CHANGE–OVER TRIALS WITH BINARY DATA: ESTIMATION

Abstract. Estimation of success rates in the two–period change–over clinical trial with binary responses is considered under a mixed model for the design.     

More Powerful Portfolio Approaches to Regressing Abnormal Returns on Firm-Specific Variables for Cross-Sectional Studies

OLS regression ignores both heteroscedasticity and cross-correlations of abnormal returns; therefore, tests of regression coefficients are weak and biased. A Portfolio OLS (POLS) regression accounts for correlations and ensures unbiasedness of tests, but does not improve their power. We propose Portfolio Weighted Least Squares (PWLS) and Portfolio Constant Correlation Model (PCCM) regressions to improve the power. Both utilize the heteroscedasticity of abnormal returns in estimating the coefficients; PWLS ignores the correlations, while PCCM uses intra-and inter-industry correlations. Simulation results show that both lead to more powerful tests of regression coefficients than POLS.     

A macro model of change in specialty and spatial distribution of physicians in Canada, 1971-1981.

Most studies on physician distribution have examined static relationships involving the influence of such factors as socio-economic status. This study employs a causal model to study change in physician ratios (general practitioners and family physicians, and specialists) between 1971 and 1981 as a function of change in hospital bed ratios, population size, age distribution, educational attainment of the population, population "native", owner-occupied dwellings, and geographic proximity to the nearest metropolitan area, using physician data for 189 Canadian census divisions. The results, derived from LISREL VI analyses, indicate that specialists experienced increases in their supply in higher socio-economic status areas and in those areas losing general practitioners and family physicians (from 1971 to 1981). General practitioners and family physicians appear to have moved into areas with a relatively low percentage of owner-occupied dwellings and areas where a large percentage of the population is "native". Both groups of physicians appear to have increased in areas where there were increases in hospital facilities over the decade. The study confirms the known association between the two physician groups; that is, general practitioners and family physicians increased in areas gaining specialists and specialists increased in areas where considerable decreases in general practitioners and family physicians were occurring. Findings are discussed in terms of implications for physician manpower planning.     

Self-audits. First step in TQM

In the fall of 1987, West Paces Medical Center (WPMC), a 294-bed hospital in Atlanta, made a commitment to a new way of management, one that would make it a learning organization. The commitment would not be just to a higher quality of service, but would be a change in the way of doing business. The three components included in the hospital's quality improvement process were customer mindedness, process mindedness and statistical mindedness. West Paces employees concentrated on understanding customers and their needs, learning how they should perform each day to satisfy those needs, and routinely measuring the improvements made in daily processes. Led by Vicki S. Davis, director of quality resources, WPMC implemented, in November 1987, a program based on W. Edwards Deming's quality management method. One year later, 54 department managers had been trained in quality improvement. Davis shares her account of the quality improvement process on the following pages.     

Second opinion programs: continued savings from nonconfirmed surgeries

A second opinion program for elective surgery was one of the first tools utilized by employers to "manage" health care costs. These authors argue that second opinion programs continue to demonstrate their usefulness as part of overall health care cost-management effort.     

Bearing many children,morality, and ecology

The relationship between high fertility and population growth on the one hand, and environmental quality on the other, is explored. The author suggests that efforts to decrease the size of the global population will cause more problems than they solve. In contrast, he states that a global population of about 10 to 12 billion by the year 2050 is probably inevitable. Population should level off at that number and be capable of sustaining itself on this planet, providing the political problems the world faces can be resolved by then.     

Performance Effects of Setting a High Reference Point for Peer‐Performance Comparison

We conduct a field experiment, based on a registered report accepted by the Journal of Accounting Research, to test performance effects of setting a high reference point for peer‐performance comparison. Relative to providing the median as a reference point for online students to compare themselves to, providing the top quartile: damps performance for those below the median, boosts performance for those between the median and top quartile, and, in the case of outcome but not process comparison, boosts performance for those above the top quartile. We do not find that either reference point yields a greater average performance effect. However, providing the more effective reference point in each partition of initial performance yields a 40% greater performance effect than providing either reference point uniformly. Students access the online courses intermittently over the span of a year. Our effects derive from small portions of our treatment groups—5% in the case of process comparison and 26% in the case of outcome comparison—who accessed treatment and who were, on average, more active leading up to and during our intervention.     

Short‐Selling Risk

Short sellers face unique risks, such as the risk that stock loans become expensive and the risk that stock loans are recalled. We show that short‐selling risk affects prices among the cross‐section of stocks. Stocks with more short‐selling risk have lower returns, less price efficiency, and less short selling.     

Financial Flexibility and Opportunity Capture: Bridging the Gap Between Finance and Strategy

Logically, the practice of corporate finance and corporate strategy should be closely coordinated, but in reality there remains a massive gap between the two. This can lead strategically oriented firms to de‐emphasize or even discard NPV. Neither financial theory nor competitive strategy has been very open to the economic value of investment opportunity capture. Strategy must recognize that financial flexibility provides powerful advantages and financial theory must evaluate entire strategic programs rather than discrete, stand‐alone projects. Necessarily, the financial discussion of cost of capital and capital structure has to change. The authors offer two specific concepts to bridge the Gap between Finance and Strategy: 1) Reserve Financial Capacity is the annual sum of Free Cash Flow, Financing Flexibility and Cash Reserves over the period envisioned for strategy execution. Individual projects must belong to strategic programs in the sense that they either: 1) keep the base business running; 2) preserve an existing competitive position; or 3) form part of a program to enhance advantage or fashion a strategic breakout. 2) Strategically Sustainable Cost of Capital is the true, blended cost of capital required to complete an entire capital program. These concepts provide financial rigor to firms with well‐defined strategies and allow managements to wield Financial Flexibility as a strategic weapon, creating options on unique buying opportunities, such as at the bottom of industry cycles.