Embedded Options in the Mortgage Contract

Loss mitigation is the process by which lenders attempt to minimize losses associated with foreclosure. As competition increases in the mortgage industry, lenders and servicers are under great pressure to adopt loss mitigation tactics rather than simply use foreclosure as the means of dealing with borrowers in default. This study presents a mortgage-pricing model that fully specifies all borrower options with respect to default, including the ability to reinstate the mortgage out of default. We document the impact of various loss mitigation programs, including forbearance and antideficiency judgments, as well as the value of credit on borrower default behavior.     

Legal Restrictions in Personal Loan Markets

This study examines the pricing of personal loans in the form of second mortgages to determine whether state-specific default laws have an effect on the availability and cost of that debt. We examine the pricing of loans to higher risk borrowers and whether borrowers in states that limit lender ability to seek default remedies pay higher credit costs. Our results indicate that, for the most part, lenders rationally price loans to higher risk borrowers. However, when we focus on borrowers with low credit scores, the results indicate that mean actual loan rates are higher than those predicted by our model. The results also indicate that state-specific default laws have an effect on the price of credit. Finally, the results show that there is a greater degree of error in the pricing of second mortgage loans to borrowers with low credit scores than to borrowers with high credit scores.     

REIT Capital Budgeting and Equity Marginal q

Equity marginal  q  is the change in the market value of a company's equity in response to a one-unit unexpected change in its asset base. Hence, it is a profitability index that evaluates a firm's capital budgeting decisions at the margin. We estimate the equity marginal  q  for real estate–managing public corporations, namely, real estate investment trusts (REITs), in an attempt to understand how the various costs and benefits of being a public corporation play a role in managing this important asset class. Using the universe of equity REITs for the period from 1993 to 2005, we find that REITs with greater idiosyncratic volatility, higher stock turnover and smaller bid-ask spread have a higher equity marginal  q . In addition, both the holdings of institutional investors and their investment horizons are respectively positively related to equity marginal  q.  With these firm characteristics taken into account, firm size is found to be negatively related to equity marginal  q . Our findings are economically important as well, because the equity marginal  q  ratio alone accounts for approximately one-third of the total REIT shareholder wealth change during the study period.     

Food assistance programs and food insecurity: implications for Canada in light of the mixing problem

In light of concerns about high rates of food insecurity, some have suggested that it might be time for Canada to implement national food assistance programs like those provided in the US, namely the Supplemental Nutrition Assistance Program (SNAP) and the National School Lunch Program (NSLP). In this paper, we assess how adopting these types of assistance programs would change the food insecurity rate in Canada among households with children. Using data from the Current Population Survey (CPS), we first evaluate the causal impact of these programs on food insecurity rates in the US using the Canadian definition of food security. Following other recent evaluations of food assistance programs, we use partial identification methods to address the selection problem that arises because the decision to take up the program is not random. We then combine these estimated impacts for the US with data from the Canadian Community Health Survey (CCHS) to predict how SNAP and NSLP would impact food insecurity rates in Canada. Partial identification methods are used to address the “mixing problem” that arises if some eligible Canadian households would participate in SNAP and others would not. The strength of the conclusions depends on the strength of the identifying assumptions. Under the weakest assumptions, we cannot determine whether food insecurity rates would rise or fall. Under our strongest nonparametric assumptions, we find that food insecurity would fall by at least 16% if SNAP were implemented and 11% if NSLP were implemented.     

Experiential cultural intelligence development: context and individual attributes

Cultural intelligence (CQ) represents advancement in the area of international human resources management and cross-cultural training. An experiential approach to CQ training is developed and analyzed. A diverse, multicultural group of over 370 participated. General self-efficacy and contextual aspects related to Contact Theory were found to be significant to training outcomes in CQ development. In crafting the most effective CQ training and education, organizations and international human resources staff can benefit from understanding individual and contextual influences. Our experiential approach to CQ education appears to hold promise and adds to the literature by producing a specific approach.     

