THE IMPACT OF HEALTH ON POVERTY: EVIDENCE FROM THE SOUTH AFRICAN INTEGRATED FAMILY SURVEY

This paper examines the impact of health status on poverty status, accounting for the endogeneity of health status. Using exogenous measures of health status from the South African Integrated Health Survey, we instrument for health status while allowing for covariation among the unobservables influencing both health and household poverty status. Health status, as captured by the body mass index, is shown to strongly influence poverty status. Households that contain more unhealthy individuals are 60 per cent more likely to be income poor than households that contain fewer unhealthy individuals, and this finding appears invariant to the choice of poverty line.     

The Role of Social Media in the Capital Market: Evidence from Consumer Product Recalls

We examine how corporate social media affects the capital market consequences of firms’ disclosure in the context of consumer product recalls. Product recalls constitute a “product crisis” exposing the firm to reputational damage, loss of future sales, and legal liability. During such a crisis it is crucial for the firm to quickly and directly communicate its intended message to a wide network of stakeholders, which, in turn, renders corporate social media a potentially useful channel of disclosure. While we document that corporate social media, on average, attenuates the negative price reaction to recall announcements, the attenuation benefits of corporate social media vary with the level of control the firm has over its social media content. In particular, with the arrival of Facebook and Twitter, firms relinquished complete control over their social media content, and the attenuation benefits of corporate social media, while still significant, lessened. Detailed Twitter analysis confirms that the moderating effect of social media varies with the level of firm involvement and with the amount of control exerted by other users: the negative price reaction to a recall is attenuated by the frequency of tweets by the firm, while exacerbated by the frequency of tweets by other users.     

Equilibrium Directed Search with Multiple Applications

We analyse a model of equilibrium directed search in a large labour market. Each worker, observing the wages posted at all vacancies, makes a fixed, finite number of applications, a . We allow for the possibility of ex post competition should more than one vacancy want to hire the same worker. For each a , there is a unique symmetric equilibrium in which all vacancies post the same wage. When a = 1, the common posted wage lies between the competitive and monopsony levels, and equilibrium is efficient. When a > 1, all vacancies post the monopsony wage. Some workers fail to find a job, some find a job at the monopsony wage, and some—those for whom there is competition—get the competitive wage. Equilibrium is inefficient when a > 1; in particular, there is excessive vacancy creation.     

Investment Decisions for Retirement Savings

We conducted a choice experiment to investigate whether retirement savers follow simple portfolio theory when choosing investments. We modeled experimental survey data on 693 participants using a scale-adjusted version of the latent class choice model. Results show that underlying variability in response was explained by age and “risk profile” score and that preferences varied with income and age. Younger individuals were conventionally risk averse, but older, higher-income individuals may react positively to both higher returns and increasing risk, when risk is presented as widening ranges of possible outcomes. Respondents tended to choose among a few similar investment options.     

Sensory evaluation and consumer acceptance of carbohydrate-based fat replacers in biscuits

The effect of three different carbohydrate-based fat substitutes in a baking powder biscuit was studied. The various fat replacers were substituted for fat in the biscuit formula at a rate of 33%, 66% and 100%. The biscuit variations were assessed by objective and sensory measurements. Comparable objective and sensory results indicated that crust colour was lightened significantly with increased use of the individual fat substitute. Tenderness decreased as substitute use increased when biscuits were rated by the sensory panel, but opposite results were obtained by the texture analyser. Objective analysis indicated that an increase in use of the fat substitute produced a moister biscuit, which was in agreement with the sensory panel. Consumer location testing rated the biscuits as moderately acceptable, but data did indicate a willingness for a product of this type to become available in the marketplace. The overall results do indicate that a fat substitute can be a viable additive in the basic biscuit, but there is a maximum at which the substitute can be used for fat and still produce an acceptable product.     

The Effect of Option Listing on Bid-Ask Spreads,Price Volatility,and Trading Activity of the Underlying OTC Stocks

This paper examines the changes in spreads, price volatility, and trading activity surrounding option listing for a sample of 144 OTC stocks. For this sample, both price volatility and volume increase, but the evidence on spreads is mixed. The increase in price volatility is attributed primarily to an increase in residual return variances. Furthermore, price volatility increases even after controlling for volume, insider trading, and spreads. Although these variables do not fully explain the causes for the increase in price volatility after option listing, the results suggest that liquidity trading or volume has a stronger effect on price volatility than insider trading. This study also finds that both the number of trades and institutional holdings show substantial increases, which are supportive of the notion that listing of options on OTC stocks attracts more attention.     

Partially defatted soy flour effects on sensory and physical characteristics of baked products

Physical and sensory characteristics of quick breads (e.g. muffins) formulated to contain 0%, 40%, 50% or 60% of partially defatted soy flour substituted for wheat flour were evaluated. As defatted soy flour levels increased, muffin batter linespread, baked volume, peak height at the crown and lightness (L* value) decreased while baked product air cell number, redness and yellowness (a* and b* values), crust surface unevenness, graininess, aftertaste, tenderness and moistness increased. Results indicate that partially defatted soy flour substituted for wheat flour at high levels in muffins adversely affected both physical and sensory characteristics.