Variation Across Price Segments and Locations: A Comprehensive Quantile Regression Analysis of the Sydney Housing Market

Standard house price indices measure average movements of average houses in average locations belonging to an average price segment and hence obscure spatial and cross‐sectional variation of price appreciation rates even within a single metropolitan area. This article combines penalized quantile regression techniques with the hedonic imputation approach to reveal such kind of variation. The method is applied to house transactions from Sydney between 2001 and 2014. The analysis finds significant variation across sub‐markets over time and in particular during the boom‐and‐bust cycle peaking in 2004. Appreciation rates were highest for suburban, low‐priced and lowest for inner‐city, high‐priced houses.     

Collectivism in the labor market: Evidence from second generation immigrants in the United States

This study investigates the role of collectivism on labor market outcomes in an individualist country. We explore collectivism as an intergenerationally transmitted cultural value and analyze its explanatory power for the economic outcome of 21,000 male homogamous second generation immigrants in the US. Our collectivism proxy is derived from the country of ancestry’s historical disease environment because collectivistic values have been particularly advantageous in countries with a greater prevalence of disease-causing pathogens. Employing this new collectivism proxy that identifies collectivism more precisely than previously used cultural proxies, we find that higher scores of collectivism are associated with higher labor force participation and income earned in the US. The results on income are channeled through the number of hours worked and self-selection into jobs that require collectivistic traits. By analyzing the labor market performance of second generation immigrants, we are the first to show an occupational selection along cultural skills implying that second generation immigrants sort into occupations that demand skills on which they have a “cultural comparative advantage”.     

Research note: the other side of the stage,revealing compositional differences in Flemish amateur theatre audiences

This research note aims to address the lack of research focused on the audiences of amateur theatre and examines how audiences of artistic- (i.e. participating in festivals with high artistic requirements) and social- (i.e. not participating in those festivals with high artistic requirements) oriented amateur theatre groups differ. This is achieved by performing a quantitative study of eight amateur theatre audiences in Flanders (Belgium). Analyses of 538 standardised questionnaires derived from on-site data collection, show that the audiences of artistic amateur groups significantly differ from the audiences of social-oriented amateur theatre groups. Amateur theatre groups with an explicitly artistic orientation have a significantly younger audience that had participated in other cultural events over the previous six months. They are also often recruited by word of mouth. By contrast, social amateur theatre groups attract a significantly older audience, including those who live in the vicinity.     

From distress to exit: determinants of the time to exit

This paper analyses the duration of the time to exit of distressed firms, differentiating between court driven exits (mainly bankruptcies) and voluntary liquidations. It examines how long firms survive after initial signs of economic distress. The study is conducted on an extensive dataset of 5,233 Belgian distress-related exits of mature firms, the majority being privately held. The results highlight that slack resources have an opposite effect on the timing of court driven exits and voluntary liquidations. On the one hand, high levels of available and potential slack increase the time to court driven exit, as they allow distressed firms to postpone an impending court driven exit. On the other hand, high available slack resources shorten the time to voluntary liquidation, since they make voluntary liquidation easier. Further, a high level of stakeholder dependence increases the time to exit after distress, whether the firm exits through voluntary liquidation or through a court decided exit. This is explained by the fact that stakeholder dependence increases the complexity of the exit decision and the exit procedure.     

THE PUZZLING DIVERGENCE OF RENTS AND USER COSTS, 1980–2004

This paper demonstrates that, in the context of U.S. housing data, rents and ex ante user costs diverge markedly—in both growth rates and levels—for extended periods of time, a seeming failure of arbitrage and a puzzle from the perspective of standard capital theory. The tremendous volatility of even appropriately‐smoothed ex ante annual user cost measures implies that such measures are unsuitable for inclusion in official price statistics. The divergence holds not only at the aggregate level, but at the metropolitan‐market level as well, and is robust across different house price and rent measures. But transactions costs matter: the large persistent divergences did not imply the presence of unexploited profit opportunities. In particular, even though detached housing is readily moved between owner and renter markets, and the detached‐unit rental market is surprisingly thick, transactions costs would have prevented risk‐neutral investors from earning expected profits by buying a property to rent out for a year, and would have prevented risk‐neutral homeowners from earning expected profits by selling their homes and becoming renters for a year. Finally, computing implied appreciation as a residual yields a house price forecast with huge errors; but either longer‐horizon or no‐real‐capital‐gains forecasts—which turn out to have similar forecast errors—imply a far less divergent user cost measure which might ultimately be useful for official price statistics. Some conjectures are offered.     

