WIC Participation and Relative Quality of Household Food Purchases: Evidence from FoodAPS

We examine the effect of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) on the quality of household food purchases using the National Household Food Acquisition and Purchase Survey (FoodAPS) and propensity score matching. A healthy purchasing index (HPI) is used to measure nutritional quality of household food purchases. WIC foods explain the improvement in quality of food purchases, not self‐selection of more nutrition‐conscious households into the program. The improvement in purchase quality was driven entirely by WIC participating households who redeemed WIC foods during the interview week. There was no significant difference between WIC participants who did not redeem WIC foods and eligible nonparticipants. In this sample, there is no evidence that lack of access to clinics has adverse effects on participation nor is there evidence that HPI depends on supermarket access. A supervised machine learning process supports our main conclusion on the importance of WIC foods.     

The Law of 1/n Revisited: Distributive Politics,Legislature Size,and the Costs of Collective Action

The foundational model of distributive politics predicts a positive relationship between the number of legislative districts and the level of inefficiency of projects approved by the legislature—Weingast, Shepsle, and Johnsen's “Law of 1/n.” This relationship has been tested extensively in the empirical literature, with mixed results. This article presents a model wherein passing the omnibus legislation typical of distributive politics is a costly process. The model predicts a nonlinear relationship between legislature size and spending as increasing the size of the legislature also increases the costs of collective action. Results from an empirical exercise based on U.S. state legislatures (1962–2014) are consistent with the proposed model, showing a 1/n effect which diminishes at the margin as the legislature's size increases, especially in the lower chamber.     

Auditing Goodwill in the Post‐Amortization Era: Challenges for Auditors

The elimination of goodwill amortization in 2001 brought about significant change in how companies are required to account for goodwill. This change in accounting also brought with it new challenges for auditors, namely evaluating the reasonableness of management's assumptions related to goodwill valuation. In addition to introducing technical challenges, this task is particularly difficult given the misalignment in incentives it creates between managers who likely prefer to avoid recording an impairment and auditors who seek to minimize the bias in management's impairment testing. This study focuses on the consequences of the misaligned incentives that auditors face under the current goodwill assessment process. We find that the decision to record a goodwill impairment is associated with an increase in the probability of auditor dismissal. Consistent with the presence of significant friction with clients, our results also indicate that the likelihood of auditor dismissals is negatively related to the favorability of the impairment decision. Furthermore, we find that companies impairing goodwill prior to dismissing auditors subsequently employ auditors that are, on average, more favorable to clients in their impairment decisions.     

Impact of Auditor Report Changes on Financial Reporting Quality and Audit Costs: Evidence from the United Kingdom

While substantial revisions to auditor reporting requirements are being implemented internationally, the impact of these reforms on financial reporting quality is unknown. We exploit the United Kingdom's recent auditor reporting changes and find that the United Kingdom's new reporting regime is associated with an improvement in financial reporting quality as proxied by significant decreases in absolute abnormal accruals and the propensity to just meet or beat analyst forecasts, and a significant increase in earnings response coefficients. As for audit costs, we do not find a significant change in audit fees or audit delay surrounding the implementation of the new reporting regime. Taken together, the results of this study suggest that new auditor reporting requirements are associated with a significant improvement in financial reporting quality without detecting a significant increase in audit costs.     

The ‘light touch’ of the Black Death in the Southern Netherlands: an urban trick?

Although the fanciful notion that the Black Death bypassed the Low Countries has long been rejected, nevertheless a persistent view remains that the Low Countries experienced only a ‘light touch’ of the plague when placed in a broader European perspective, and recovered quickly and fully. However, in this article an array of dispersed sources for the Southern Netherlands together with a new mortmain accounts database for Hainaut show that the Black Death was severe, perhaps no less severe than other parts of western Europe; that serious plagues continued throughout the fourteenth and fifteenth centuries; and that the Black Death and recurring plagues spread over vast territories—including the countryside. The previous conception of a ‘light touch’ of plague in the Low Countries was created by the overprivileging of particular urban sources, and a failure to account for the rapid replenishment of cities via inward migration, which obscured demographic decimation. We suggest that the population of the Low Countries may not have recovered faster than other parts of western Europe but instead experienced a greater degree of post‐plague rural–urban migration.     

Foreign entry,quality, and cultural distance: product-level evidence from US movie exports

This paper investigates the effect of quality on foreign entry using data on international movie exports and direct and revealed measures of movie quality. Strict quality sorting is predicted by a model of firm heterogeneity. An alternative model is random entry, in which entry decisions are independent of the movie’s quality. I develop a discrete choice model that allows for both of these extremes as special cases, and use graphical techniques and simulations to compare their predictions to the data. I then use regression analysis to estimate the effect of quality on the propensity to enter foreign markets. A one-standard-deviation increase in quality increases the probability of entry by 25–50 %. Systematic differences in taste for different genre types are used to estimate a measure of cultural distance between countries. Movies in “culturally dependent” genres are less likely to enter foreign markets and their probability of entry is less sensitive to quality. The cultural distance measure enters a gravity equation of US bilateral trade significantly.