Attacking the disability and absenteeism epidemic--behavioral health care solutions

To remain competitive in a global economy, employers must implement effective programs to stem escalating disability claims and increased costly absenteeism. This article discusses methods to counter this latest workforce epidemic. The authors discuss employee attitudes, legal considerations and behavioral health care solutions.     

Preference Heterogeneity in the Structural Estimation of Efficient Pigovian Incentives for Insecticide Spraying to Reduce Malaria

This paper bridges the theoretical and empirical literatures on the role of preference heterogeneity in characterizing externalities related to disease transmission. We use a theoretical structure similar to locational sorting models, which characterize equilibria in terms of marginal individuals who are indifferent between locations. In our case, the ‘locations’ are binary, consisting of whether or not to take a discrete preventative action. Individual heterogeneity arises in this structure due to variation in the costs and disutility associated with prevention. We demonstrate application of this approach in the context of participation in insecticide-based indoor residual spraying programs for malaria control in northern Uganda. We identify the parameters of our theoretical model using a stated preference choice experiment combined with estimates from published epidemiological studies. The model implies that Pigovian subsidies for participation in this context should decrease household malaria risk by 19–25%. Our approach can be applied to other bioeconomic externalities with spillovers from discrete preventative actions, including agricultural pest management and the control of pest infestations and invasive species.     

Noise trading, transaction costs, and the relationship of stock returns and trading volume

This article constructs an economic model of a rational trader who operates in a market with transaction costs and noise trading. The level of trading affects the rational trader's marginal cost of transacting; as a result, trading volume (through its effect on marginal cost) is a source of risk. This engenders an equilibrium relationship between returns and volume. The model also provides a simple way to scrutinize this relationship empirically. Empirical evidence supports the implications of the model.     

Evaluating the impact of government land use policies on tree canopy coverage

Many cities around the world are experiencing the negative effects associated with not sustaining a sufficient level of tree canopy coverage. Tree canopy provides environmental benefits such as clean water and air, erosion prevention, climate control, and native species habitat and provides economic benefits such as higher housing values and lower energy expenditures. We study local government policies in a large U.S. metropolitan area (the Atlanta Metropolitan Statistical Area) to find which policies perform the best at preserving or increasing urban forests. Empirical analysis reveals that a set of effective tree ordinance clauses, zoning ordinances, and having high quality smart growth projects in the community all help in preserving tree canopy in economically and environmentally meaningful amounts. Other actions, such as simply having a tree ordinance, designating a key management person in charge of tree programs, the presence of a tree board, and multiple communication channels were shown to be ineffective for our data set. Because benefits from tree canopy accrue to the local government's budget, to residents and to business owners, the entire community should gain from the passage of effective policies to preserve their local tree canopy. Estimated economic benefits from preserving tree canopy through an effective set of public policies are in the range of $10–15 million annually in an average county, mostly due to savings on stormwater management.     

Comparative advertisements and schadenfreude: when and why others’ unfortunate choices make us happy

Comparative advertisements often feature situations depicting consumers who use competitors’ brands being subjected to misfortunes. We examine schadenfreude, the pleasure derived from the misfortunes of others, as an affective response elicited by comparative ads, as well as consumers’ beliefs in tempting fate as a heretofore unexamined influence thereof. Consistent with our theory, we show that comparative ads depicting the misfortunes involving lower-quality (vs. higher-quality) competitors elicit greater schadenfreude, and that this is because choosing the former is perceived to tempt fate and to be more deserving of misfortune than the latter. Moreover, heightened levels of schadenfreude in turn lead to more positive attitudes and increased purchase intentions among consumers who are more (vs. less) reluctant to tempt fate.     

Measuring intracultural bimodality and cross-cultural diversity in American-Japanese business negotiations

One of the greatest challenges facing managers and administrators in an international environment is effectively communicating and negotiating with their foreign counterparts. Yet a large portion of their time is spent in these most critical activities. Much has been written about the differences in the perception, motivation and behaviour of people from different cultures, in particular about the American and Japanese interface. However, very little scientific confirmation and measurements exist. In this empirical study the nature and intensity of cross-cultural similarities and dissimilarities were tested and measured with selected statements on a Likert-type scale for a sample of 41 American and 29 Japanese practising managers, pointing to weak intracultural bimodality, but strong cross-cultural contrasts.     

Financial Advice and Individual Investor Portfolio Performance

This paper investigates whether financial advisers add value to individual investors’ portfolio decisions by comparing portfolios of advised and self‐directed (execution‐only) Dutch individual investors. The results indicate significant differences in characteristics and portfolios between these investor groups, but no evidence of differences in risk‐adjusted performance. The findings indicate that portfolios of advised investors are better diversified and carry significantly less idiosyncratic risk. In addition, evidence from an analysis of investors who switch to advice taking indicates that these findings (at least in part) reflect the effect of advisory intervention.