What Does the Stock Market Tell Us About Real Estate Returns?

This paper analyzes the risks and returns of different types of real estate-related firms traded on the New York and American stock exchanges (NYSE and AMEX). We examine the relation between real estate stock portfolio returns and returns on a standard appraisal-based index, and find that lagged values of traded real estate portfolio returns can predict returns on the appraisal-based index after controlling for persistence in the appraisal series. The stock market reflects information about real estate markets that is later imbedded in infrequent property appraisals. Additional analysis suggests that the differences in the return and risk characteristics across different types of traded real estate firms can be explained in part by appealing to real estate market fundamentals relating to the degree of dependence of the real estate firm upon rental cash flows from existing buildings. These findings highlight the heterogeneity of securitized real estate-related firms.     

Derivative trading by utility firms

This paper examines the use of derivatives by a utility company. The hedging problem for utilities is atypical; the goal is not strictly to minimize average costs. Rather, the objectives are to minimize the upside risk associated with extreme bills, volatility of bills, and average expected bills for consumers. We characterize the optimal positions on futures contracts and options on futures that a utility company should assume. The results indicate that the use of derivatives (both futures and options on futures) is an efficient means of optimizing the objective functions without exposing consumers to speculative risk.     

A simple characterization of majority rule

Summary. Assuming an odd number of voters, E. S. Maskin recently provided a characterization of majority rule based on full transitivity. This paper characterizes majority rule with a set of axioms that includes two of Maskin's, dispenses with another, and contains weak versions of his other two axioms. It allows the number of voters to be odd or even. Received: December 23, 1998; revised version: May 10, 1999     

FDICIA and bank failure contagion: Evidence from the two failures of first city bancorporation

We investigate contagion effects from the two failures of First City Bancorporation—the only large regional bank to fail before and after FDICIA. FDICIA imposes changes in the bank failure resolution process that expose uninsured depositors to substantially greater risk. We find that shocks to First City’s weekly returns affect the conditional volatility of all but the most financially sound banks in the 1985–1987 period. This risk spillover effect is not evident in the period leading up to First City’s 1992 failure, however, which suggests that the regulatory changes embodied in FDICIA have not contributed to a more risky banking system. We appreciate the comments of Richard Cebula, Ken Kroner, Jim Pappas, Joseph Mason, an anonymous reviewer, and seminar participants at the 1996 meetings of the Financial Management Association.     

Spatial Organization of Marketing Facilities in Developing Countries: A Case Study of Oilseeds in Sudan

Little attention has been devoted to the study of spatial organization of marketing facilities in developing countries, even though such studies would be most useful for a wide range of marketing problems. The results of such studies could be valuable to private and public decision-makers in developing countries whose policies and decisions determine the number, size and location of marketing facilities. The spatial organization model developed in this paper for application to the oilseeds industry in Sudan demonstrates the relevance of this research technique for developing country studies of marketing facilities. A linear programming transshipment model is utilized to determine the optimal spatial organization of oilseeds in Sudan when the costs of oilseed assembly, processing and distribution of oil and cake to final destinations are considered simultaneously. The optimal spatial organization of oilseed processing plants was determined for six alternative solutions. Model results indicate that the optimal organization of processing plants would be obtained with fewer and larger plants, resulting in lower transportation costs.     

The past,present, and future of innovation research

Marketing Letters - The goal of a business is to enhance profitable revenue. Often this mission is accomplished by innovation, commonly by the process of bringing new products or services to...     

The past,present, and future of marketing strategy

Marketing Letters - This article provides a high-level overview of marketing strategy research and offers a number of suggestions of areas ripe for future research. We discuss the most fundamental...     

Economic freedom and migration: A metro area-level analysis

We examine the determinants of intra-U.S. population migration at the metropolitan area level (MSA), with an emphasis on the presence of policies that are consistent with economic freedom. We are the first to produce a multivariate regression analysis of migration and economic freedom at the local level. Combining a 1993–2014 unbalanced panel of MSA-to-MSA migration data from the Internal Revenue Service with a new economic freedom index for U.S. metropolitan areas, we find that a 10% increase in economic freedom of a destination MSA, relative to the economic freedom of an origin MSA, was associated with a 27.4% increase in net migration from the origin MSA to the destination MSA. If we use mean net migration flows as a benchmark, we would expect a 10% increase in relative economic freedom to increase net migration to the destination MSA by 22 workers per year from each other MSA.