REDUCING FAT IN THE U.K. DIET — SOME LEGISLATIVE FACTORS

A high fat diet has been associated with a number of clinical conditions and it is recommended that the quantity of fat in the U.K. diet be reduced. Many foodstuffs of high fat content sold in the U.K. are subject to compositional regulations. The authors illustrate how the current regulations are acting to perpetuate the high fat nature of these food items and show how amendment of the legislation would be a useful strategy leading to a reduction in fat intake.     

Anomalies in Security Returns and the Specification of the Market Model

We examine the hypothesis originally advanced by Roll 12 that observed anomalies in excess returns can be explained by misspecification of the market model used to estimate systematic risk. We find substantial misspecifications in the model systematically related to size and period of listing of the securities in question. There is some evidence that these misspecifications are associated with systemic biases in measured betas used to construct excess returns.     

NUCLEAR POWER, SYSTEMATIC RISK, AND THE COST OF CAPITAL

Previous studies of the effects of adoption of nuclear technologies by electric utilities have concentrated on the period following the catastrophe at Three Mile Island (TMI) in 1979. The purpose of this study is to test whether increased risk effects on equity costs of nuclear-adopting utilities existed prior to that event. This study, using panel data and beta measures of systematic risk, concludes that a positive, significant, and persistent nuclear adoption effect existed even prior to TMI. Nuclear adoption increased equity costs, on average, 0.8 percent for periods following the adoption event. This is of the same order of magnitude as adoption effects estimated in other studies for the post-TMI period.     

The Effects of Unions on Firm Behavior: An Empirical Analysis Using Firm-Level Data

We evaluate the use of firm-level union coverage rates in empirical models of firm behavior and performance. We focus on the potential for measurement error in both firm- and industry-level data, and find that firm-level union coverage rates provide more precise estimates of union effects. Higher union coverage at a firm is associated with slower employment and sales growth, decreased productivity in nonmanufacturing firms, increased productivity in manufacturing firms, lower profitability, and less investment in durable assets, such as research and development.