Testing for Linear and Nonlinear Granger Causality in the Stock Price-Volume Relation

Linear and nonlinear Granger causality tests are used to examine the dynamic relation between daily Dow Jones stock returns and percentage changes in New York Stock Exchange trading volume. We find evidence of significant bidirectional nonlinear causality between returns and volume. We also examine whether the nonlinear causality from volume to returns can be explained by volume serving as a proxy for information flow in the stochastic process generating stock return variance as suggested by Clark's (1973) latent common-factor model. After controlling for volatility persistence in returns, we continue to find evidence of nonlinear causality from volume to returns.     

The Intergenerational Supply of Loggers Under Conditions of Declining Economic Well-Being

This paper addresses the supply-side explanations of a logger shortage by estimating an occupational choice model that considers the role of earnings, nonpecuniary determinants and intergenerational factors. Our results showed that: (1) relative earnings have no statistically significant effect on career choice; (2) improvement in the public image of loggers substantially increases entry into logging; and (3) a strong intergenerational supply linkage exists but is currently being eroded.     

LABOUR MARKET FLEXIBILITY AND EMPLOYMENT ADJUSTMENT: MICRO EVIDENCE FROM UK ESTABLISHMENTS

In this paper we study how firms react to demand shocks, examininghow different aspects of flexibility shape their responses.Our main findings are: (i) very few firms choose to adjust pricein response to a demand shock; (ii) firms with more flexibilityare more likely to respond to demand shocks by adjusting employmentand hours. Our results provide a microeconomic explanation forrecent macroeconomic evidence that labour input has become moreclosely aligned to the business cycle.     

WATER BILL ESTIMATION WHEN PRICE IS CRYPTIC: EXPERIENCE FROM WINDHOEK,NAMIBIA

For water policy to be effective, policy makers must know how water users perceive and respond to changes in water prices. However, it is not uncommon for water prices faced by consumers to be unclear. In Windhoek, Namibia, the marginal and average water price is difficult to calculate from the information provided in users' utility bills. This paper applies a hedonic pricing approach to investigate price perceptions of water users in a setting with cryptic price information. Using self‐reported water charges as the dependent variable, the pricing model utilises reported utility characteristics and other factors that may affect perceived price. Low‐income standpipe water users report a weighted average monthly charges of N$24.68, whereas users in high income segments report N$521.34. This reflects differences in service levels, possible subsidies to low‐income users and potential errors in respondents' understanding of their water price. Average price per litre (N$11.78 for the low‐use segment; N$1.89 for the highest segment of Tier 1 water use) tends to be perceived as higher by those with lower water use even though average prices in the relevant range should generally be identical.     

Inferring Transactions from Financial Statements*

In this paper, we embed the double entry accounting structure in a simple belief revision (estimation) problem. We ask the following question: Presented with a set of financial statements (and priors), what is the reader's “best guess” of the underlying transactions that generated these statements? Two properties of accounting information facilitate a particularly simple closed form solution to this estimation problem. First, accounting information is the outcome of a linear aggregation process. Second, the aggregation rule is double entry.     

The Bold and the Bankable: How the Nuestro Barrio Telenovela Reaches Latino Immigrants with Financial Education

This article presents and evaluates Nuestro Barrio, a Spanish‐language telenovela designed to reach Latino immigrants with financial education. Nuestro Barrio’s educational model is discussed in the context of the Transtheoretical Model of Behavior Change, which defines the stages individuals move through as they make incremental progress toward sustained behavior change. The Transtheoretical Model of Behavior Change is also used to inform a limited evaluation of the impact of Nuestro Barrio on viewer behavior. The empirical evidence is consistent with Nuestro Barrio’s intended educational effects, suggesting that Nuestro Barrio is particularly useful as a tool for raising viewer awareness.