What's in a Name? An Experimental Examination of Investment Behavior

A fundamental unresolved issue is whether information asymmetries underlie investors predisposition to invest close to home (i.e., domestically or locally). We conduct experiments in the United States and Canada to investigate agents portfolio allocation decisions, controlling for the availability of information. Providing participants with information about a firms home base, without disclosing its specific identity, is not sufficient to change investment behavior. Rather, participants need to know a firms name and home base. Additional evidence indicates that participants have a greater perceived familiarity with local and domestic securities and, in turn, invest more in such securities.The authors thank Ann Gillette, Josef Zechner (the editor), and two anonymous referees for helpful comments and acknowledge the financial support of the Federal Reserve Bank of Atlanta, Georgia Tech, and Social Sciences and Humanities Research Council of Canada. The views expressed here are those of the authors and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System.     

Equilibrium Forward Curves for Commodities

We develop an equilibrium model of the term structure of forward prices for storable commodities. As a consequence of a nonnegativity constraint on inventory, the spot commodity has an embedded timing option that is absent in forward contracts. This option's value changes over time due to both endogenous inventory and exogenous transitory shocks to supply and demand. Our model makes predictions about volatilities of forward prices at different horizons and shows how conditional violations of the 'Samuelson effect' occur. We extend the model to incorporate a permanent second factor and calibrate the model to crude oil futures data.     

The impact of behavioural risk-reduction interventions on willingness to pay to avoid sexually transmitted infections: a stated preference study of justice-involved youth

Risky health behaviours, such as smoking, drinking and risky sex, are substantial contributors to the U.S. morbidity rates and healthcare costs. While economic models typically regard preferences as stable, a growing literature suggests that information, including how it interacts with intentions and attitudes, plays an important role in unhealthy behaviours. Relatedly, a large health literature demonstrates that theory-based behavioural interventions can successfully change risky behaviour. This study uses the contingent valuation (CV) survey method to investigate the impact of behavioural interventions on a novel outcome measure: the willingness to pay (WTP) to avoid the consequences associated with risky behaviour. Using novel pre- and post-intervention data from Project MARS (Motivating Adolescents to Reduce Sexual Risk), this study estimates the impact of the intervention on elicited WTP to avoid sexually transmitted infections (STIs). It is found that after the intervention, participants’ elicited WTP to avoid STIs were significantly higher, and more sensitive to differences in infection severity. These results suggest that the intervention may affect risky sexual behaviour by changing the perceived value of avoiding the consequences of risky sexual behaviour. Additionally, these findings contribute to an ongoing debate regarding the construct validity of CV studies in health economics.     

Addressing gender in agricultural research for development in the face of a changing climate: where are we and where should we be going?

Agricultural development efforts that do not address persistent gender gaps miss opportunities for greater impact. This synthesis reflects on key findings from integrated quantitative and qualitative analyses at the nexus of gender, agricultural development, and climate change. Linked farm household-, intrahousehold-, community-, and institutional-level data highlight significant and nuanced gender differences in adaptive capacity of individuals and communities to respond to climate change. The gender gap is also substantial in exposure to climate change and its impacts, and uptake of new practices that lower vulnerability. Women in agriculture will remain largely neglected by information and service providers unless their differing needs, access to, and control over resources are considered at policy and project design stage. Yet clear guidelines for addressing the needs of both men and women in different environments and agricultural systems are still lacking. Participatory ‘action research’ approaches with a focus on co-learning, and using innovative cell phone or social media-based approaches offer exciting new opportunities. Agricultural development decision-makers and project designers need to ‘design with gender in mind’. Equipping them with tools and knowledge of innovative gender-transformative practices and intervention options and creating accountability for serving women and men will be key.     

Structuring the Smartphone Industry: Is the Mobile Internet OS Platform the Key?

With the launch of the original iPhone, Apple redefined the “smartphone” product category and accelerated the convergence of traditional mobile telephony, Internet services, and personal computing into a new industry. As these sectors merge into a single device, formerly separate industry architectures and their constituent firms are being forced into direct competition. We test theories of industry architecture and technological platforms regarding their ability to explain the strategies of key entrants in navigating the transition. We analyze in detail the actions and strategies of four major competitors, including Apple, Google, Microsoft, Nokia, and, more briefly, Research in Motion and HP/Palm, from the framework of technological platform theory. Our analysis suggests that currently some competitors are following traditional platform strategies, but that Google and Apple appear to have adopted strategies at odds with platform literature. We examine how the dynamics of this convergence may lead to a reconsideration of certain tenets of platform theory.     

Law and industrial buyer-seller relationships: The privatization of a Mexican State-Owned steel company

This article examines the impact of privatization on the purchasing practice of a state-owned steel company in Mexico. It looks first at the changes in the law which affect the relationships of state-owned enterprises with their suppliers. It then presents possible implications of these legal changes for buyer-seller relationships drawn from transaction-cost and institutional theory. Finally, it compares the predicted and actual impact of privatization and draws some preliminary conclusions. © 1993 John Wiley & Sons, Inc.     

Estimation of the Rental Adjustment Process

Rental adjustment equations have been estimated for a quarter century. In the United States, models have used the deviation of the actual vacancy rate from the natural rate as the main explanatory variable, while in the United Kingdom, drivers of the demand for space have dominated the estimation. The recent papers of Hendershott (1996) and Hendershott, Lizieri and Matysiak (HLM 1999) fall into the former category. We reestimate these equations using alternative formulations and present evidence that changes in real interest rates were not capitalized into Sydney and London real land prices. We then derive a model incorporating supply and demand factors within an Error Correction framework and show how the U.S. and U.K. traditions are special cases of this more general formulation. We next estimate a two-equation variant with a separate vacancy rate equation using data from the City of London office market. This model allows calculation of the underlying price (rent) and income (employment) elasticities and explains the data marginally better than the HLM model. Importantly, our model passes standard modern econometric requirements for unit roots and cointegration.     

Implementing QALYs in the Analysis of Air Pollution Regulations

In recent years, there has been growing interest in cost-effectiveness analysis for environmental regulations using quality-adjusted life years as the measure of effectiveness. This paper explores the implications of the QALY approach for measuring the impacts of air pollution regulations, with an example using the U.S. Environmental Protection Agency’s Heavy Duty Engine/Diesel Fuel regulations. The paper also examines the issues surrounding the potential use of QALY measures in cost-benefit analysis for air pollution regulations. Key findings are that, compared with a cost-benefit approach, the QALY framework gives more weight to reductions in incidence of chronic disease relative to reductions in premature mortality risk, especially when the mortality risk reductions occur in older populations. In addition, use of monetized QALYs in cost-benefit analysis is not recommended, due to fundamental differences in the theoretical grounding of the different measures. However, application of monetized QALYs based on age-specific willingness to pay (WTP) for mortality risk reductions gives very similar results to typical cost-benefit analysis for mortality risk reductions, as opposed to using values for QALYs based on non-age specific WTP. The paper concludes that in cases where mortality provide the majority of a regulation’s impacts, QALY based cost-effectiveness analysis and WTP based cost-benefit analysis may not differ in their conclusions. However, in cases where morbidity or non-health outcomes are significant, cost-effectiveness and cost-benefit analysis may result in different evaulations of the efficiency of the regulation.