures evaluate service differently (Malhotra, Ulgado, Agarwal, and Baalbaki 1994; Winsted 1997). In their conceptual paper, for example, Malhotra et al. (1994) proposed that environmental, economic, and sociocultural factors influence service quality determinants and that multinational firms should not adopt a standardized marketing approach. Winsted (1997), who examined customers’ service experiences in restaurants in the United States and Japan, also commented that "studies examining service encounters need to be sensitive to differences in culture and, perhaps, to industry differences" (p. 355).



Data for this study were collected using a self-administered questionnaire given to two convenience samples of U.S. and Korean college students who had recently shopped at a discount store. The questionnaire was completed by 214 U.S. students at a western university in the United States and 217 Korean students at two universities in Seoul, Korea. In preparation, the questionnaire was originally written in English and translated into Korean by one of the researchers. Two different bilingual interpreters (native Koreans who were fluent in English) then translated the results back into English. Based on a comparison between the original English version and the back-translated version, some modifications were made.

The respondents were predominantly female for both samples (89.7% for the U.S. sample and 82.5% for the Korean sample). This was because the questionnaire was given to students enrolled in several courses in apparel merchandising in both countries. U.S. respondents ranged in age from 19 to 30 with an average age of 20 years and Korean respondents from 18 to 38 with an average age of 22 year. According to a recent survey, the most common shoppers at large discount stores in Korea are young females 20 to 30 years old (Korea Herald 1999). Similarly, young women are the core shoppers of discount department stores in the U.S. (Duff 1999). This justifies, to some degree, the use of predominantly female college students in this study. About 45% of the U.S. respondents reported they shopped at a discount store once a week or more. On the other hand, only 12.9% of the Korean respondents shopped once a week or more.




The questionnaire consisted of four sections. The first section asked the respondents to indicate the discount store where they had shopped most often in the past year and how often they shopped at that store. A discount store was defined as "a general merchandise retailer that offers a wide variety of merchandise, limited service, and low prices" (Levy and Weltz, p. 41). In the second section, respondents were asked to rate their most preferred store on various aspects of service quality. To measure the service quality of discount stores, Dabholkar et al.’s (1996) multi-item scale was adopted. This scale consists of 33 items that measure the five dimensions of customer perceptions of service quality for a retail store. Dabholka et al. used perception measures instead of the gap between perceptions and expectations because the evidence demonstrated that perception measures have a stronger predictive power than the gab score (e.g., Cronin and Taylor 1992; McAlexander et al. 1994). The scale was measured on a 7-point Likert scale from 1 (strongly disagree) to 7 (strongly agree). The third section was designed to measure respondents’ behavioral intentions toward the store as well as their satisfaction with the store. The final section solicited demographic information such as age and gender.


The data were analyzed in two stages. First, the dimensionality of each of the measures in each sample was examined using principal component analysis with an oblique rotation. The factor structure identified through this exploratory factor analysis was then validated by confirmatory factor analysis via LISREL 8 (J÷reskog and S÷rbom 1996). The second stage involved using regression analyses to assess the relationship between service quality, behavioral intentions, and satisfaction.

Factor analyses

Principal component analysis with an oblique rotation was first performed on the retail service quality measure to examine the underlying dimensions of the construct. Factor analysis for the U.S. sample produced four dimensions with eigenvalues greater than one (Table 1). The items loaded on the first factor appeared to be a mixture of items that related to two of the five dimensions of the RSQS instrument: personal interaction and problem solving. This factor was entitled personal attention. The second factor contained three items that reflected the store’s ability to perform service dependably and consistently, and was named reliability. The next factor, convenience, included four items that related to making customers’ purchase processes efficient and convenient. The last factor, labeled credit card policy, contained two credit card-related items such as accepting most major credit cards and offering its own credit card. Cronbach’s alpha coefficient was used to examine the reliabilities among the items within each factor. It was decided to accept an alpha coefficient higher than .60 as indicating reliability. The coefficients of the first four factors revealed acceptable internal consistency. The last factor, credit card policy, however, indicated a low reliability (a=.57), and was excluded from further nalyses. The first three factors, personal attention, reliability, and convenience, correspond to those identified by Gagliano and Hathcote (1994) in a study of apparel specialty stores. This suggests that perhaps U.S. customers of discount stores and apparel specialty stores may perceive service quality in a similar manner. Confirmatory factor analysis provided moderate support for the three conceptualizations (c2=597.69, df=186, p<.001; RMR=.06; GFI=.80; AFGI=.75; CFI=.90). The correlations among the factors were also examined. Positive correlations existed among the three factors (f=.56 between personal attention and reliability; f=.68 between personal attention and convenience; f=.34 between reliability and convenience). This suggests that customers who hold favorable perceptions of one dimension of service quality also tend to perceive other dimensions of service quality favorably.



