On Option-Pricing Models in Real Estate: A Critique

This paper considers the problems peculiar to options on real estate, because of the special set of institutional factors influencing real estate markets. It is intended to serve as a reply to Johnson and Wofford [15] as well as provide an overall critique of option-pricing models in a real estate context. Our major point is that a variety of real estate decisions, such as the abandonment decision, the option to refinance, or the option to exercise a contingent real estate purchase contract, may be modeled using option-pricing techniques. However, both the theoretical and institutional aspects of real estate markets must be taken into account in both developing and applying option models in a real estate context.     

Household Welfare and the Pricing of Cocoa and Coffee in Cote d'Ivoire: Lessons from the Living Standards Surveys

Cocoa and coffee are the most important crops in Côted'Ivoire. Until recently, the difference between world and administeredproducer prices provided an important source of government revenue.As a result of a continued decline of world prices of both crops,however, the Ivoirien government was forced to cut producerprices in half. Because 40 percent of Ivoirien households groweither cocoa or coffee, this cut can be expected to have a considerableimpact on the welfare level of these households. We use the1985 Living Standards Measurement Survey to estimate the welfareeffects of producer price changes for Ivoirien households, permittingan evaluation of the probable consequences of the recent pricecut. Using nonparametric econometric techniques, we find that,although many households will suffer losses of income, the cutswill not have adverse distributional effects: cocoa and coffeefarmers are scattered throughout the income distribution, butmost are concentrated in the middle.     

Bimodal issues,the median voter model,Legislator's ideology,and abortion

The median voter model is widely used in the public choice literature to explain legislator's behavior. According to the model, if voter preferences are unimodal, a vote-maximizing legislator should mirror the position of the median voter. However, the median voter model has not been tested on bimodal issues. This paper fills this critical void by empirically testing the applicability of the median voter model on an issue which clearly meets the criteria for being bimodal: abortion. Using a variety of attitudinal measures from large sample public opinion polls and constituency demographics, this study finds that Senate voting on the 1994 Freedom of Abortion Access bill was highly related to the senator's personal characteristics—especially ideology—and not to constituent opinion or demographics.     

ITC voting behavior on sunset reviews

This paper is the first attempt to analyze ITC Commissioner voting behavior on sunset reviews of antidumping cases. Sunset determinations entail greater complexity than initial antidumping investigations because ITC commissioners must account for the impact of dumping protection as well as competitive forces on industry conditions. Empirical findings indicate that ITC voting is based on both sunset regulation and nonstatutory factors. Results reveal apparent biases against Chinese competitors and poorer nations generally, and favorable treatment toward U.S. steel producers and high-wage industries. There is also evidence of preferential treatment of industries located in states of Senate oversight committee members. JEL no. F13     

Sustainability marketing at the farmers’ market: An ethnographic analysis of ambiguous communication

Farmers’ markets have grown rapidly in recent decades. One explanation for this growth relates to consumers’ view that farmers’ market products are more sustainable. While many have analyzed customer preferences at farmers’ markets, few have examined farmers’ message strategies in this space. Little has been done to analyze the ways farmers use sustainability as a marketing approach. This ethnographic research is based on 100 hr of observation and in‐depth interviews with 36 participants and analyzes the ways farmers position their products as sustainable to customers. The findings indicate that sustainability is not a primary topic of conversation during customerfarmer interaction. However, related concepts such as environment, local, organic, and chemical serve as the proxies for sustainability, even though these messages are presented ambiguously.     

Do Analysts' Cash Flow Forecasts Encourage Managers to Improve the Firm's Cash Flows? Evidence from Tax Planning

Recent research finds that analysts' cash flow forecasts have meaningful financial reporting ramifications, but, to date, the identified effects are unlikely to yield meaningful cash flow benefits. This study examines whether analysts' cash flow forecasts encourage managers to enhance the firm's cash flow position through tax avoidance activities. We evaluate the change in cash tax avoidance after analysts begin issuing cash flow forecasts relative to a propensity score matched control sample of firms without cash flow forecasts. Consistent with analysts' cash flow forecasts encouraging tax avoidance that enhances the firm's cash flow health, we find a negative association between cash tax payments and analysts' cash flow coverage. Additional analysis suggests this association is driven primarily by strategies to permanently avoid rather than to temporarily defer tax payments and that increased cash tax avoidance activity represents a nontrivial component of the overall increase in reported operating cash flows after the initiation of analysts' cash flow coverage.