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Empirical Implications (empirical + implication)
Selected AbstractsEmpirical implications of response acquiescence in discrete-choice contingent valuationHEALTH ECONOMICS, Issue 10 2006Raymond Y. T. Yeung Abstract The use of discrete-choice contingent valuation (CV) to elicit individuals' preference, expressed as maximum willingness-to-pay (WTP), although primarily developed in environmental economics, has been popular in the economic evaluation of health and healthcare. However, a concern with this method is the potential for ,over-estimating' WTP values due to the presence of response acquiescence, or ,yea-saying' bias. Based on a CV survey conducted to estimate physicians' valuation of clinic computerization, the extent of such bias was estimated from a within-sample open-ended valuation question following the respondents' discrete choice response. Analysis of this data suggests that not only was response acquiescence an issue, but also that the parametric estimation of mean and median WTP, the most common approach to estimating WTP from discrete-choice data, would potentially magnify such bias (to various degrees depending on the distributional assumptions applied). The possible extent of CV design versus analysis in discrete-choice methods therefore warrants further exploration. Copyright © 2006 John Wiley & Sons, Ltd. [source] Trade implications of price discrimination in a domestic marketAGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 1 2010Nobunori Kuga This study examines how domestic price discrimination between fluid and manufacturing milk influences dairy trade. Two types of dairy models are used for the study. The first one is a stylized mathematical model which is used to explore the relative trade effects of domestic price discrimination accompanied with revenue pooling mechanism versus border measures in dairy product markets. The second one is a partial equilibrium, multiple-region model of dairy policy and trade, which is used to see the empirical implication of domestic price discrimination for six major dairy producers. The analytical results identify the trading status as the key to determine the relative trade effects. While domestic price discrimination is always less trade distorting than border measures in a net-importer case, the relative trade distortiveness depends on the export volume in a net exporter case. The theoretical possibility that domestic price discrimination is more trade distorting than border measures is found when the ratio of dairy export to domestic manufacturing milk consumption is very high. The results also indicate that while the both support measures increase dairy export, domestic price discrimination may place greater economic burden on fluid milk consumers and less economic burden on tax payers than border measures. In addition, the results imply that domestic price discrimination schemes can be effective trade protective measures for Canada, Japan and the United States, where the schemes are currently being implemented. © 2010 Wiley Periodicals, Inc. [source] Over-the-Counter MarketsECONOMETRICA, Issue 6 2005Darrell Duffie We study how intermediation and asset prices in over-the-counter markets are affected by illiquidity associated with search and bargaining. We compute explicitly the prices at which investors trade with each other, as well as marketmakers' bid and ask prices, in a dynamic model with strategic agents. Bid,ask spreads are lower if investors can more easily find other investors or have easier access to multiple marketmakers. With a monopolistic marketmaker, bid,ask spreads are higher if investors have easier access to the marketmaker. We characterize endogenous search and welfare, and discuss empirical implications. [source] Disclosures and Asset ReturnsECONOMETRICA, Issue 1 2003Hyun Song Shin Public information in financial markets often arrives through the disclosures of interested parties who have a material interest in the reactions of the market to the new information. When the strategic interaction between the sender and the receiver is formalized as a disclosure game with verifiable reports, equilibrium prices can be given a simple characterization in terms of the concatenation of binomial pricing trees. There are a number of empirical implications. The theory predicts that the return variance following a poor disclosed outcome is higher than it would have been if the disclosed outcome were good. Also, when investors are risk averse, this leads to negative serial correlation of asset returns. Other points of contact with the empirical literature are discussed. [source] Liquidity: Considerations of a Portfolio ManagerFINANCIAL MANAGEMENT, Issue 1 2009Laurie Simon Hodrick This paper examines liquidity and how it affects the behavior of portfolio managers, who account for a significant portion of trading in many assets. We define an asset to be perfectly liquid if a portfolio manager can trade the quantity she desires when she desires at a price not worse than the uninformed expected value. A portfolio manager is limited by both what she needs to attain and the ease with which she can attain it, making her sensitive to three dimensions of liquidity: price, timing, and quantity. Deviations from perfect liquidity in any of these dimensions impose shadow costs on the portfolio manager. By focusing on the trade-off between sacrificing on price and quantity instead of the canonical price-time trade-off, the model yields several novel empirical implications. Understanding a portfolio manager's liquidity considerations provides important insights into the liquidity of many assets and asset classes. [source] Time to include time to death?HEALTH ECONOMICS, Issue 4 2004The future of health care expenditure predictions Abstract Government projections of future health care expenditures , a great concern given the aging baby-boom generation , are based on econometric regressions that control explicitly for age but do not control for end-of-life expenditures. Because expenditures increase dramatically on average at the end of life, predictions of future