Measuring Producers' Risk Preferences: A Global Risk-Attitude Construct

In applied agricultural economic research various risk-attitude elicitation techniques are used. Here, we investigate whether risk-attitude measures rooted in the expected utility framework are related to measures rooted in the multi-item scale framework. Using a second-order factor analytical model, and data obtained from personal computer-guided interviews with 373 farmers, we investigate whether the common variance among the (latent) risk-attitude measures can be accounted for by a global risk-attitude construct. We find that the different risk-attitude measures are related, and that the global risk-attitude construct is significantly related to farmers' intention to use futures contracts. Our research suggests that farmers' risk attitude is a higher-order characteristic that cannot be effectively extracted by a single measure.     

Alternatives to Resistance? Comparing Depoliticization in Two British Environmental Movement Scenes

Processes of politicization and depoliticization are increasingly studied in relation to urban contexts, and cities have been depicted as incubators of social movements. What has been largely ignored is why, in some cities, forces of politicization or depoliticization are stronger than in others. To address this question, this article compares two British cities—Manchester and Bristol—which have historically been central hubs of environmental resistance, but currently face similar depoliticizing forces: austerity, anti-squatting laws, police repression and activists’ disillusion with environmentalism. Curiously, these conditions have had very different impacts on the two environmental scenes. In Manchester they have caused environmental resistance to become replaced almost entirely by non-confrontational ‘alternatives’. In Bristol alternatives have emerged that tend to be in synergy with environmental resistance. The comparison thus suggests that Bristol is more conducive to maintaining environmental resistance under depoliticizing conditions. Findings suggest that differences can be attributed to features of the physical urban environment, including city size. Historically, these differences were not decisive. Yet, after a period of dwindling environmentalist energy in the UK, the number of environmentalist hubs has been reduced. This has prompted a reputational snowball that increasingly concentrates environmental resistance in the one city that best insulates the environmental movement from broader depoliticizing forces.     

Pricing of commercial real estate securities during the 2007–2009 financial crisis

We study the relative and absolute pricing of CMBX contracts (commercial real estate derivatives) during the recent financial crisis. Using a structural CMBX pricing model, we find little systematic mispricing relative to REIT equity and options. We do find short-term deviations from this relative pricing relationship that are statistically and economically significant. In particular, the CMBX market temporarily overreacts to news announcements. We provide evidence that this temporary mispricing is caused by price pressure due to hedging activities. Finally, an absolute pricing analysis provides no substantial evidence that CMBX contracts traded at fire sale levels during the crisis.     

Earnings Announcement Lags and Market Responses—Does the Tone of the News and the Market Sentiment Matter?

We investigate earnings announcement lags (period from the end of the reporting period until the announcement date) for the good and the bad quarterly earnings news across different market sentiment periods as well as market reactions thereto. Companies listed on Baltic stock exchanges exhibit clear signs of strategic timing of earnings announcements. Earnings announcement lags for the bad news tend to be longer than those for the good news. This difference is more pronounced during low market sentiment periods. If the release of the bad news is postponed, abnormal return responses remain lower, as expected.     

Risk attitudes and the structure of decision‐making: evidence from the Illinois hog industry

Research offers mixed evidence about the risk management decision‐making process of producers. Whether producers’ characteristics drive behavior directly or through risk attitude remains a puzzle. We assess whether managerial/firm characteristics directly affect choices or if their influence occurs indirectly through impacts on risk attitude. The findings, which support indirect effects, indicate that failure to represent relationships between risk attitude, other characteristics, and behavior appropriately can mask the effect of risk attitude. A more complete understanding of the structure of decision‐making may assist economists, policymakers, and industry stakeholders in designing and targeting mechanisms to manage or transfer risk.     

Relationship marketing's role in managing the firm-investor dyad

This paper develops an interdisciplinary conceptual framework demonstrating the role of marketing in managing investor relationships. The framework illustrates how companies can turn investor relationships into market-based assets by analyzing and managing them from a relationship marketing and stakeholder perspective. Marketing can contribute to investor relationship management and increase shareholder value by lowering the cost of equity capital, increasing analyst coverage and stock liquidity, and reducing shareholder activism. An investigation among investor relations professionals working at publicly traded companies in the Euronext 100 stock index demonstrates the framework's empirical validity and provides managerial implications.     

Libor Market Models versus Swap Market Models for Pricing Interest Rate Derivatives: An Empirical Analysis

We empirically compare Libor and Swap Market Models for the pricing of interest rate derivatives, using panel data on prices of US caplets and swaptions. A Libor Market Model can directly be calibrated to observed prices of caplets, whereas a Swap Market Model is calibrated to a certain set of swaption prices. For both models we analyze how well they price caplets and swaptions that were not used for calibration. We show that the Libor Market Model in general leads to better prediction of derivative prices that were not used for calibration than the Swap Market Model. Also, we find that Market Models with a declining volatility function give much better pricing results than a specification with a constant volatility function. Finally, we find that models that are chosen to exactly match certain derivative prices are overfitted; more parsimonious models lead to better predictions for derivative prices that were not used for calibration.     

Is Default Event Risk Priced in Corporate Bonds?

This article provides an empirical decomposition of the default,liquidity, and tax factors that determine expected corporatebond returns. In particular, the risk premium associated witha default event is estimated. The intensity-based model is estimatedusing bond price data for 104 US firms and historical defaultrates. Significant risk premia on common intensity factors andimportant tax and liquidity effects are found. These componentsgo a long way towards explaining the level of expected corporatebond returns. Adding a positive default event risk premium helpsto explain the remaining error, although this premium cannotbe estimated with high statistical precision.     

RISK AND HEDGING BEHAVIOR: THE ROLE AND DETERMINANTS OF LATENT HETEROGENEITY

The notion of heterogeneous behavior is well grounded in economic theory. Recently it has been shown in a hedging context that the influence of risk attitudes and risk perceptions varies for different segments using a generalized mixture regression model. Here, using recently developed individual risk attitude measurement techniques and experimental and accounting data from investors with differing decision environments, we examine the determinants of heterogeneity in hedging behavior in a concomitant mixture regression framework. Allowing for latent heterogeneity, we find that risk attitudes and risk perceptions do not influence behavior uniformly and that the heterogeneity is influenced by manager's focus on shareholder value and the firm's capital structure.     

Effects of the redevelopment of an elementary school playground

The effects of the redevelopment of an elementary school playground were evaluated by comparing the situation before and after physical transformation. Observations produced data on the actual use during play time. Interviews were held with all the pupils on their perception and evaluation of the change. A group of adult experts judged the environment before and after the change on aspects like complexity, ‘manipulability’ and ‘affordance’ for different activities. An interview with the designer of the plan gave information about his intentions and expectations, especially regarding behavioural aspects. Data from these different sources are presented and related to each other.