Habit formation and the equity–premium puzzle: a skeptical view

We argue that, ceteris paribus, introducing a habit that resolves the equity–premium puzzle is equivalent to increasing the Arrow-Pratt coefficient of relative risk aversion, AP-RRA. If we constrain the AP-RRA to a constant ‘acceptable’ level, the effect on the equity premium is quantitatively insignificant. In a dynamic setting, the fluctuations of the habit increase the equity premium, slightly, though generates unrealistic fluctuations in the risk-free interest rate. We conclude a habit is observationally equivalent, up to a first-order approximation, to a higher AP-RRA and to a preference shock. These effects cannot resolve the equity–premium puzzle.      

Targeting interventions to high-risk populations: Benefits and costs

Targeting prevention interventions to high-risk populations may increase intervention benefits, but identifying and/or finding the high-risk populations may increase intervention costs. We explore the costs and benefits of targeting in the context of human immunodeficiency virus (HIV) prevention in high-risk injection drug users (IDUs). Focusing interventions on such a population should maximize the number of HIV infections averted. Recruiting high-risk IDUs for such interventions, however, may be more difficult and costly. We base our analysis on an earlier model that determines the allocation of resources to two interventions, street outreach and methadone maintenance. The model seeks to minimize HIV incidence in a population of heterosexual IDUs and their non-injecting sex partners. We conclude that while targeting an inexpensive intervention like street outreach rarely proves to be cost-effective, even a costly targeting effort can increase cost effectiveness for an expensive, effective, narrowly focused intervention such as methadone maintenance.     

DOES RELIGIOSITY AFFECT SUPPORT FOR POLITICAL COMPROMISE?

Does religiosity affect adherents' attitude toward political compromise? To address this question and overcome the potential simultaneity of religious activity and political attitudes, we exploit exogenous variation in the start date of the Selichot (“Forgiveness”), a period in which many Jews, including nonadherents, take part in an intense prayer schedule. Using a two‐wave survey, we find that an increase in the salience of religiosity leads to the adoption of more hard‐line positions against a land‐for‐peace compromise. Examining several potential mechanisms for this attitudinal shift, our evidence points to the impact of the intensified prayer period on adherents' tolerance for risk.     

From Big Bang to Big Crash: The Early Origins of the UK’s Finance-led Growth Model and the Persistence of Bad Policy Ideas

Using newly declassified documents from the British Public Records Office, we argue that the finance-dependent growth regime that typified the UK economy in the period up to the Great Crash of 2008 has much deeper roots than is commonly realised. We use these documents to demonstrate that the growth of finance was integral to the Thatcher revolution, tying together mortgage markets, household debt, and boom-bust cycles as early as the mid-1980s. We also show how policy-makers in this period were aware of all the weaknesses of this growth model, to the point that they effectively diagnosed what would happened in 2008, back in 1987. We argue that selecting for a finance-led growth model as the preferred growth model so early effectively rendered other possible growth models for the UK unattainable. The result was the shift from an economy characterised by ‘stop-go’ cycles in the post-war period to an economy characterised by recurrent ‘boom-slump-austerity-reset’ cycles in the Thatcher and post Thatcher periods. The 2008 crisis did not change this highly unstable mode of accumulation.     

绝处逢生

上次我们说的是＂我若为我,我是何人＂在创业中的体现,这次我们来讲讲在逆境中,人怎样改变自己的命运,来实现对自己与社会的责任。本来《圣经》没有书写下来,而都是口口相传的。最后写下来的只是原来《圣经》的一部分,其它的大都失传了,所以口授的《圣经》（密西拿）在犹太教当中也占有非常重要的地位。上次提到的生活在公元前一世纪的拉比沙迈（Shamai）与大祭司希列尔（Hilel）是他们那一代唯一口授《圣经》的人,犹太人将后来收集起来的他们的话看作是含有某种神秘色彩的智慧。希列尔有一句非常著名的话：＂我不为我,谁人为我？我若为我,我是何人？若非现在,     

Here it comes: defined contribution health care

The Patient Protection and Affordable Care Act includes provisions to make the individual health insurance marketplace one where all Americans, including those with preexisting health conditions, can obtain affordable coverage. At the same time, the act has failed to address, in any significant way, many of the underlying flaws in the current U.S. health care system that have caused costs to spiral out of control. The combination of persistent U.S. health care cost increases and a viable individual health insurance marketplace will cause a sea change in employer-sponsored health care offerings that is similar to that seen among employer-sponsored retirement benefit plans: movement away from defined benefit approaches and toward defined contribution designs. Although the authors show parallels between the evolution of employers' health care and retirement offerings, they explain why certain key developments will need to occur before defined contribution approaches become as prevalent in employer-sponsored health care plans as they are in today's employer-sponsored retirement plans.     

Price control and advertising in franchising chains

This study investigates how franchising chains use advertising to enhance coordination and improve their control over prices set at franchised outlets. We argue that chains use price advertising to inform customers about their desired prices, thereby influencing franchisees to adopt the advertised prices although they are not contractually required to do so. We test our hypotheses using rich outlet‐level price data collected before and after a U.S. nationwide advertising campaign by McDonald's. Our findings indicate that advertising is an effective mechanism that franchising chains use to improve their control over franchisees, enhance uniformity, and reduce franchisee free‐riding. Copyright © 2013 John Wiley & Sons, Ltd.