An analysis of “exactly distributed” test statistics for multivariate event tests

In this paper we derive a rule that identifies when exact tests may be used in the context of the multivariate regression model. Our derivation extends distribution theory reported in Rao (1973) and leads to the specification of exact tests for several event study hypothesis forms of interest to accounting and finance researchers. For tests where the event parameter is constrained to be equal across firms, we show that an infinite set of exact tests is available, of which the well known portfoliot-test is a special case. We conduct simulations using data from the CRSP Daily Returns file, and find that several test statistics, including exactly distributed statistics derived using the multivariate regression model, significantly over-reject the hypotheses examined.     

Brain wave analysis. An electroencephalographic technique used for evaluating the communications-effect of advertising

The results from the authors's applied research studies of communications-effect and electroencephalographic (EEG) recording, which took place over the last ten years, employing thousands of respondents, are integrated in this paper. Application of EEG methodology to ad research, rather than theory, is stressed. Brain Wave Analysis

1 Brain Wave Analysis is a service mark of NeuroCommunication Research Laboratories, Inc., for its brand of EEG service.

, an EEG technique, is described. A positive relationship determined between Brain Wave Analysis and sales is discussed, as well as various applications such as “brain typing” the target market. The application of Brain Wave Analysis in determining effective advertising frequency is discussed as it relates to Krugman's three exposure theory. The continuing development of EEG analysis is briefly discussed.     

Bank concentration and financial constraints on firm-level investment in Europe

This study examines the effect of bank concentration on financing constraints of non-financial firms in 14 European countries between 1992 and 2005. Using firm-level data we analyze financial constraints with the Euler equation derived from the dynamic investment model. We find that with a highly concentrated banking sector firms are less financially constrained. This result is robust to consideration of firm opacity, firm size, and business cycle. Relaxation of financial constraint while greater for firms in less opaque industries also accrues for firms in more opaque industries. Greater bank concentration is associated with less tight financial constraint during both expansions and recessions. Results overall are consistent with an information-based hypothesis that more market power increases banks’ incentives to produce information on potential borrowers. Findings are robust to consideration of country specific institutional factors.     

Seemingly unrelated nonlinear regressions

The article considers the estimation of the parameters of a set of nonlinear regression equations when the responses are contemporaneously but not serially correlated. Conditions are set forth such that the estimator obtained is strongly consistent, asymptotically normally distributed, and asymptotically more efficient than the single-equation least squares estimator. The methods presented allow estimation of the parameters subject to nonlinear restrictions across equations. The article includes a discussion of methods to perform the computations and a Monte Carlo simulation.     

Experimental Methods and Elicitation of Values

Experimental methods are currently being extensively used to elicit subjective values for commodities and projects. Three methodological problems are not systematically addressed in this emerging literature. The first is the potential for laboratory responses to be censored by field opportunities, so that lab responses can be confounded by uncontrolled knowledge of the field; the second is the potential for subjective perceptions about field opportunities, and hence valuation responses, to be affected by the institution used to elicit values; and the third is the potential for some elicitation institutions to influence subjective perceptions of characteristics of the commodity or project being valued, and hence change the very commodity being valued. All three problems result in potential loss of control over the value elicitation process. For example, we show that censoring affects conclusions drawn in a major study of beef packaging valuation. We derive implications for experimental designs that minimize the potential effect of these methodological problems.     

A two-sector overlapping generations model with heterogeneous capital

Summary. This paper characterizes the existence and stability properties of steady state solutions as well as the nature of transition paths of a two-sector growth model with heterogeneous capital. It compares the properties of a Cobb-Douglas–Leontief economy with heterogeneous capital with the properties of the same economy with homogeneous capital. The model with heterogeneous capital reveals a set of characteristics different to those of the model with homogeneous capital. These include the saddle-path stability of the non-trivial steady state as well as the possibility of overshooting and in contrast to the homogeneous capital case, the possibility of damped oscillations along the transition path for realistic parameter values. Received: September 21, 2001; revised version: November 21, 2002 RID="*" ID="*" We thank Costas Azariadis, and Laurie Conway for helpful comments on a previous draft. The paper has substantially benefited from the feedback of an anonymous referee. Correspondence to: R. Wendner     

