THE IMPORTANCE OF LIQUIDITY AS A FACTOR IN ASSET PRICING

We employ the Fama‐French time‐series regression approach to examine liquidity as a risk factor affecting stock returns. Prior studies establish liquidity as an important consideration in investment decisions. Here, liquidity is found to be an important factor affecting portfolio returns, even after the effects of market, size, book‐to‐market equity, and momentum are considered. Nonzero intercepts remain, however, indicating continued missing risk factors.     

Mortgage Markets and Inter-Regional Differences in Conventional Mortgage Terms

One of the purposes of the secondary mortgage market is to move funds from areas of capital surplus to areas of capital shortage. If mortgage funds move freely throughout the economy then the price of mortgage funds (the terms of the mortgage) should be the same everywhere. Thus, if the secondary mortgage market is efficient, mortgage terms should show less geographic variation after the secondary market began in 1970 than they showed before. In this paper, the efficiency of the market is tested in two stages. In the first, the average terms of mortgage loans in 1968 and 1978 are examined to determine whether they became more homogeneous after the secondary market was begun. In the second stage, the terms are modeled as a function of region, year by region interaction variables, foreclosure rates, the usury ceiling and the average cost of funds. This model is estimated and analyzed using a multivariate multiple regression technique.     

Putting their money where their mouths are: Consumer willingness to pay for multi-ingredient,processed organic food products

In response to dramatically increasing adoption in consumer markets, the National Organic Program (NOP) initiated novel labeling standards for food products in the US in 2002. This program is a particularly relevant standardization effort for multi-ingredient processed foods. Rather than a simple binary message (organic or not), gradations of organic content are now codified. No existing published study evaluates consumer willingness to pay or motivation to purchase in response to such a rich organic label. This article presents evidence of the impact of the NOP through analysis of data collected in seven central Ohio, USA grocery stores. Results suggest that consumers are willing to pay premium prices for organic foods, even those with less than 100% organic ingredients. The magnitudes of WTP premia varied significantly among consumer groups, suggesting that targeted marketing may be effective for organic merchandisers.     

An alternate method of estimating the Cagan money demand function in hyperinflation under rational expectations

An alternate method of estimating the Cagan money demand function under rational expectations is presented. The technique utilizes the side assumptions that (1) accurate contemporaneous information on the price level and money stock is available to individuals and (2) unobservable noise in the portfolio balance schedule is neglible. The procedure has three main virtues. First, it is implemented without imposing restrictions on the money supply process. Second, the procedure is extremely simple and economical. Third, it admits a simple test of a restriction implied by the Cagan money demand function. Results are related to issues in recent hyperinflation studies.     

Production frontier methodologies and efficiency as a performance measure in strategic management research

The measurement of corporate performance is central to strategic management research. A common objective of this research is to identify top performers in an industry and their sources of competitive advantage. Despite this focus on best firms and practices, most researchers utilize statistical methods that identify average effects in a sample, and they assess a single performance dimension while ignoring other relevant dimensions. Emphasis on purely financial measures can overlook the fact that a firm's efficiency in transforming resources has been shown as a major source of competitive advantage. In this article we demonstrate how frontier methodologies, such as Data Envelopment Analysis and the Stochastic Frontier approach, can address these challenges. We provide an illustration based on longitudinal data from U.S. and Japanese automobile producers. Copyright © 2013 John Wiley & Sons, Ltd.     

The impact of housing rehabilitation on local neighborhoods: the case of small community development organizations

Across the nation, nonprofit organizations located in poor and declining neighborhoods are promoting homeownership in the hopes that their efforts will stave off decline and contribute to neighborhood stability. A common homeownership strategy among nonprofits is to acquire boarded-up or deteriorated homes at a low price, rehabilitate them, and then sell them at an affordable price. As these programs continue, nonprofit organizations want to show quantitatively that neighborhood revitalization works—that the funds devoted to an area stabilize neighborhoods or, even more, that they initiate a surge of continued upward progress. But, unlike their larger counterparts, smaller community development organizations are usually at a disadvantage in undertaking such an evaluation. This study will help illustrate what might be done. It focuses on the case of St. Joseph's Carpenter Society (SJCS) in Camden, New Jersey and assesses the quantitative impact that SJCS has on its target neighborhoods. A three-tiered approach is adopted that ranges from a target and comparison area analysis, to regression analysis of SJCS's impact on local housing prices, and finally to an examination of the relative market performance of SJCS's houses. All told, the analysis suggests that SJCS's rehabilitation and homeownership education activities appear to have a positive influence on the neighborhoods in its target area.     

AN INTEGRATED ECONOMETRIC MODEL OF THE CANADIAN LIVESTOCK-FEED SECTOR*

Canadian econometric studies dealing with the livestock-feed sector have tended to concentrate on individual commodities, or on a particular component of the market equilibrium process. In this article an integrated model of the sector is presented which depicts the nature of commodity interactions both at the consumer level and the producer level. The feed sector was conceptualized primarily in terms of derived demand. The model contained a total of 82 equations, of which 64 were related to the livestock subsystem. The estimated model was subsequently used for predicting the impact of changes in selected instrumental variables on the livestock-feed sector.
Les dernières etudes économétriques canadiennes traitant du pâturage se sont concentrées sur les produits séparés on sur un composé particulier répondant au besoin commercial. Cet article présents un modèle intégré du secteur montrant la nature des actions réciproques entrc les produits au niveau du consommateur et du producteur. Le secteur pâturage est expliqué en fonction de la demande. Le modèle contenait 82 équations, 64 desquelles se rapportaient àľélevage; par conséquent le modèle est employé pour prédire ľinfluence dans les pâturages de changements opérés sur les composants choisis.     

Segmented Work and Divided Workers: A Review Article

The Coase theorem is often interpreted as demonstrating why private negotiations between polluters and victims can yield efficient levels of pollution without government interference. It is considered by many to provide the theoretical underpinnings for "free-market" solutions to environmental problems. This article explains why misinterpreting Coasian negotiations as a market driven process leads to erroneous conclusions. More importantly, this article demonstrates why negotiations between polluters and victims would fail to yield efficient outcomes even if property rights were well-defined, even if there were only a single victim, even if negotiations entailed no transaction costs, and even if negotiators behaved rationally and reached a successful agreement. Unlike other critiques of the Coase theorem that focus on irrational behavior and transaction costs, our critique identifies perverse incentives that arise even under conditions most favorable to the theorem. By accepting, rather than challenging, the premises of the theorem, our analysis provides an "internal" critique that strengthens well-known "external" criticisms.