What do Australian Annual Reports Say About Future Earnings?

Prospective earnings information in Australian firms' annual reports has been claimed to be of sufficient importance to warrant its statutory requirement, or at least its "active encouragement". With the introduction of AASB 1039 Concise Financial Reports, management discussion and analysis is required in some circumstances, although there is no explicit requirement to provide prospective earnings disclosures. A survey of a sample of ASX-listed firms shows that about 25% include some form of earnings forecast, although most are qualitative, while even a coarse measure of their accuracy suggests they are relatively unreliable. These results give rise to some concern that encouraging the provision of prospective earnings data may not necessarily assist investors.     

Mandatory Disclosure and Operational Risk: Evidence from Hedge Fund Registration

Mandatory disclosure is a regulatory tool intended to allow market participants to assess operational risk. We examine the value of disclosure through the controversial SEC requirement, since overturned, which required major hedge funds to register as investment advisors and file Form ADV disclosures. Leverage and ownership structures suggest that lenders and equity investors were already aware of operational risk. However, operational risk does not mediate flow‐performance relationships. Investors either lack this information or regard it as immaterial. These findings suggest that regulators should account for the endogenous production of information and the marginal benefit of disclosure to different investment clienteles.     

Consumer Attitudes Toward Health and Health Care: A Differential Perspective

Measures of attitudes of health care consumers toward their own health behaviors and health care institutions reveal the overall pattern of their views as well as their segmented views. Results suggest that some consumers may take a more scientific approach to health care and prevention than others and that demographics, health status, and health consciousness are partial predictors of that consumer approach. Policy makers for health care should formulate and target programs with different segments of the population in mind.     

The Price Impact and Survival of Irrational Traders

Milton Friedman argued that irrational traders will consistently lose money, will not survive, and, therefore, cannot influence long‐run asset prices. Since his work, survival and price impact have been assumed to be the same. In this paper, we demonstrate that survival and price impact are two independent concepts. The price impact of irrational traders does not rely on their long‐run survival, and they can have a significant impact on asset prices even when their wealth becomes negligible. We also show that irrational traders' portfolio policies can deviate from their limits long after the price process approaches its long‐run limit.     

The Development of Agrarian Capitalism in Post‐Soviet Russia

A core set of criteria have been met, so that it is accurate to speak of an agrarian capitalist system in Russia. The development of agrarian capitalism carries with it increased stratification, which is analysed along five dimensions: earned income, land expansion, use of credit, income from food sales and income from household enterprise. The paper demonstrates increasing differentiation between households, between professional cohorts and within professional cohorts. The data showing stratification within professions suggest that intra‐cohort stratification is driving most of the inter‐cohort stratification. The Russian model of agrarian capitalism and its processes of stratification have yielded a bifurcated countryside in which a thin stratum of ‘super winners’ has emerged. Economic processes have developed beyond simple stratification and have created the basis from which a rudimentary class structure appears to be forming.     

The Value of Imputation Tax Credits on Australian Hybrid Securities

Hybrid securities are becoming an increasingly important component of the capital structure of Australian firms. While displaying characteristics of both debt and equity, one principal equity attribute of hybrids is their ability to pay franked dividends. This enables resident domestic investors to claim corporate tax payments as a credit against personal tax obligations under Australia's dividend imputation tax system. This paper estimates a value for the ‘franking credits’ that attach to hybrid securities by examining stock price changes around ex‐dividend dates. We add to the literature that examines the ex‐day price changes of ordinary shares (OS) in that the hybrid securities we examine have high dividend yields and are relatively insensitive to market movements. Therefore the signal‐to‐noise ratio is much higher than for OS. Our analysis reveals that cum‐dividend day prices on hybrid securities do not include any value for franking credits. This result is consistent with the notion that the price‐setting investor in the Australian market is a foreign investor who places no value on franking credits.     

Consumer acceptance of irradiated food: A study of symbolic adoption

Previous research reveals mixed signals regarding the potential for consumer acceptance of irradiated food. Consumer acceptance seems to depend upon the nature and amount of information provided about irradiation. Survey research finds that only about 20–30% of respondents initially express favourable opinions of irradiation with some cautionary signals concerning consumer suspicion of the process and its benefits to the public. Some laboratory experiments and market tests, on the other hand, indicate a willingness of the consumer to accept a high quality, government-approved product, especially when irradiation is placed within the context of alternative pest and bacteria control treatments. However, these studies fail to provide the consumer with negative information about irradiation. This study examines the relative impact of social persuasion and both favourable and unfavourable information on consumer acceptance of food irradiation. The study takes the approach that consumer acceptance is a social process, wherein acceptance becomes subject to societal approval through word-of-mouth conversations. Previous literature suggests that social persuasion, particularly negative social persuasion, should outweigh favourable information on consumer acceptance of a new technology. This proposition is supported by the results of our study, which indicates that responses that were initially favourable to irradiation, especially those opinions formed in the absence of unfavourable information, should be interpreted with caution. The study supports previous research, therefore, suggesting that industry and governmental agencies would benefit from close inspection of societal attitudes towards the food irradiation process.