Frames of reference, the environment, and efficient taxation

The effects of both habit formation and status concerns are analyzed within a model with short-lived households and a long-lived public good, environmental quality. Status seeking induces households to raise consumption of goods and leisure, and pollution, and to lower environmental quality. Habits exacerbate the social costs of status seeking. Efficient tax programs exist and are analyzed. Status seeking and habits are shown to raise efficient consumption and income tax rates. Moreover, an allocation induced by a sequence of short-lived governments is considered. The more important habits and status, to more mistakenly short-lived governments set tax rates relative to efficient rates. However, in case there exists a long-lived institution, when governments are short-lived, the competitive economy can be induced to attain the efficient allocation by a specific tax-transfer program.Received: January 2004, Accepted: September 2004, JEL Classification: H23, D62, D91, Q20Ronald Wendner: I am indebted to Kurt Annen, Karl Farmer, Nicolas Guigas, Christian Klamler, the participants of the Environmental Workshop at Stanford University, and two anonymous referees for insightful debates on a former version of this paper. The author thanks the Economics Department at Stanford University for hospitality provided during the formative stages of this research.     

Children's responses to TV advertising: Product versus premium orientation

Attention has focused on a call for a ban on premium offers in children's television ads. Key considerations for proposing a ban was reflected in the FTC's statements regarding the confusion and difficulties of choice when the injection of a premium becomes the selling point rather than product merit. The sparsity of previous research in this area led to this exploration of television advertising viewing of different commercial content as it affects the “consumer learning process” of a child. This basically involves a continuum of learning, from the simplest recall of specific marketing-oriented elements such as identification of product or sponsor to the more complex level of understanding the use or value of a particular product or service. Trends noted in this study give additional insight to the marketing practitioner concerning the types of elements a child can assimilate and to the child's understanding of the message.     

Mirabegron for the treatment of overactive bladder: cost-effectiveness from US commercial health-plan and Medicare Advantage perspectives

Background and objective: The first class of oral pharmacologic treatments for overactive bladder (OAB) are antimuscarinics that are associated with poor persistence, anticholinergic adverse events, and increased anticholinergic burden (ACB) with risk of cognitive impairment. Mirabegron, a β3-adrenoceptor agonist, is an oral treatment that does not contribute to ACB and has early evidence of improved persistence. The objective of the analysis was to assess the cost-effectiveness of mirabegron for OAB vs six antimuscarinics in the US.

Methods: A Markov state-transition model assessed US commercial health-plan and Medicare Advantage perspectives over a 3-year time horizon in an OAB patient population. Transition probabilities between five micturition and five incontinence severity states were derived from a network meta-analysis of 44 trials of oral OAB treatments. Therapy beginning with an oral OAB agent could discontinue or switch to another oral agent and could be followed by tibial nerve stimulation, sacral neuromodulation, or onabotulinumtoxinA. The primary outcome was cost per quality-adjusted life year (QALY). Utilities were mapped from incontinence and micturition frequencies as well as demographics. Based on analysis of data from a large healthcare system, elevated ACB was associated with increased healthcare utilization and probability of cognitive impairment.

Results: From both commercial and Medicare Advantage perspectives, mirabegron was the most clinically effective treatment, while oxybutynin was the least expensive. Tolterodine immediate release (IR) was also on the cost-effectiveness frontier. The analysis estimated costs per QALY of $59,690 and $66,347 for mirabegron from commercial health plan and Medicare Advantage perspectives, respectively, compared to tolterodine IR. Other antimuscarinics were dominated.

Conclusions: This analysis estimated that mirabegron is a cost-effective treatment for OAB from US commercial health plan and Medicare Advantage perspectives, due to fewer projected adverse events and comorbidities, and data suggesting better persistence.     

Black-White Disparities in Test Scores: Distributional Characteristics

This paper investigates the distributional characteristics of racial differences in mathematics achievement, with particular attention to the potential influence of unexplained, and possibly unwarranted, racial differentials in rates of school suspension. It is well known that black students consistently score lower than whites on achievement tests, on average, even after controlling for family and schooling factors. Using data from the National Longitudinal Survey of Youth 1997 cohort, we decompose the racial gap in mathematics test scores from the Peabody Individual Achievement Test-Revised (PIAT-R) into a component due to racial differences in underlying characteristics and another component that is unexplained by differences in measured characteristics. We account for the possible endogeneity of suspensions in our analysis and show that the portion of the racial gap that is unexplained differs between the top and the bottom of the test score distribution. Our results suggest that researchers should pay more attention to the problem of concentration of black students among those at the bottom of the distribution and their scarcity among those at the top of the test score distribution to better understand the factors that account for the observed disparities.