On the Unequal Inequality of Poor Communities

Communities differ in important ways in their needs, capacities,and circumstances. Because central governments are not ableto discern these differences fully, they seek to achieve theirpolicy objectives by relying on decentralized mechanisms thatuse local information. Household and individual characteristicswithin communities can also vary substantially. A growing bodyof theoretical literature suggests that inequality within communitiescan influence policy outcomes in ways that are either harmfulor helpful, depending on the circumstances. Until recently,empirical investigations into the impact of inequality havebeen held back by a lack of systematic evidence on community-levelinequality. This study uses household survey and populationcensus data to estimate per capita consumption inequality withincommunities in three developing economies. It finds that communitiesvary markedly in their degree of inequality. It also shows thatthere should be no presumption that inequality is less severein poor communities. The kind of community-level inequalityestimates generated here can be used in designing and evaluatingdecentralized antipoverty programs.     

The other January effect: International, style, and subperiod evidence

We report international, style, and subperiod evidence for the other January effect (OJE) documented in Cooper et al. [2006. The other January effect. Journal of Financial Economics 82, 315–341]. When examining the OJE in 22 countries starting as early as 1801, we find that the spread between 11-month returns following positive and negative Januarys does tend to be positive. However, the spreads are rarely statistically significant and the returns of other calendar months exhibit similar subsequent 11-month return spreads. Further, the international OJE spreads and the OJE spreads in disaggregate U.S.-style portfolios are more related to the U.S. market-level January return, rather than the respective country-specific or portfolio-specific January return. Finally, the OJE is weaker over the 1975–2006 post-discovery period than over the 1940–1974 pre-discovery period. Our evidence indicates that the OJE is primarily a U.S. market-level-based phenomenon that has diminished over time, which suggests a ‘temporary anomaly’ interpretation.     

The Economic Value of Volatility Timing

Numerous studies report that standard volatility models have low explanatory power, leading some researchers to question whether these models have economic value. We examine this question by using conditional mean-variance analysis to assess the value of volatility timing to short-horizon investors. We find that the volatility timing strategies outperform the unconditionally efficient static portfolios that have the same target expected return and volatility. This finding is robust to estimation risk and transaction costs.     

The integration substitute: the role of controls in managing human asset specificity

As the integration solution to the problem of specific assets cannot be replicated on human asset specificity because slavery is illegal, economic theory states that control systems substitute for integration through a balanced structure to help align diverse interests. To understand the intricate design features of the balance, we examine a case‐study firm. For low human asset specificity, the restriction and segregation of usable decision rights link with standards. However, incentives are traced to individuals only to the extent task deviations do not create relevant future costs that are difficult to be self‐corrected. For high specificity, incentives are related to outputs rather than outcomes, because outcome variations reduce the attractiveness of maintaining the balance. Subjective assessment is used as an efficient alternate ‘balancing’ solution and decision control is shared when available subjective data are inadequate.     

Cost Accounting and Performance Measurement in a Just-in-Time Production Environment

There are normative statements in the literature, backed up by case observations and anecdotal evidence, which indicate that manufacturing companies operating just-in-time (JIT) production management systems should also change their cost accounting systems and place greater reliance on non-financial performance indicators. This study provides empirical evidence suggesting that JIT manufacturing companies which have made some degree of modification to their costing system demonstrate higher performance than JIT companies which have not made changes. The results also suggest that greater use of non-financial performance indicators is associated with higher performance irrespective of the production management system adopted.