cost distributions based on regressions that omit time to death as an explanatory variable will be biased upward (or, more explicitly, the coefficients on age will be biased upward) if technology or other social factors continue to prolong life. Although health care expenditure predictions for a current sample will not be biased, predictions for future cohorts with greater longevity will be biased upwards, and the magnitude of the bias will increase as the expected longevity increases. We explore the empirical implications of incorporating time to death in longitudinal models of health expenditures for the purpose of predicting future expenditures. Predictions from a simple model that excludes time to death and uses current life tables are 9% higher than from an expanded model controlling for time to death. The bias increases to 15% when using projected life tables for 2020. The predicted differences between the models are sufficient to justify reassessment of the value of inclusion of time to death in models for predicting health care expenditures. Copyright © 2003 John Wiley & Sons, Ltd. [source] Does Opinion Shopping Impair Auditor Independence and Audit Quality?JOURNAL OF ACCOUNTING RESEARCH, Issue 3 2006TONG LU ABSTRACT This study investigates how companies' threats to dismiss auditors and their engagement in opinion shopping influence auditor independence and audit quality, which in turn affect misstatements in financial statements. It also examines how outsiders' reactions to auditor switching influence opinion shopping. The results indicate that neither the predecessor auditor's nor the successor auditor's independence is compromised by dismissal threats and opinion shopping. Further, the successor auditor's audit quality exceeds the predecessor auditor's audit quality. In addition, auditor switching decreases potential understatements and increases potential overstatements in financial statements, and the capital market's and the successor auditor's reactions to auditor switching reduce the benefits of opinion shopping to companies. Additionally, the study sheds some light on the potential effects of both the Sarbanes-Oxley's restriction on non-audit services and mandatory auditor rotation or retention. The paper also derives a rich set of empirical implications. [source] Econometric modelling of non-ferrous metal pricesJOURNAL OF ECONOMIC SURVEYS, Issue 5 2004Clinton Watkins Abstract., This article evaluates the significance of the empirical models and the distributional properties of prices in non-ferrous metal spots and futures markets published in leading refereed economics and finance journals between 1980 and 2002. The survey focuses on econometric analyses of pricing and return models applied to exchange-based spot and futures markets for the main industrially used non-ferrous metals, namely aluminium, copper, lead, nickel, tin and zinc. Published empirical research is evaluated in the light of the type of contract examined, frequency of data used, choice of both dependent and explanatory variables, use of proxy variables, type of model chosen, economic hypotheses tested, methods of estimation and calculation of SEs for inference, reported descriptive statistics, use of diagnostic tests of auxiliary assumptions, use of nested and non-nested tests, use of information criteria and empirical implications for non-ferrous metals. [source] Addressing Three Common Issues in Research on Youth Activities: An Integrative Approach for Operationalizing and Analyzing InvolvementJOURNAL OF RESEARCH ON ADOLESCENCE, Issue 3 2010Michael A. Busseri Youth activity involvement has been operationalized and analyzed using a wide range of approaches. Researchers face the challenges of distinguishing between the effects of involvement versus noninvolvement and intensity of involvement in a particular activity, accounting simultaneously for cumulative effects of involvement, and addressing multiple unique effects of individual activities. In the present work, we review and illustrate the conceptual and empirical implications of these issues using data from a study of activity involvement and successful development in early adolescence (N=537; M age=11.56, 52% female). An integrative solution is introduced based on a latent composite variable (LCV) model (Bollen & Lennox, 1991), which can be used to address all three issues simultaneously. Using this approach, we show that of the aggregate indices examined, breadth of involvement was uniquely and positively associated with multiple indices of successful development. Of the individual activities, a dichotomous score and residual frequency rating for involvement in out-of-school clubs were both uniquely associated with less positive development indicators. We concluded that an LCV approach provides a novel method for addressing several fundamental operational and analytic issues facing researchers who investigate youth activity involvement as a context for positive development. [source] Determinants of Multifamily Mortgage DefaultREAL ESTATE ECONOMICS, Issue 3 2002Wayne R. Archer Option,based models of mortgage default posit that the central measure of default risk is the loan,to,value (LTV) ratio. We argue, however, that an unrecognized problem with extending the basic option model to existing multifamily and commercial mortgages is that key variables in the option model are endogenous to the loan origination and property sale process. This endogeneity implies, among other things, that no empirical relationship may be observed between default and LTV. Since lenders may require lower LTVs in order to mitigate risk, mortgages with low and moderate LTVs may be as likely to default as those with high LTVs. Mindful of this risk endogeneity and its empirical implications, we examine the default experience of 495 fixed,rate multifamily mortgage loans securitized by the Resolution Trust Corporation (RTC) and the Federal Deposit Insurance Corporation (FDIC) during the period 1991,1996. The extensive nature of the data supports multivariate analysis of default incidence in a number of respects not possible in previous studies. Consistent with our