In the Korean sample, the 33 items loaded on four factors (Table 2). The items loaded on the first factor, tangibles, involved physical aspects of the store and its staff. The second factor, empathy, included two items about giving customers personal and individual attention. The third factor captured the store’s willingness to provide prompt service, and was labeled responsiveness. The last factor included two items, "This store insists on error-free records" and "This store offers its own credit card," and was named store policy. The alpha coefficients for the first three factors were .81, .72, and .80, respectively, indicating a high level of internal consistency. The smallest alpha coefficient found was .43 for store policy and we decided that it should be excluded from further analyses. Confirmatory factor analysis indicated an adequate, although not excellent, fit for the three-factor solution (c2=140.18, df=51, p<.001; RMR=.06; GFI=.89; AFGI=.83; CFI=.89). As in the U.S. sample, there were positive correlations among all three factors (f=.50 between tangibles and empathy; f=.78 between tangibles and responsiveness; f=.60 between empathy and responsiveness).

The 14 behavioral-intention items were also factor analyzed separately for U.S. and Korean samples. Factor analysis for the U.S. respondents identified four factors (Table 3). The first factor contained five positively worded intention items that reflected the customer’s loyalty. Thus, it was named loyalty (a=.87). On the other hand, the second factor, switch, included three negatively worded items that indicated the customer’s intention to switch (a=.66). The third factor contained only one item, "I will do less business with this store." This single-item factor was deleted from all subsequent analyses as one item might undermine its meaningfulness (Zeithaml et al. 1996). The last factor, labeled complaint, included two items related to making a complaint to external agencies and to the store’s employees (a=.66). The first three factors entered into confirmatory model revealed a good fit to the data (c2=86.51, df=32, p<.001; RMR=.07; GFI=.93; AFGI=.88; CFI=.93). Loyalty had no significant correlation with either switch or complaint. On the other hand, switch was positively associated with complaint (f=.45).

As for the Korean respondents, three factors emerged that were comparable to those obtained for U.S. respondents (Table 4). The first factor was named loyalty (a=.83). The second factor, switch, was identical to the second factor found for the U.S. respondents (a=.64). In addition, surprisingly the single item loaded on the last factor for the Korean respondents was the same statement that loaded on the last factor for the U.S. respondents. Again, this single-item factor was eliminated. A two-factor confirmatory model of behavioral intentions provides a reasonable fit to the data (c2=90.04, df=26, p<.001; RMR=.08; GFI=.90; AFGI=.83; CFI=.88). There was no significant association between loyalty and switch. In both samles, the six-factor solution was not supported; however, the consistency between the two samples suggested that the dimensionality of behavioral intentions may be determined by the store type.





Cronbach’s alpha coefficient for customer satisfaction was high at .81 for the U.S. sample and at .84 for the Korean sample. Factor items for all the measures in this study were summed into multi-item scales. The means of the resulting scales were examined to compare the perceptions and attitudes between the two samples. In the eyes of U.S. customers, the most favorably perceived dimensions of service quality were convenience (mean=5.72), personal attention (5.28), and reliability (4.94), in order. On the other hand, Korean customers perceived tangibles (4.29) most favorably, followed by responsiveness (3.91) and empathy (3.20). Overall, U.S. consumers rated their discount stores more favorably than did Korean consumers. In addition, U.S. respondents exhibited stronger loyalty (5.68) toward their favorite discount store and higher level of satisfaction (5.61) than Korean respondents (3.99 for loyalty and 3.99 for satisfaction). Both samples, however, expressed a somewhat high degree of intention to switch if they experience a problem with the service (5.12 for U.S. and 5.16 for Korean sample). This suggests that their continued patronage of a discount store is strongly based on their satisfaction with its service.

Regression analyses

In order to determine the best predictors of behavioral intentions, regression analyses were then used, separately, for U.S. and Korean respondents. The multi-item scales of service quality dimensions were entered into regression as the independent variables, while the behavioral-intention factors and customer satisfaction were used as the dependent variables.

As for U.S. respondents, two of the three service quality factors, i.e., personal attention (b=.64) and convenience (b=.18), were significantly associated with loyalty. Reliability was not significant in predicting loyalty. Coefficient of determination (R2) for this model was 55% and the model was significant at the .001 level. The same set of the three service quality factors explained only 2% of variance in switch and l% of variance in complaint. These two models were not significant at the .01 level. None of the three service quality factors predicted switch and complaint, while all the factors significantly predicted satisfaction. The satisfaction model was highly significant at the .001 level (b=.54 for personal attention; b=.20 for reliability; b=.13 for convenience) and the R2 was 55%. Overall service quality appeared to be a significant predictor of only one dimension of the behavioral-intention measure, i.e., loyalty. Its predictive powers for loyalty and customer satisfaction were equally strong. Among the three service quality factors, personal attention seemed to be the best predictor of the two dependent variables mentioned above.

As for Korean respondents, only tangibles (b=.22) and responsiveness (b=.28) were significantly associated with loyalty. This model was significant at the .001 level and the R2 was 27%. None of the service quality factors was significant in predicting switch (R2=1%). but all of them were significant in predicting customer satisfaction (b = .37 for tangibles; b = .13 for empathy; b=.19 for responsiveness) (R2=33%). As for the Korean sample, empathy seemed to be the least important in predicting the dependent variables. Responsiveness was the best predictor of loyalty while tangibles was the strongest predictor of customer satisfaction. Overall, service quality appeared to better predict customer satisfaction than loyalty.






