Wilderness Canoeing in Ontario: Using Cumulative Results to Update Dichotomous Choice Contingent Valuation Offer Amounts

This study used cumulative results to update the distributions from which offer amounts were drawn in a dichotomous choice contingent valuation of user benefits from wilderness canoeing in Ontario's wilderness parks. An empirical model demonstrates the efficiency gains from using this procedure. Results allow comparison of variation in average daily willingness to pay (WTP) by trip length, indicating decreasing average benefits per trip-day. Two payment vehicles were used. Canoeists indicated ranges of WTPs which conformed to expected hypotheses when the payment vehicle was an increase in general trip costs. However, the same respondents indicated an upper bound on WTP when the payment vehicle was an increase in the provincial park backcountry permit price.     

The effect of latency variables on repeated measures inference applied to the measurement of risk-taking as a function of psychopathy

In numerous psychology studies, subjects are asked to perform some task a number of times, T. The effect of the choice of T on the associated inference, however, is usually not assessed. We investigate the appropriate choice of T empirically by using data collected in a study on the relationship between psychopathy and risk-taking in 90 inner city drug users enrolled in a residential treatment program. We show that, when studying this relationship, the latency variable usually discarded from the analysis behaves exponentially allowing a natural division of the study period 1, . . . , T into two distinct subperiods. These subperiods yield significantly different results—in the early period only (which we call “reactive”), subjects with high psychopathy scores exhibit lower sensitivity to reward and punishment in our risk taking experiment. The later period (which we call “stable”) shows no relationship between sensitivity to reward and punishment and psychopathic tendencies.     

Species Invasion as Catastrophe: The Case of the Brown Tree Snake

This paper develops a two-stage model for the optimal management of a potential invasive species. The arrival of an invasive species is modeled as an irreversible event with an uncertain arrival time. The model is solved in two stages, beginning with the post-invasion stage. Once the arrival occurs, the optimal path of species removal is that which minimizes the present value of damage and removal costs plus the expected present value of prevention costs. An expenditure-dependent, conditional hazard rate describing species arrival is developed based on discussions with natural resource managers. We solve for the optimal sequence of prevention expenditures, given the minimum invasion penalty as just described. For the case of the Brown Tree Snake potentially invading Hawaii, we find that pre-invasion expenditures on prevention are inverse U-shaped in the hazard rate. Efficient prevention should be approximately $2.9?million today and held constant until invasion. Once invasion occurs, optimal prevention requires $3.1?million annually and $1.6?million per year on species removal to keep the population at its steady state level, due to high search costs at very small population levels.     

Delivering Public Health Care Services: Substitutes,Complements, or Both?

In this article we investigate how the availability of public health care providers increases (complement) or decreases (substitute) the likelihood of having public or private health insurance. The probability of each of three insurance alternatives (uninsured, Medicaid, private insurance) is modeled as a function of the availability of public programs in the respondents'community along with individual characteristics including family income, health status, and family structure. Using population-based estimates, public hospitals are associated with a crowd-out rate of 3.5 percent to 8.6 percent. Federally qualified health centers were associated with a net complementary effect (additional public insurance take-up) of 7.1 percent. (JEL I11 , I18 , I38 )     

Acquisitions of family owned firms: boon or bust?

Using a hand-collected dataset, we examine the acquisitions of 307 family owned targets for the period 1984–2000 to study the conflicting roles of entrenchment and alignment of interests in these firms. We find that bidders experience the strongest announcement market reaction at the medium levels of family ownership. However, bidder returns are negatively impacted when acquiring a public target family firm, even controlling for the percent owned by the family. We also find that overall firms that acquire family owned targets experience significant large negative returns in the long run. However, the long run results are also sensitive to the ownership structure of the family firm target with medium levels resulting in insignificant returns in the long run.     

Do Institutional and Individual Investors Differ in Their Preference for Financial Skewness?

Employing a unique sample of individual and institutional investors, we conduct experiments to determine investors’ preference for (or indifference to) financial skewness. We present investors with a series of stocks with varying levels of skewness. Using Instant Response Devices, we then collect investors’ choices to hold or sell each stock. Among stocks with equal expected returns, we find strong evidence that the sample investors use a prospect theory utility function rather than a mean-variance expected utility function to decide to sell or hold stocks. In the loss domain, we find that investors are ambivalent about the choice between positively and negatively skewed stocks. However, in the gain domain, we find that both individual and institutional investors prefer negatively skewed stocks—a contrast from previous research suggesting that individuals (and not institutional investors) prefer positive skewness. We also find evidence suggesting that reference points are important in financial decision making.