Life on the Red Carpet: Star Players and Referee Bias in the National Basketball Association

Fans of the National Basketball Association (NBA) have long considered the idea that NBA referees are biased in various ways, such as when certain “star players” benefit from so-called “phantom fouls” committed against them or are sheltered from calls against fouls they commit. Using two data sets, the first based on Wallace, Caudill, and Mixon (2013 Wallace, Scott, Caudill, Steven B., and Mixon, Franklin G., Jr. 2013. Homo Certus in Professional Basketball: Empirical Evidence from the 2011 NBA Playoffs. Applied Economics Letters 20 (7): 642–648.[Taylor &; Francis Online], [Web of Science ®] , [Google Scholar]), and a second based on all player games during the 2011 NBA Playoffs series, including dozens of NBA All Stars, the present study empirically investigates this potential form of referee bias by examining both early- and late-game free throw shooting in these most critical games of any season for NBA players, coaches, owners, and fans. The empirical results suggest that marquee NBA players are the beneficiaries of referee bias that occurs near the end of NBA Playoffs contests. More specifically, through regression models with various fixed effects, we find that NBA All Stars are awarded with an additional 0.32 free attempts per minute during the fourth quarter of NBA Playoff games.     

Examining the performance effects of post spin‐off links to parent firms: should the apron strings be cut?

Little research has examined the performance implications of the parent‐child relationship post spin‐off. Although the parent provided oversight of the child prior to the spin‐off, effects of post spin‐off links to the child remain unclear. Applying transaction cost and agency theories, our study of 142 firms spun‐off between 1986 and 1997 examines how oversight and ownership by the parent firm influence stock market performance post spin‐off. We find that while child firms benefit from some links to the parent, having too many links is negatively related to performance. The findings suggest that there is a balance between having too much parental involvement and not enough. Our study extends understanding of post spin‐off child firm performance and provides valuable insights for both parent and child firms. Copyright © 2011 John Wiley & Sons, Ltd.     

A Test of the Reliability of Current Cost Disclosures

Using data from corporate acquisitions recorded under the purchase method, this research tests the reliability (representational faithfulness) of current cost disclosures. The fair value of property, plant, and equipment recorded by the acquiring company following the acquisition is found to be significantly related to the current cost disclosures made by the acquired company prior to the acquisition. When the data are segmented according to reporting regime, the significant relationship pertains to the SFAS 33 disclosures but not to ASR 190 disclosures of current cost. The study also finds that the results pertain primarily to current cost disclosures made shortly before the acquisition date. Overall, the results support current initiatives for increased departure from historical-cost approaches to accounting, especially if these measures are made along the lines of SFAS 33 techniques rather than ASR 190 techniques.     

WATER QUALITY TRADING IN THE PRESENCE OF ABATEMENT‐COST SHARING

This paper examines how water quality trading interacts with nonpoint‐source abatement‐cost sharing (e.g., as currently practiced by the National Resource Conservation Service through its Environmental Quality Incentives Program [EQIP]) to promote the participation of nonpoint sources in a water quality market, participation that has thus far been noticeably lacking nationwide. As such, an idealized version of water quality trading is envisioned, where water quality trading and nonpoint cost sharing are treated as complementary policy instruments rather than substitutes. Toward this end, the subgame‐perfect equilibrium concept is used to model a “multilateral contracting” relationship between the regulatory authority and nonpoint sources when the regulator has incomplete information about the nonpoint sources' production costs. We characterize ex ante (or second‐best) nonpoint abatement levels when the regulator chooses cost‐share rates in concert with a water quality market. Numerical analysis indicates that current EQIP cost‐share rates would likely be lower and more flexibly determined in the presence of water quality trading. (JEL Q53)     

A General Test for Compliance with Equal Credit Opportunity Standards

The basic objective of this study was to justify, develop, describe, apply and evaluate a statistical test for assessing the lending patterns of financial institutions for evidence of discrimination. Reduced to its essentials, the proposed test consists of a comparison of the discriminating ability of two alternative multivariate discriminant functions. One of these discriminant functions contains only generally accepted risk and return factors as discriminant variables, while the other is composed of the same risk and return factors plus a set of variables representing protected classes of loan applicants. An empirical application of the methodology in a mortgage lending setting led to the conclusion that protected classes of applicants such as minorities, women, and the elderly were afforded the same access to credit as their unprotected counterparts in the same risk categories.