The Contributions of Early Health-Insurance Programs to Mortality Declines in Pre-World War I Europe: Evidence from Fixed-Effects Models

The causes of the historical decline in European mortality rates are still vigorously debated. Our contribution is to examine a previously neglected aspect, the role of the early government-sponsored health-insurance programs in widening access to medical care. We construct and test fixed-effect models of mortality rates, using data for a panel of five European countries over the 1878–1913 period. After diagnostic tests of our results, we conclude that the expanding population coverage of these health-insurance programs contributed significantly to the observed declines in mortality.     

Survivor bias and mutual fund performance

Mutual fund attrition can create problems for a researcher becausefunds that disappear tend to do so due to poor performance.In this article we estimate the size of the bias by trackingall funds that existed at the end of 1976. When a fund mergeswe calculate the return, taking into account the merger terms.This allows a precise estimate of survivorship bias. In addition,we examine characteristics of both mutual funds that mergerand their partner funds. Estimates of survivorship bias overdifferent horizons and using different models to evaluate performanceare provided.     

Volatility in the foreign currency futures market

We examine the volatility implications of around-the-clock foreignexchange trading with transaction data on futures contractsfrom the Chicago Mercantile Exchange and the London InternationalFinancial Futures Exchange. We find higher U.S.-European andU.S.-Japanese exchange-rate volatilities during U.S. tradinghours and higher European cross-rate volatilities during Europeantrading hours. While the disclosure of private information throughtrading may partly explain these volatility patterns, we concludethat the increased volatility is more likely driven by macroeconomicnews announcements. An analysis of inter- and intraday dataalso reveals that volatility increases at times that coincidewith the release of U.S. macroeconomic news.     

Predictable risk and returns in emerging markets

The emergence of new equity markets in Europe, Latin America,Asia, the Mideast and Africa provides a new menu of opportunitiesfor investors. These markets exhibit high expected returns aswell as high volatility. Importantly, the low correlations withdeveloped countries' equity markets significantly reduces theunconditional portfolio risk of a world investor. However, standardglobal asset pricing models, which assume complete integrationof capital markets, fail to explain the cross section of averagereturns in emerging countries. An analysis of the predictabilityof the returns reveals that emerging market returns are morelikely than developed countries to be influenced by local information.