Estimating the Excess Returns to Housing at a Disaggregated Level: An Application to Sydney 2003–2011

The returns to housing are particularly important because this asset class makes up such a large fraction of household wealth. Yet they are not straightforward to calculate given both the heterogeneity in homes and the fact they sell only infrequently. We outline a methodology for constructing the excess returns to housing at a disaggregated level, essentially that of the individual home. Our approach explicitly takes account of the inherent risk in homeownership with regard to the capital gain or loss component of housing returns. This approach is applied to a rich data set for Sydney, Australia, from 2003Q1 to 2011Q2. Our findings indicate that the returns to housing are on average quite weak though they exhibit significant diversity across dwelling types and regions. Excess returns are also strongly influenced by assumptions regarding the level of risk aversion.     

Subtle is the Lord,but malicious He is not: the calculation of abnormal stock returns in applied research

We use the expected logarithmic returns formula for the Geometric Brownian Motion (GBM) in conjunction with the expected logarithmic returns formula for the Feller diffusion to illustrate the nature and magnitude of errors which arise in computed abnormal returns when one applies an expected logarithmic returns formula which is incompatible with the stochastic process that generates a stock’s returns. Empirical analysis based on FTSE 100 stock price data for the five year period ending in 2017 shows that the scale of the errors in computed abnormal returns will hinge on the volatility of the returns generating process but will be particularly pronounced for relatively low stock prices. Although our principal focus is with comparing abnormal returns on the GBM and Feller diffusion, we also simulate logarithmic returns for the Uhlenbeck and Ornstein (1930) process, several interpretations of the Constant Elasticity of Variance (CEV) process and the scaled ‘t’ process of Praetz (1972) and Blattberg and Gonedes (1974). Taken in conjunction with the GBM and the Feller diffusion, these processes underpin virtually every equilibrium based asset pricing model which appears in the literature. However, computing abnormal returns for any of these processes using the expected logarithmic returns formula for the GBM inevitably leads to errors in the abnormal returns. Hence, an important principle which emerges from our analysis is that it is crucially important for researchers and others to test the compatibility of empirically observed returns with the distributional assumptions on which the empirical analysis is based if the complications arising from mis-specified modelling procedures are to be avoided.     

Causes and consequences of underutilised capacity in a tourist resort development

There is a widespread presumption that the development of tourism resorts brings direct and indirect benefits to the area where they are located. There has been extensive critical discussion about the magnitude and distribution of these benefits. This paper adds to knowledge of these benefits by investigating the causes of under-utilisation of tourist resort capacity, typified by the problem of “empty beds”. Many owners of holiday homes in tourist resorts choose not to rent out their property when they are not making personal use of it, thereby reducing income earning potential of businesses in the area. This paper reports on a qualitative and quantitative study of holiday home owners at a ski resort in France. While personal use of properties was low, 40% of owners had never rented out their property. Analysis of the data converged on four emergent themes to explain this apparent reluctance to rent out: fears about the social habits of renters; issues of freedom and flexibility in use of their property; life course changes which forced renting/non-renting decisions; and financial issues. Financial issues were not a driver of investment/rental decisions, but derived from other social and lifestyle factors. The paper makes suggestions about how resort management can help to reduce owners' reluctance to rent, and thereby alleviate problems associated with empty beds.     

Negotiating business and family demands within a patriarchal society – the case of women entrepreneurs in the Nepalese context

ABSTRACT

The aim of this paper is to advance our understanding of how women negotiate their business and family demands in a developing country context. The highest cited motivation for women’s pursuit of entrepreneurship has been their need to attend to these demands. Yet, empirically we know little about the negotiating actions taken by, and the business satisfaction of women in the context of both livelihood challenges and patriarchal contexts, despite several scholarly calls for contextualized accounts of women’s entrepreneurship. We explore these issues by employing a qualitative study of 90 women engaged in primarily informal entrepreneurial activities in three Nepalese regions. Our findings highlight three main and interrelated themes – negotiating consent, family resource access and gaining status. These themes allow us to contextualize the process of negotiating business and family demands by highlighting how women legitimize their business activities, respond to family/societal expectations and mobilize support for, and find satisfaction in their business. Overall, our study contributes towards accounts of business–family interface that incorporate the everyday practices of entrepreneurial activities amongst those less privileged in terms of resource access in particular sociocultural contexts.     