FREE CASH FLOW AND PUBLIC GOVERNANCE: THE CASE OF ALASKA

In a widely cited 1986 article in the American Economic Review, Michael Jensen gave the concept of free cash flow (FCF) a new twist by redefining it as cash flow in excess of that required to fund all projects with positive net present values. Put another way, FCF represents funds available in the firm that managers may choose to hold as idle cash, return to shareholders, or invest in projects with returns below the firm's cost of capital. In redefining FCF in this way, Jensen converted FCF from a measure of economic income and value into a measure of corporate assets available for discretionary, and potentially value‐destroying, use by firm managers. And, as he argued in his important article, managers in mature businesses with substantial free cash flow have a tendency to destroy value by plowing too much capital back into those businesses or, often worse, making ill‐advised acquisitions in unrelated businesses. Several methods have been developed in financial markets and internal corporate governance systems to discourage managers from wasting FCF. Better monitoring by boards of directors, large ownership blocks, and properly aligned management compensation contracts are all parts of the solution. And the extraordinary increase in stock repurchases in recent years, invariably applauded by investors, is another illustration of the market's success in encouraging companies to address their free cash flow problems. But if the “FCF problem” of the private sector has attracted considerable attention from finance scholars, the problem is even more acute in the public sector, where FCF can be thought of as tax revenue in excess of what is required to finance well‐defined and generally accepted levels of public services. Unlike the private sector, in the public sector there are neither measures nor mechanisms by which to monitor and constrain wasteful spending by elected officials. In this article, the authors attempt to measure the costs to taxpayers of government FCF using the case of Alaska, which since 1969 has received a huge windfall of tax revenue from North Slope oil leases. After examining the state's public finances from 1968 through 1993, the authors offer $25 billion as a conservative estimate of the social losses from Alaska's waste of free cash flow during that 25‐year period.     

Returns to Initial Shareholders in Savings Institution Conversions: Evidence and Regulatory Implications

In this paper, stock prices for savings institutions that have converted to the stock form of organization are examined. Event-study methodology is used to focus on the returns to initial shareholders in the period immediately following initial trading. The results of the study indicate significant positive returns in savings institution conversions in the first several trading days, suggesting a one-time wealth transfer from depositors not exercising their rights to initial shareholders. The results also provide support for the efficiency of the market as the market price adjusts quickly in the first two days of trading after the public offering. Given the FHLBB's objectives, there appears to be little cause for regulatory concern although initial returns are significant.     

Marketing financial services to all levels of affluence

This study examines efforts being made by commercial banks to satisfy their obligations under the Community Reinvestment Act while at the same time responding to changes in their economic and competitive environments. Banks are being directly and indirectly mandated by outside forces to find ways to serve all segments of their markets. What one could consider the banks' choices or prerogatives, such as served markets, selection and pursuit of desired market niches, differentiation strategies, and positioning alternatives, are all being affected by outside regulatory forces. In an effort to identify the marketing-related factors that differentiate the two groups, this study compares the policies and characteristics of those institutions that are satisfying their regulatory obligations to those institutions that are not satisfying their obligations. © 1995 John Wiley & Sons, Inc.     

Consumer–brand assemblages in advertising: an analysis of skin,identity, and tattoos in ads

This paper discusses how the use of tattoos in advertising renders diverse brand–consumer assemblages visible. In considering advertising practitioners as professionals of entanglement, the paper emphasizes the embeddedness of practitioners’ use of tattoo symbolism in institutionalized marketing systems and in the cultural history of tattooing. In accordance with the recent emphasis on the importance of material devices for understanding contemporary sociality, this paper presents a semiotic analysis of a convenience sample of advertisements depicting tattoos. Tattoos are productive for the study of brand–consumer assemblages because they are situated on the human skin, which is a mediator between the individual and the socio-material world. Furthermore, tattoos reproduce discourses of both mainstream fashion and deviant subcultural identification, which imbue tattoo symbolism with communicative potency. This analysis demonstrates how the emergence of brand tattoos in advertising challenges the dominant consumer centrism in consumer research and suggests a networked, emerging understanding of the subject in which agency is distributed in socio-technical assemblages.