The purpose of this study was to examine whether the RSQS instrument developed by Dabholkar et al. (1996) could capture both U.S. and Korean customer perceptions of service quality in discount stores. We believe that the understanding of the dimensionality of service quality is critical not only for measurement purposes but also for providing greater insights into customers' perceptions and shopping behavior. Overall, the factor-loading patterns identified through factor analysis did not appear as expected from Dabholkar et al.'s study and, therefore, failed to support their conceptualization of retail service quality (Table 5).

In both U.S. and Korean samples, a four-factor solution resulted from the principal component analyses; however, the items that factored together were not identical. This suggests that customers' perceptions of service quality in discount retailing differ from culture to culture. The personal attention factor that contained staff quality items relating to giving customers personal attention emerged as the most important dimension of service quality in the U.S. sample. In the Korean sample, however, many of the same items split into two factors (i.e., empathy and responsiveness). Just as Dabholkar et al. found in their study of U.S. customers of department stores, the U.S. respondents in this study did not differentiate empathy items from responsiveness items. However, in the mind of Korean customers, empathy and responsiveness were two distinct dimensions of service quality.

Tangibles was the most important factor in the Korean sample, but this factor was not identified in the U.S. sample, although some of the physical- aspects items loaded on the convenience dimension. According to Malhotra et al. (1994), service providers in developing countries put a greater emphasis on the tangible core service whereas in developed countries intangible benefits are more important. Using Maslow's needs hierarchy, Malhotra et al. explained that physical aspects of service are of a lower order and the lower-level needs should be satisfied before higher-level needs are addressed. Service providers in developing countries have yet to satisfy fully such lower-level needs, whereas those in developed countries put a greater emphasis on extended benefits beyond the physical and functional. These extended benefits tend to be more intangible. In Korea, discount retailing has recently been introduced and, therefore, customers and discount retailers still may be preoccupied with the tangible service. On the other hand, U.S. customers may be more interested in intangible benefits such as personal attention. Also, in their minds, physical aspects of service were not a distinct factor.

Except the last factor that appeared not to be reliable, all the factors were subjected to confirmatory factor analysis in both samples to confirm the factor structure identified through principal component analysis. In both samples, confirmatory factor analysis provided a moderate support for the factor structure. Taken together, these results indicate that the factor structure, reported by Dabholka et al., was not present in this study of discount store customers. In addition, the factor structures found in the two samples were not identical. Perhaps the discount retail sector and the department store retail sector do not view service quality in a similar manner, nor do U.S. and Korean customers of discount stores. In other words, the dimensionality of service quality is not universal across industries nor across countries.

Although factor analysis of behavioral intentions did not confirm Zeithaml et al.'s (1996) five-factor structure in both samples, the emergence of the two largest factors, loyalty and switch, in both the U.S. and Korean samples indicated that these are two distinctive dimensions of behavioral intentions toward discount stores in two countries (Table 6). However, given that all loyalty factor items were positively worded and all switch items were negatively worded, it is possible that these two factors emerged because of this wording variation.

In general, the U.S. respondents perceived service quality in discount stores more favorably than did the Korean respondents. They also expressed more favorable behavioral intentions toward discount stores and greater satisfaction than their counterparts. These results probably suggest that Korean consumers have not yet established their trust and patronage toward discount stores, which makes sense considering the relatively recent introduction of this sector in this country. We also observed that, overall, the Korean respondents tend to shop at a discount store less often than the U.S. respondents. This finding can be misleading, falsely suggesting that there is not much potential for discount stores in Korea. According to a recent survey, Korean consumers tend to go to large discount stores less often than the two major traditional distribution channels in Korea, supermarkets and small neighborhood stores; however, on average, consumers spend the same amount of money at large discounters as at the other two distribution channels. In other words, Korean consumers make fewer trips to discount stores but make larger purchases per trip (Korea Herald 1999). It would be interesting to investigate the amount of purchases both U.S. and Korean consumers make at discount stores as well as their purchasing patterns.

A major limitation of this study was the use of predominantly female college students as a sample. College students have more limited resources than other consumer groups and thus may favor discount stores mainly for their low prices. On the other hand, consumers of higher income, who can afford to shop at department or specialty stores, which offer better customer service, may be less tolerant of the low-quality service provided by discount stores. In a more affluent consumer sample, there might be a stronger association between service quality and behavioral intentions. The use of students enrolled in merchandising courses also limits the generalizability of the results, as they are more likely to be better informed about the retail industry. Therefore, future studies should examine a nationwide sample of discount store customers in all age groups. In addition, studies that include other variables would be an important extension of this study.


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Soyoung Kim, University of Georgia
Byoungho Jin, Yonsei University


NA - Advances in Consumer Research Volume 28 | 2001

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Guilt Undermines Consumer Willingness to Buy More Meaningful Time

Ashley V. Whillans, Harvard Business School, USA
Elizabeth W. Dunn, University of British Columbia, Canada

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