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Selected AbstractsHousing Wealth and UK ConsumptionECONOMIC OUTLOOK, Issue 4 2006Article first published online: 13 NOV 200 There is widespread disagreement about the role of housing wealth in explaining consumption. However, much of the empirical literature is marred by poor controls for the common drivers both of house prices and consumption, such as income, income growth expectations, interest rates, credit supply conditions, other assets and indicators of income uncertainty (e.g. changes in the unemployment rate). For instance, while the easing of credit supply conditions is usually followed by a house price boom, failure to control for the direct effect of credit liberalisation on consumption can over-estimate the effect of housing wealth or collateral on consumption. This paper (Janine Aron, John Muellbauer and Anthony Murphyi, October 2006) estimates an empirical model for UK consumption from 1972 to 2005, grounded in theory, and with more complete empirical controls than hitherto used. [source] Capital Structure and Firm EfficiencyJOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 9-10 2007Dimitris Margaritis Abstract:, This paper investigates the relationship between firm efficiency and leverage. We consider both the effect of leverage on firm performance as well as the reverse causality relationship. In particular, we address the following questions: Does higher leverage lead to better firm performance? Does efficiency exert a significant effect on leverage over and above that of traditional financial measures of capital structure? Is the effect of efficiency on leverage similar across different capital structures? What is the signalling role of efficiency to creditors or investors? Using a sample of 12,240 New Zealand firms we find evidence supporting the theoretical predictions of the Jensen and Meckling (1976) agency cost model. Efficiency measured as the distance from the industry's ,best practice' production frontier is positively related to leverage over the entire range of observed data. The frontier is constructed using the non-parametric Data Envelopment Analysis (DEA) method. Using quantile regression analysis we show that the reverse causality effect of efficiency on leverage is positive at low to mid-leverage levels and negative at high leverage ratios. Firm size also has a non-monotonic effect on leverage: negative at low debt ratios and positive at mid to high debt ratios. The effect of tangibles and profitability on leverage is positive while intangibles and other assets are negatively related to leverage. [source] IMPERFECT INFORMATION AND DIFFERENCES IN HOME OWNERSHIP INVESTMENTPACIFIC ECONOMIC REVIEW, Issue 4 2004Keiko Nosse Hirono We study the advantages accruing to buyers who have complete information and who can pay less than the equilibrium price if sellers undervalue their properties. The reduction in home ownership investment can increase consumption or investment in other assets. We develop an empirical model to capture the gain to such buyers. We estimate this to have been 12.6%,27.6% of the equilibrium price of houses at maximum in the Tokyo metropolitan area during the 1980s. [source] Portfolio risk and self-directed retirement saving programmes*THE ECONOMIC JOURNAL, Issue 494 2004James M. Poterba Defined contribution retirement plans expose retirement savers to financial market risks. This paper explores the costs of retirement wealth risk. It begins by describing the holding of company stock in 401(k) plans in the US, an investment choice that yields a poorly diversified retirement portfolio. It then summarises the composition of household wealth at retirement and investigates how the degree of diversification in retirement assets affects expected utility. The cost of holding a poorly diversified retirement portfolio is very sensitive to whether or not the retirement saver has other assets that provide a floor for retirement consumption. [source] | ||||||||||