expectations, we find that LTV evidences no relationship to default incidence, while the strongest predictors of default are property characteristics, including three,digit ZIP code location and initial cash flow as reflected in the debt coverage ratio. The latter results are particularly interesting in that they dominated the influence of postorigination changes in the local economy. [source] A Framework for Unifying Formal and Empirical AnalysisAMERICAN JOURNAL OF POLITICAL SCIENCE, Issue 3 2010Jim Granato An important disconnect exists between the current use of formal modeling and applied statistical analysis. In general, a lack of linkage between the two can produce statistically significant parameters of ambiguous origin that, in turn, fail to assist in falsifying theories and hypotheses. To address this scientific challenge, a framework for unification is proposed. Methodological unification leverages the mutually reinforcing properties of formal and applied statistical analysis to produce greater transparency in relating theory to test. This framework for methodological unification, or what has been referred to as the empirical implications of theoretical models (EITM), includes (1) connecting behavioral (formal) and applied statistical concepts, (2) developing behavioral (formal) and applied statistical analogues of these concepts, and (3) linking and evaluating the behavioral (formal) and applied statistical analogues. The elements of this EITM framework are illustrated with examples from voting behavior, macroeconomic policy and outcomes, and political turnout. [source] The Effects of Strategic and Economic Interdependence on International Conflict Across Levels of AnalysisAMERICAN JOURNAL OF POLITICAL SCIENCE, Issue 1 2009Zeev Maoz This study develops a Social Network Analytic approach to conceptualize and measure interdependence across levels of analysis. This framework contains several innovations. First, it integrates "sensitivity interdependence",the effects of changes in one state on other states,with "vulnerability interdependence",the opportunity costs of breaking a relationship. Second, it measures interdependence at different levels of analysis and across multiple relationships. Third, it integrates multiple dimensions of interdependence into a single measure. I derive hypotheses from the realist and liberal paradigms regarding the effects of strategic and economic interdependence on monadic, dyadic, and systemic conflict. These hypotheses are tested via data on alliances, military capability, and trade. The findings provide robust support to the expectations of the liberal paradigm regarding the effects of strategic and economic interdependence on conflict. On the other hand, the expectations of the realist paradigm are not supported. I discuss the theoretical and empirical implications of this approach. [source] On the Importance of Measuring Payout Yield: Implications for Empirical Asset PricingTHE JOURNAL OF FINANCE, Issue 2 2007JACOB BOUDOUKH ABSTRACT We investigate the empirical implications of using various measures of payout yield rather than dividend yield for asset pricing models. We find statistically and economically significant predictability in the time series when payout (dividends plus repurchases) and net payout (dividends plus repurchases minus issuances) yields are used instead of the dividend yield. Similarly, we find that payout (net payout) yields contains information about the cross section of expected stock returns exceeding that of dividend yields, and that the high minus low payout yield portfolio is a priced factor. [source] The Impact of Collateralization on Swap RatesTHE JOURNAL OF FINANCE, Issue 1 2007MICHAEL JOHANNES ABSTRACT Interest rate swap pricing theory traditionally views swaps as a portfolio of forward contracts with net swap payments discounted at LIBOR rates. In practice, the use of marking-to-market and collateralization questions this view as they introduce intermediate cash flows and alter credit characteristics. We provide a swap valuation theory under marking-to-market and costly collateral and examine the theory's empirical implications. We find evidence consistent with costly collateral using two different approaches; the first uses single-factor models and Eurodollar futures prices, and the second uses a formal term structure model and Treasury/swap data. [source] A Theory of Dividends Based on Tax ClientelesTHE JOURNAL OF FINANCE, Issue 6 2000Franklin Allen This paper explains why some firms prefer to pay dividends rather than repurchase shares. When institutional investors are relatively less taxed than individual investors, dividends induce "ownership clientele" effects. Firms paying dividends attract relatively more institutions, which have a relative advantage in detecting high firm quality and in ensuring firms are well managed. The theory is consistent with some documented regularities, specifically both the presence and stickiness of dividends, and offers novel empirical implications, e.g., a prediction that it is the tax difference between institutions and retail investors that determines dividend payments, not the absolute tax payments. [source] Does monetary policy transparency reduce disinflation costs?THE MANCHESTER SCHOOL, Issue 5 2003Georgios Chortareas We examine the relationship between central bank transparency and the costs of disinflation. We provide a model where disinflation efforts imply a higher sacrifice ratio when the public is not fully convinced about the central bank's resolve to reduce inflation and show that information dissemination by the central bank can remedy this problem. To assess the empirical implications we estimate sacrifice ratios based on individual estimates of Phillips curves in 21 OECD economies. Using transparency indices pertaining to both the detail with which central banks publish forecasts and the means by which policy decisions are explained, we find that a higher degree of central bank transparency is associated with lower sacrifice ratios. This result is robust to alternative estimation methods and periods considered. [source] | ||||||||||||||||||||||