Strategic Auditor Behavior and Going-Concern Decisions

This paper analyzes a game-theoretic model in which a client can potentially avoid a going-concern opinion and its self-fulfilling prophecy by switching auditors. Incumbent auditors are less willing to express a going-concern opinion the more credible the client's threat of dismissal and the stronger the self-fulfilling prophecy effect. Similarly, the client is more willing to switch auditors the more likely it is that auditors' reporting judgments will differ and the stronger the self-fulfilling prophecy effect. Further, with greater noise in the auditor's forecast of client viability, the auditor tends to express fewer going-concern opinions.     

Housing and Mortgage Market Policies in Chile

This study provides a survey of the housing and mortgage market policies applied between 1976 and 1994 in Chile. These policies are implemented within the framework of a free-market economy in which the state plays a subsidiary role in the economic affairs of the nation. Of particular importance to the housing sector have been the elimination of interest rate and rent controls, the elimination of a specialized housing finance system, and the consistent application of an indexation scheme that preserves the real value of monetary contracts and that allows investors the recovery of their funds with a competitive real return.     

Residential Mobility Decisions in Japan: Effects of Housing Equity Constraints and Income Shocks under the Recourse Loan System

This paper draws on six waves of Japanese household longitudinal data (Keio Household Panel Survey, KHPS) and estimates a conditional fixed effects logit model to investigate the effects of housing equity constraints and income shocks on own-to-own residential moves in Japan. By looking at contemporaneous extended Loan-to-Value (ELTV) and extended Debt-to-Income (EDTI) ratios under the recourse loan system, we examine whether housing equity constraints and negative income shocks have any impact on own-to-own residential moves. Taking account of the specific nature of the recourse loan system in Japan, we further investigate whether these effects are different between positive and negative equity households. The estimation results show that housing equity constraints and negative income shocks significantly deter own-to-own residential moves for positive equity households.     

Issuance Decisions and Strategic Focus: The Case of Long-Term Care Insurance

Increasing costs of long-term care are placing ever greater burdens on state and federal budgets, yet private long-term care insurance remains a relatively minor financing vehicle. Although many researchers provide rationales for the limited private market, some life–health insurers have forged ahead into this relatively new and risky line of business. We investigate what makes these insurers different and whether managers are following a diversification or strategic focus strategy. We find that strategic focus is a consistently important factor and that managers' participation and volume decisions are made independently.     

Macroprudential Policies and Housing Prices: A New Database and Empirical Evidence for Central,Eastern, and Southeastern Europe

Several countries in Central, Eastern, and Southeastern Europe used a rich set of prudential instruments during the recent credit and housing boom and bust cycles. We construct a comprehensive database of these policy measures covering 16 countries at a quarterly frequency. We use this database to investigate whether the policy measures had an impact on housing price inflation. The measures that appeared to be effective were capital measures (minimum capital adequacy ratio, maximum ratio of lending to households to share capital) and nonstandard liquidity measures (marginal reserve requirements (MRRs) on foreign funding, MRRs linked to credit growth).     

住房、便利设施与异质性劳动力流动——微观机制与福利效应

通过构建住房和便利设施供给内生的空间均衡模型,运用人口调查数据和反事实检验方法,本文考察了住房成本和便利设施水平变动影响异质性劳动力流动的微观机制及其福利效应。研究发现:(1)住房成本随着异质性劳动力向城市集聚而显著上涨,但城市便利设施水平的提高主要得益于高技能劳动力就业规模的扩大,低技能劳动力就业增长的贡献并不显著;(2)住房成本上涨与便利设施水平提高进一步推动了异质性劳动力在城市间的流动与配置,反映在城市体系上,使得城市的规模分布分别呈现出扁平化和向大城市极化的特征;(3)就福利效应而言,住房成本上涨压缩了工资溢价带来的福利水平提升空间,但一定程度上缓解了高、低技能劳动力福利差距的扩大趋势;更高水平的便利设施促进了福利水平的提升,但也加剧了高、低技能劳动力之间的福利不平等状况。城市规模对上述福利效应存在放大机制。     

Unemployment Risk, the Housing Market and the Effects of Decentralised Redistribution

The paper examines the general equilibrium effects of benefits to the unemployed and the taxes to pay for them in a two country model in which people move to maximise expected utility. Wages are set by unions, and unemployment emerges as an equilibrium phenomenon. Wage setting institutions are found to be important for assessing the welfare effects of redistribution from the employed to the unemployed. The analysis finds that, with monopoly unions, more redistribution tends to repel population from the country increasing redistribution and to reduce welfare in both countries, but the opposite is the case in a model in which wage setting does not depend on unemployment benefits and taxes. These effects are dampened by the combination of risk averse consumers and inelastic housing supply.     

