Earnings management and abnormal returns: Evidence from the 1970–1972 Price Control Regulations

We examine the association between abnormal returns and earnings management in the context of price control regulations to test the construct validity of the earnings management model. Abnormal returns are used as a market–based measure, and discretionary accruals are employed to measure earnings management. Our results support the hypotheses that (1) price control regulations affect firms' security prices negatively, (2) firms make income–decreasing discretionary accruals to increase the likelihood of price increase approval, and (3) firms that are affected most negatively by the regulations manage earnings more aggressively. We conclude that the earnings management model we use in this study is capable of predicting opportunistic discretionary accruals.     

Simultaneous Estimation of Legal and Illegal Supply and Demand: The Case of Motion Pictures

Prior research into illegal goods has typically looked at one-way effects, such as illegal demand on legal demand. This research investigates a previously unexamined component of the market, illegal supply. The authors examine the supply and demand of legal goods and their illegal counterparts as a market system of four interdependent components. This research makes theoretical and empirical contributions by evaluating illegal supply in this system. Simultaneous equations estimate each market component on the others using data from the motion picture industry. The results find illegal supply has no effect on legal supply (movie screens), positive effects on illegal demand (piracy downloads), and some effect on legal demand (box office revenues). Timing effects highlight this: illegal supply has a positive effect on legal demand during a film’s opening week, but no effect post-launch. The other market components have positive effects on illegal supply (except legal supply, which is negative in the opening week). Additionally, illegal demand has a negative effect on legal demand during the opening week of release, but not in the subsequent weeks. This finding alleviates prior research tension as to whether piracy helps or hurts legal sales, as omitting illegal supply could result in biased estimates.     

Employment and absenteeism in working-age persons with multiple sclerosis

Aims: To better understand the impact of the clinical course of multiple sclerosis (MS) and disability on employment, absenteeism, and related factors.

Materials and methods: This study included respondents to the North American Research Committee on Multiple Sclerosis Registry spring 2015 update survey who were US or Canadian residents, aged 18–65 years and reported having relapsing-remitting MS (RRMS), secondary progressive MS (SPMS), or primary progressive MS (PPMS). The RRMS and SPMS participants were combined to form the relapsing-onset MS (RMS) group and compared with the PPMS group regarding employment status, absenteeism, and disability. Multivariable logistic regression was used to examine the relationship between employment-related outcomes and factors that may affect these relationships.

Results: Of the 8004 survey respondents, 5887 (73.6%) were 18–65 years of age. The PPMS group (n?=?344) had a higher proportion of males and older mean age at the time of the survey and at time of diagnosis than the RMS group (n?=?4829). Female sex, age, age at diagnosis, cognitive and hand function impairment, fatigue, higher disability levels, ≥3 comorbidities, and a diagnosis of PPMS were associated with not working. After adjustment for disability, the employed PPMS sub-group reported similar levels of absenteeism to the employed RMS sub-group.

Limitations: Limitations of the study include self-report of information and the possibility that participants may not fully represent the working-age MS population.

Conclusions: In MS, employment status and absenteeism are negatively affected by disability, cognitive impairment, and fatigue. These findings underscore the need for therapies that prevent disability progression and other symptoms that negatively affect productivity in persons with MS to enable them to persist in the workforce.     

TV viewing: application of a formal choice model

Choices of television programs is viewed as a process of deciding among a set of alternative goods with zero prices. A choice model can thus be based purely on individuals' preferences for various characteristics of a set of shows available, incorporating the option of not watching if all shows are too dissimilar to these desires. The shows are first grouped according to salient characteristics and a preferred value for each characteristic is estimated for each potential viewer. A perceived position of each show is similarly estimated and watching is shown to decline as similarity between preferred show and available alternatives declines. The choice model predicts show choice better than simpler models based on aggregate audience measures or on network loyalty, but the explanatory power is weak; some suggestions for improvement are made.     

Volunteering time decisions: a multi‐factor experimental study

Non‐profit organizations often seek volunteers to help staff a fundraising event. In the present research, an experimental study assessed volunteering time decisions for a fundraising event following manipulations of opportunity cost valence, opportunity cost avoidability and question order involving donating time and donating money. Opportunity costs represent foregone alternatives sacrificed (e.g. working) when engaging in an activity (e.g. volunteering), with valence of the opportunity cost indicating the appeal (positive or negative) of the foregone alternative and avoidability of the opportunity cost suggesting how easy it would be to forgo the alternative. Prospective donors are often asked to consider both volunteering time and contributing money, and these two questions posed to individuals can be varied in terms of order. The results of the experiment revealed that individuals intended to volunteer the most time when an opportunity cost was negative and avoidable. The lowest time donation intentions occurred when an opportunity cost was positive and less avoidable with individuals also being asked about donating money prior to being asked to donate time. The results highlighted the importance to non‐profit firms of considering opportunity costs potential volunteers face and suggested care in structuring the order of questions involving time and money posed to those individuals. Copyright © 2011 John Wiley & Sons, Ltd.     

Who votes for public environmental goods in California?: Evidence from a spatial analysis of voting for environmental ballot measures

Voting referenda provide direct evidence of the demand for public goods. A number of previous studies have used referenda to analyze the support for public environmental goods. These studies have used aggregate data from large jurisdictional units (usually counties) and summary income measures such as the mean or median, and have usually found that higher income areas offer greater support for environmental propositions. We examine environmental referenda voting in California using census block group data, spatial dependence controls, and detailed income distribution data. We find that household income has a negative marginal effect on environmental referenda voting for most of the income range when using census block data. In addition, controls for spatial dependence significantly reduce the magnitude of most coefficients. This suggests that OLS estimates of referenda determinants are biased. We also show that county level data may be subject to severe aggregation bias and might not be appropriate for referenda studies.     

A change in market microstructure: the switch to electronic screen trading on the New Zealand stock exchange

The New Zealand Stock Exchange (NZSE) switched from open outcry trading to an electronic screen trading system on June 24, 1991. The change was made by the members of the exchange to improve the trading system and to reduce costs. This paper investigates empirically whether improvement was achieved through a reduction in transaction costs. The tests and results focus on order-flow migration to the exchange from alternative execution locations and changes in bid-ask spreads. On balance, we conclude that transaction costs have declined.     

Lord Acton and Employment Doctrines: Absolute Power and the Spread of At-Will Employment

This study analyzes the at-will employment doctrine using a tool that encompasses the complementarity of results-based utilitarian ethics, rule-based duty ethics, and virtue-based character ethics. The paper begins with a discussion of the importance of the problem followed by its evolution and current status. After describing the method of analysis, the central section evaluates the employment at-will doctrine, and is informed by Lord Acton’s dictum, “power tends to corrupt, and absolute power corrupts absolutely.” The conclusion explores the implications of the findings. This is a revised version of a paper presented at the World Ethics Forum, Oxford University, Oxford, UK April 9–12, 2006.     

Low price conspiracy: Trade regulation and the case of Japanese electronics

Conclusion The analysis of low price conspiracy suggests that even if it were legal, it requires very special and uncommon conditions. Such conditions were not present in the U.S. television industry, and the Supreme Court correctly concluded that the evidence did not support the existence of a low price conspiracy involving Japanese television manufacturers. The Court indicated that persuasive actual cost evidence must be presented to overcome economic logic that predation is very unlikely. Predation can still be shown but the standard of proof is high. After all allegations of low price conspiracy may be more likely to limit competition than any actual low price conspiracy itself.