Pension-Plan Real Estate Investment in an Asset–Liability Framework

This study explores the role of pension-plan real estate investment in an asset–liability framework. By assuming that the pension-plan manager wishes to have assets of at least equal value to the liabilities at all points in time, an asset selection process is derived which depends on both the asset's covariance with other assets and its covariance with the liability stream. We generally find real estate not to be highly correlated with pension-plan liabilities. This finding is of general interest, since it helps to explain why pension-plan real estate investment is extremely limited and much smaller than one would expect if pension-plan investors cared only about the mean and variance of the real return to their invested wealth.     

Economic Incentives and Foster Care Placement

Using micro-level data on children entering foster care in 1998, we estimate how the financial compensation paid to foster caregivers affects the placement of foster children. Controlling for observable child and county characteristics as well as for unobservable state effects, our estimates indicate that a $100 increase in the basic monthly foster care payment reduces the number of children placed in group homes by 28.7%, with more children instead going to nonrelative foster homes. Further estimates indicate that the children moved out of group homes are equally likely to be placed in two-parent and single-parent homes, but they are disproportionately placed with caregivers who do not share the child's race or ethnicity. Finally, a $100 increase in foster care payment will decrease the number of times the average child is moved from one foster placement to another by 20%.     

Alternatives for addressing major challenges in teaching introductory auditing courses

Due to the numerous and extensive recent changes in business, regulatory, and auditing environments, instructors are faced with difficult choices when designing an introductory auditing course that sufficiently meets the needs of students and the firms that will employ them. Instructors whose students are primarily hired by firms that audit SEC registered companies, for example, might allocate significant class time to PCAOB Auditing Standard No. 5 [Public Company Accounting Oversight Board (2007). Board proposes new standard on internal control over financial reporting. www.pcaob.com]. On the other hand, instructors whose students are primarily hired by firms that audit non-SEC registered companies, might allocate significant class time to reviews and agreed-upon procedure services. This paper presents four alternatives for designing introductory auditing courses, and discusses some of the major issues and constraints that instructors should consider in choosing which alternative best suits their needs. Finally, the paper provides an example that illustrates the differences among the four alternatives by discussing how each might incorporate one such specific regulatory change—PCAOB Auditing Standard No. 5.     

Evidence of Adverse Selection from Thoroughbred Wagering

Previous research has shown the thoroughbred sales market to be affected by adverse selection. In the market, sellers who race as well as breed thoroughbreds will choose to keep thoroughbreds when their estimated private values exceed expected sales prices. The presence of asymmetric information leads these sellers to sell their low-quality horses and keep their best for racing. We extend the analysis by examining how bettors use similar information when wagering on thoroughbred races. We show, using a sample of two-year-old maiden races, that homebreds (those horses kept by their breeders for racing) are favored over otherwise similar nonhomebreds.     

Regulation versus pricing in urban water policy: the case of the Australian National Water Initiative

The Australian National Water Initiative (NWI) builds on the foundations of earlier water reforms, attempts to correct earlier errors in both policy and its implementation, and seeks to better define some of the policy aims with the benefit of hindsight. However, despite the deliberate effort to improve on earlier reforms, the NWI still embodies a significant economic paradox. Although policymakers have shown their faith in the market insofar as allocating water between competing agricultural interests is concerned, they have not shown the same degree of faith in the ability of urban users to respond to price signals. This paper attempts to shed at least some light on this question by examining the responses of a number of State governments across Australia to the NWI. The paper specifically explores the rationale for non-price regulation in the urban context but challenges the long-term viability of this approach.     

Social Ad Lessons

NEW YORK Social wunderkinds like MySpace and Facebook face a dilemma： advertising in these environments is a decidedly hit-and-miss affair. For all their potential, they＇re tough for advertisers to figure out.     

A Methodological Evaluation of Empirical Demand Systems Research

This paper examines recent demand systems literature from a methodological standpoint. A survey of the empirical demand systems literature has been assembled that includes 66 articles from 19 separate journals. The paper classifies empirical demand studies according to different methodological paradigms to ascertain if there is a pattern in the demand systems literature and to determine the implications of that classification. The results indicate that the bulk (67%) of demand systems research is implicitly falsificationist (for at least part of the research program). The remainder of the research program follows a conventionalist doctrine.