Understanding the Motivation and Travel Behavior of Cycle Tourists Using Involvement Profiles

Bicycle tourism is a growing niche tourism market which has potential economic, social, and environmental outcomes for individual participants and host communities. However, there has been a lack of research into heterogeneity of this market and their respective motivations and behavior. This article applies the concept of enduring involvement, in conjunction with tourist motivational theory, to segment and better understand cycle tourist behavior and intentions. A total of 564 completed questionnaires was collected from an online survey of bicycle club members in Australia. Respondents were segmented into five initial clusters by their level of enduring involvement. A number of significant differences were found on their travel motivations, travel behavior, and behavioral intentions, as well as their sociodemographics and cycling behavior. The results lend support to the application of enduring involvement in a tourism context to better understand the behavior of niche markets which include popular leisure pursuits. Recommendations as a result of the findings are made for product development and marketing communication, while future research opportunities are also outlined.     

The effects of the BSE outbreak on the security values of US agribusiness and food processing firms

Economic studies using aggregate data generally find that higher taxes are the most effective policy to reduce drunk driving while criminologists report strong evidence supporting law enforcement measures in policy evaluations. This paper evaluates these differing perspectives using the aggregate data that is typically used in the economic literature. OLS and fixed effects models show that police can affect the probability of arrest for drunk driving and, in combination with evidence from DUI deterrence experiments, this suggests that the failure of economic models to detect deterrence reflects the lack of systematic and sustained police efforts against DUI.     

Willingness to pay for flying carbon neutral in Australia: an exploratory study of offsetter profiles

Although voluntary carbon offsets have played a key role in the response to addressing climate change in the aviation sector, little is known about consumer preferences for such offsets and their offsetting behaviour in Australia. This paper developed and applied a choice modelling study to measure the economic values of aviation carbon mitigation and to identify major factors influencing air travellers’ voluntary climate action. Results show that respondents have a mean willingness to pay (WTP) of AU$21.38 per tonne of CO₂ reduced in the form of voluntary carbon offsets per person. Female travellers might have a higher economic value of carbon mitigation than male counterparts while climate sceptics who are less likely to be carbon offsetters might in fact hold a higher WTP value than non-sceptical travellers. The findings suggest that in terms of WTP the best profile of offset projects might be renewable energy projects in developing countries, of which resulting carbon credits can reduce company legal liabilities. Positive support was found for mitigation measures by airlines, with technological efficiencies more strongly supported than operational practices and biofuels. This paper challenges previous understandings of environmentally motivated behaviour, and notes that behaviour profiles are still evolving.     

The role of cognitive appraisal,emotion and commitment in affecting resident support toward tourism performing arts development

Abstract

While residents’ perceptions of tourism development have been widely explored through a rational cost-benefit lens, little is known about residents’ emotional responses and their influences on resident support toward tourism development. By integrating cognitive appraisal theory and affect theory of social exchange, this study examines the psychological factors (cognitive appraisals, emotions, and commitment) that underlie residents’ behaviors toward Tourism Performing Arts (TPA) development. Based on a survey of 435 residents undertaken in Yangshuo, China, the results reveal that outcome desirability, fairness and coping potential are significant antecedents differentiating resident positive and negative emotional responses toward TPA developments. Commitment was found to moderate the relationship between resident negative emotions and supportive behaviors and played a significant role in shaping resident behaviors. Additionally, resident support was found to be influenced by negative emotions rather than positive emotional responses toward TPA development. The findings have implications for alleviating resident hostility, cultivating commitment toward specific types of tourism, reducing community conflicts and obtaining local support for sustainable tourism development.     

Strategic Issues in the Australian Tourism Industry: A 10-year Analysis of National Strategies and Plans

Predicting future events, trends and issues that may affect the tourism industry is not an exact science. Already the 21st century has seen a number of significant, radical and unexpected events, including September 11, SARS and, more recently, the worldwide economic downturn and natural disasters, such as earthquakes and cyclonic activity. Within this increasingly volatile global landscape, more than ever there is a need for the tourism industry to embrace a disciplined, structured and continuous approach to identifying and monitoring future trends and issues to inform policymaking and strategic planning. Yet in Australia it has been claimed that a preoccupation with marketing and short-term tactical planning, at the expense of long-term, strategic thinking, has led to limited planning perspectives for tourism. To explore these claims, this paper reports on a content analysis of 28 Australian national-level tourism strategic planning documents across a 10-year period (2000–2009 inclusive).