The Effect of Lender Identity on a Borrowing Firm's Equity Return

Previous research demonstrates that a firm's common stock price tends to fall when it issues new public securities. By contrast, commercial bank loans elicit significantly positive borrower returns. This article investigates whether the lender's identity influences the market's reaction to a loan announcement. Although we find no significant difference between the market's response to bank and nonbank loans, we do find that lenders with a higher credit rating are associated with larger abnormal borrower returns. This evidence complements earlier findings that an auditor's or investment banker's perceived “quality” signals valuable information about firm value to uninformed market investors.     

Distributional Impact of Government Outlays on the Australian Pharmaceutical Benefits Scheme in 2001–02

In recent years outlays on the Australian Pharmaceutical Benefits Scheme have increased rapidly, prompting both attempts by government to reduce growth in outlays and renewed interest in the characteristics of the beneficiaries of the Scheme. This article uses a microsimulation model to analyse the distributional impact of Australian Government outlays on the Pharmaceutical Benefits Scheme, by such characteristics as family income, family type, age, sex and lifecycle group. We find that there are pronounced distributional effects by such characteristics as income, age and sex, with both older and poorer Australians receiving far greater PBS benefits than younger and more affluent Australians.     

Gentlemen and shopkeepers: supplying the country house in eighteenth‐century England

The country house is well recognized as a site of elite patronage, an important vehicle of social and political ambition, and a statement of power and taste. Yet we know relatively little about the networks of supply and purchasing patterns of rural elites, or about how their practices related to broader changes in material culture. Drawing on a large sample of bills and receipts of the Leigh family of Stoneleigh in Warwickshire, this article recreates the processes through which the material culture of the family home was constructed. These reveal London as the source for many high‐quality goods, although the pattern of supply was not a simple dichotomy of local–everyday and metropolitan–luxury purchases. They also show the large number of shopkeepers patronized as the Leighs spread their purchases through choice, convenience, and expediency. Relating this to wider conceptions of consumption, the Leighs emerge as engaging in layered and sometimes conflicting consumer cultures. They were concerned with fashion as novelty and a marker of rank; but they also valued traditional markers of status. Social distinction was achieved through a continued emphasis on title and lineage as much as fashion or taste—value systems that were unavailable to the middling sorts.     

CONSUMER BANKRUPTCY AND CHAPTER CHOICE: STATE PANEL EVIDENCE

Between 1985 and 1996, the number of personal bankruptcy cases filed annually in the United States rose from 341,000 to 1.1 million, and the rate of bankruptcies per 100,000 adults increased from 203 to 596. By state, bankruptcy rates vary from a low of 147 in Hawaii to a high of 956 in Tennessee. A controversial aspect of bankruptcy policy is the discharge of debts permitted under Chapter 7, in contrast to Chapter 13, where the debtor agrees to repay all or a portion of unsecured debt over a 3-5-year period. This paper examines empirically the determinants of the frequency with which individuals choose Chapter 13 relative to Chapter 7 (chapter choice). The panel data set is a cross section of states and the District of Columbia for the 8-year period from fiscal year 1989 to 1996. The empirical model and policy application focus on the importance of several laws for bankruptcy decisions, and legal variables are included for each state's Chapter 7 homestead exemption, personal property exemptions, and garnishment laws. This study shows that both homestead exemption laws and garnishment laws are statistically significant for bankruptcy choices. Although the marginal effect of the homestead exemption is small, there is a large range under current laws, suggesting that changes in this exemption are important for bankruptcy policy. ( JEL K1, K4, D2, D9)