Taxes, Financing Decisions, and Firm Value

We use cross-sectional regressions to study how a firm's value is related to dividends and debt. With a good control for profitability, the regressions can measure how the taxation of dividends and debt affects firm value. Simple tax hypotheses say that value is negatively related to dividends and positively related to debt. We find the opposite. We infer that dividends and debt convey information about profitability (expected net cash flows) missed by a wide range of control variables. This information about profitability obscures any tax effects of financing decisions.     

Housing, Health, and Annuities

Annuities, long-term care insurance (LTCI), and reverse mortgages appear to offer important consumption smoothing benefits to the elderly, yet private markets for these products are small. A prominent idea is to combine LTCI and annuities to alleviate both supply (selection) and demand (liquidity) problems in these markets. This article shows that if consumers typically liquidate home equity only in the event of illness or very old age, then LTCI and annuities become less attractive and may become substitutes rather than complements. The reason is that the marginal utility of wealth drops when an otherwise illiquid home is sold, an event correlated with the payouts of both annuities and LTCI. Simulations confirm that demand for LTCI and annuities is highly sensitive to the liquidity and magnitude of home equity.     

Housing,Illiquidity, and Wealth

This article develops a model of asset allocation relevant for the representative consumer. Consumption is composed of two items: housing, and other goods and services. The representative household's balance sheet consists largely of a house and a mortgage. Its income statement is dominated by labor earnings, constraining cash expenditures. Housing-market behavior thus underlies intertemporal wealth and consumption allocation. With a housing-dominated portfolio and a maximizing plan, a plausible bound on the intertemporal marginal rate of substitution in consumption can be estimated for a typical household. The model takes account of idiosyncratic characteristics of housing returns and finance. Underwriting standards oblige borrowers to secure mortgage debt with a housing asset and with cash flow, usually from labor income. Access to the mortgage market depends on the loan-to-value ratio, or leverage and debt size, and the debt-coverage ratio, or cash solvency. If there are seasonals or predictable patterns in house returns, their magnitude is amplified for the typical liquidity-constrained household. Empirical results for the aggregate U.S. market confirm predictability and serial correlation in house capital gains. There are seasonals in housing returns. While there is no January effect, above-average returns are obtained during the summer months.     

住房价格、房屋购买与中国家庭杠杆率

本文基于中国家庭追踪调查的微观数据以及相匹配的城市层面的住房价格数据,从住房购买需求的角度,给出了一个近年来家庭杠杆率急剧上升的解释。利用中国家庭追踪调查的微观数据探讨了房价上涨对家庭杠杆率的作用机制以及潜在影响。结果表明,住房价格的快速上涨推动了家庭杠杆率的急剧攀升,从数量上看,房价每上涨1倍,样本期间的家庭贷款数额将会增长288.1%,家庭杠杆率将上升39.2%,而此部分贷款的增加主要来源于银行贷款而非私人借贷,由房价导致的家庭借贷数额和杠杆率的上升大概占到购房家庭总体借贷数额和杠杆率上升的90%左右。机制分析表明,住房价格的快速上涨刺激了家庭必需型和投资型住房需求,并提高了家庭的借贷意愿和风险偏好。分样本的探讨发现,这一效应对于非农户口家户以及有配偶和子女家户的影响更为明显。     

Current Wealth,Housing Purchase,and Private Housing Loan Demand in Japan

Japanese households accumulate wealth for down payments at a high rate. Therefore, current wealth plays an important role in home acquisition as well as public loans whose direct mortgage lending is a strong support for home purchasers. We estimate the wealth effect on private mortgage debt as well as housing consumption by applying a model where mortgage-debt demand is derived from house-purchase decisions and is determined jointly with housing consumption. We use a simultaneous equation Tobit estimation method. Wealth effects on private mortgage debt, likelihood of borrowing, and housing consumption are not elastic. On the other hand, a change in housing consumption affects the likelihood of borrowing elastically much more than the private mortgage amount of borrowers. Housing and private mortgage markets fluctuate very closely with the number of participants in the mortgage market. Therefore, the number of housing starts is linked strongly to the private mortgage market.     