Impact of Casino Gambling and Lotteries on Demand for Other ‘Sin’ Goods

Atlantic Economic Journal - Public policy aimed at reducing consumption of tobacco or alcohol products often results in purchases of lower-taxed alternatives. Many studies find tobacco and alcohol...     

Is it ‘you’ or ‘your workplace’? Predictors of job‐related training in the Anglo‐American world

This paper examines the determinants of job‐related training and workplace voice. Using data from a unique 2016 cross‐national survey of Australian, British, Canadian and American employees, the paper contrasts two classic formulations in the literature; (1) the neoclassical/human capital approach which predicts that individual characteristics (such as age and education) which increase the efficiency of learning, will have the largest impact on the allocation of training (i.e. younger and more educated employees will be afforded training) and (2) the traditional institutional approach which favors the structural characteristics present at the industry and firm level, the nature of the job itself and the strategic choices of firms as the major predictors of job‐related training. We find that age – a key factor in the human capital model – plays a significant role in the allocation of training but that education (in keeping with recent evidence) does not. In sum the human capital model provides, at best, only a partial explanation for the differences in training observed across individuals. In contrast, variables invoked by the institutional literature (i.e. occupation level; industry; ownership type; and market structure) are highly significant and account for a much greater proportion of the variance in training observed across workers. Other institutional factors such as the presence of a union and a human resource department were strong positive predictors of job‐related training. But most important were product‐market strategy and employee voice. Respondents working in firms utilizing a ‘high road/high quality’ product/service strategy and with a workplace consultative committee were significantly more likely to receive training than similar workers employed in observably similar firms. This last finding supports the industrial relations view of voice as an important channel by which training is optimally delivered inside the firm.     

Surprise and dispersion: informational impact of USDA announcements

We examine the role of information asymmetry on changes in bid‐ask spreads during major United States Department of Agriculture (USDA) announcements. Our analyses, using corn, wheat, and soybean futures, indicate that information asymmetry is significantly higher on USDA announcement days compared to nonannouncement days. We further observe that the increased information asymmetry prior to news announcements is mainly driven by the divergence in private information possessed by market participants. However, once the USDA news is released, not only the dispersion in investors’ private information but also the surprises in news announcements contribute to increased information asymmetry and widening of bid‐ask spreads.     

Can firm-specific dividend drop-off ratios be used to infer shareholder marginal tax rates?

In a seminal study, Elton and Gruber (1970) argue that ex-dividend day pricing can be used to infer marginal tax rates of shareholders. We examine ex-dividend day pricing for individual firms and ask whether their CFOs could use the history of a firm's ex-dividend price-drop ratios to infer reasonable estimates of shareholders’ marginal tax rates. We use TAQ data for 1,124 US firms that have at least 30 ex-dividend days during the period August 1993 to October 2012. Our results show that ex-dividend day pricing is so noisy as to prohibit sensible estimates of shareholders’ marginal tax rates.     

“We’re not scum,we’re human”: Agential responses in the face of meaningless work

In this article, we address a gap in the meaningful work literature by exploring the processes by which work is experienced as meaningless. We adopt the lens of relational sociology and, through interviews with 45 participants in four very different occupations, we found that meaninglessness arises through four relational processes: powerlessness, disconnection, devaluation and self-doubt. Individuals enacted six agential responses to this experience. Two of these, resisting and responsibility-taking, were “reinstatement” strategies and four, acceptance, distancing, minimising and resistance, were “coping” strategies. In addition, some informants used “switching” as a framing device. These responses were not equally available to all workers in all occupations, suggestive of a stratified experience of work meaninglessness. Our study contributes to understandings of how work is rendered meaningless and how individuals might respond.