上市公司成立并购基金的影响因素及财富效应研究

本文基于2011-2016年中国上市公司联手私募投资机构成立并购基金的数据,研究上市公司成立并购基金的影响因素、市场反应及后续投资。我们发现:公司特征显著影响成立并购基金的可能性;资本市场对设立并购基金的平均反应短期显著为正,但长期显著为负;投资者对并购基金的后续投资持正面态度,但大部分并购基金并没有后续投资。我们从并购基金的结构和运营机制以及发起人(上市公司和私募)动机等角度对这些发现提供了可能的解释。     

The Effects of Guidance Frequency and Guidance Goal on Managerial Decisions

We conduct an experiment to examine the effects of guidance frequency (frequent vs. infrequent) and guidance goal (accuracy vs. meet/beat vs. truthful) on managers’ operating decisions. We find that frequent guiders sacrifice total earnings for quarterly earnings predictability irrespective of their guidance goals. Furthermore, when guidance is infrequent, guiders with accuracy goals opt for quarterly earnings predictability over total earnings more often than do guiders with either meet/beat goals or truthful goals. These findings have implications for regulators and investors in terms of the unintended consequences of requesting frequent earnings guidance. Further, while managers may perceive that accuracy goals can help their firms establish forecasting and reporting reputations, we show that accuracy goals may result in dysfunctional internal managerial decisions, particularly when guidance is issued infrequently.     

Housing,consumption and asset pricing

This paper considers a consumption-based asset pricing model where housing is explicitly modeled both as an asset and as a consumption good. Nonseparable preferences describe households’ concern with composition risk, that is, fluctuations in the relative share of housing in their consumption basket. Since the housing share moves slowly, a concern with composition risk induces low frequency movements in stock prices that are not driven by news about cash flow. Moreover, the model predicts that the housing share can be used to forecast excess returns on stocks. We document that this indeed true in the data. The presence of composition risk also implies that the riskless rate is low which further helps the model improve on the standard CCAPM.     

Tax Rate Uncertainty, Investment Decisions, and Tax Neutrality

This article deals with the effects of tax rate uncertainty (TRU) on individual investment behavior. We show that under risk neutrality as well as under risk aversion, increased TRU has an ambiguous impact on investment, depending on the investment project's structure of cash flows and depreciation deductions. Although the investment effects are small the popular view that tax policy uncertainty depresses real investment is rejected. Further, tax neutrality in the light of tax policy uncertainty is defined more precisely. Neutrality results for the Johansson-Samuelson tax and the cash flow tax that are known from certainty are confirmed under TRU.     

Irreversibility,Uncertainty and Housing Investment

Housing represents a form of “irreversible” investment. Theoretically, increased uncertainty should lower housing investment. Empirically, finding a proxy for uncertainty has proven problematic. Some recent papers have investigated the effect of uncertainty on real estate investment, with varying proxies for uncertainty and mixed results. This paper employs a technique used in modern macroeconomic studies, the Generalized Autoregressive Conditional Heteroskedasticity-in-Mean model, which has been shown to correspond as closely as any known measure to theoretical concepts of uncertainty. Results indicate that uncertainty indeed has a negative impact on housing starts.     

Managers: Their Effects on Accruals and Firm Policies

This paper investigates whether top executives have significant individual‐specific effects on accruals that cannot be explained by firm characteristics. Exploiting individual executive and firm data from a period of 37 years, we find that individual executives play a significant role in determining firms’ accruals. We examine whether executives’ effects on accruals are related to their personal styles on firm policies, investment, financing and operating decisions. Our results show that individual executives’ effects on accruals are more correlated with their operating decisions than investment and financing decisions. We next investigate whether managers themselves also have a personal style for directly affecting accruals. We compare effects exerted by CEOs to CFOs. We find CEOs are more likely to affect accruals through firm policy decisions and CFOs are more likely to affect accruals through accounting decisions. CFOs tend to report more ‘solid’ earnings than CEOs, i.e., CFOs are more likely to push accruals to zero.     

Ethnicity, Endogeneity, and Housing Tenure Choice

Home ownership rates for New Zealanders of European descent aged twenty five to fifty four are 16 percentage points higher than for Maori in the same age group. This article explores the relative attainment of home ownership of the two ethnic groups by estimating a series of tenure choice models and decomposing the difference in rates into endowment and residual effects. Particular attention is given to the endogeneity of current income and wealth relative to the tenure choice decision and to the methods for decomposing group mean differences. The article also applies more appropriate methods for estimating incomes and wealth than have been used in most previous studies of tenure choice. The study concludes that only a small proportion of differences in home ownership rates is explained by household endowments. It is shown that controlling for the endogeneity of income and wealth has a substantial impact on the tenure choice and decomposition results.