The United States International Air Route Award Process: Shareholder Wealth Effects and Policy Implications

This study empirically investigates the market pricing dynamics of United States airline stocks in response to United States government allocations of exclusive, zero-priced international air route awards from the 1963 to 1993 time period. A $900 filing fee required by the Department of Transportation represents the only explicit monetary cost associated with the award of an international air route. This low fee suggests that the current award system subsidizes United States airlines by transferring valuable public property rights to private ownership and control for paltry explicit fees. The performed dollar abnormal tests suggest that the 82 analyzed international air routes have enriched airline shareholders by about $3.5 billion.     

Automobile styling as a shift variable: an investigation by firm and by industry

This paper reports the results of a test of the ability of the Stock Exchange industrial Classification system (SEIC) to provide homogeneous industry groupings of firms. Aggregation into ‘meta-industries’ is also explored. The analysis shows that while there are significant differences between the 14 SEIC industries considered, several appear to be largely nonhomogeneous with respect to certain of their fundamental economic and structural characteristics. Given this lack of homogeneity it is arguable that the SEIC has fallen shorts of its stated objectives with potential implications for the allocation of resources in UK capital markerts. The greater homogeneity of the four meta-industries derived indicate that use of industry groups at a higher level of aggregation than the SEIC might be more appropriate. A subsidiary objective of the investigation was to examine the potential benefits from adopting a quadratic discriminant methodology as opposed to the more conventional linear rule for studies of a related nature. Our results proved to be consistent with those found in other disciplines which demonstrate that the quadratic approach may have relatively little to offer in practice as opposed to theory.     

Economic news as a consumer product: An analysis of the effects of alternative media sources on the formation of consumer economic expectations

This study reports the results of a behavioral experiment in which 120 subjects were exposed to different media reports of the same monthly Bureau of Labor Statistics' unemployment reports. After reading the news stories, as reported by the CBS Evening News, The Wall Street Journal, and the Washington Post, the subjects were asked similar questions to those used in the University of Michigan's Survey on Consumer Sentiments. The results of the study suggest that consumer confidence may be sensitive to the selection of media source.

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Zusammenfassung Der Beitrag berichtet über eine Untersuchung individueller Unterschiede bei wirtschaftlichen Erwartungen, die nicht durch unterschiedliche wirtschaftliche Nachrichten, sondern — bei gleichlautenden Nachrichten — durch unterschiedliche Medien, über die sie vermittelt werden, hervorgerufen werden.Die Nachrichten entstammten den monatlichen Arbeitslosenberichten der amtlichen Beschäftigungsstatistik. Insgesamt 36 Nachrichtentexte der CBS Evening News, des Wall Street Journal und der Washington Post wurden für die Untersuchung so überarbeitet, daß die konkrete Quelle und der tatsächliche Zeitraum, auf den sich die Nachricht jeweils bezog, nicht mehr erkannt werden konnte. Die so bereinigten Nachrichten wurden 120 Versuchspersonen (Studenten) zum Lesen vorgelegt. Anschließend wurden ihnen Fragen zur Erhebung wirtschaftlicher Erwartungen vorgelegt.Die Ergebnisse machen deutlich, daß Unterschiede im Vertrauen auf die zukünftige wirtschaftliche Entwicklung bei gleichen inhaltlichen Nachrichten auf Unterschiede in den Nachrichtenmedien zurückgeführt werden können. Personen, die sich mehr auf Zeitungsinformationen stützten, kamen im Vergleich zu solchen, die sich eher auf das Fernsehen stützten, zu signifikant höheren Werten auf der Vertrauensskala. Dieses Ergebnis dürfte allerdings insofern verzerrt sein, als die bildliche Komponente einer Nachricht in der Untersuchung nicht berücksichtigt wurde.

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Stephen W. Pruitt is Assistant Professor in the Graduate School of Business, Indiana University, Bloomington, IN 47405, USA. George E. Hoffer is Professor in the Department of Economics, School of Business, Virginia Commonwealth University, Box 4000, Richmond, VA 23284-4000, USA.The authors are grateful to the Faculty Grant-In-Aid Program at Virginia Commonwealth University for funding.     

EXERCISING WILLPOWER: DIFFERENCES IN WILLPOWER DEPLETION AMONG ATHLETES AND NONATHLETES

This study presents the results from a controlled experiment designed to test for differences in willpower depletion between athletes and nonathletes. Individuals with more willpower are more likely to have high school and college degrees, higher earnings, better jobs, lower crime and poverty rates, and are less likely to be obese. Recent research has established that reserves of willpower get depleted, leaving individuals unable to carry out tasks that require further self‐control. The experimental results show that after administering a willpower‐draining task, athletes persisted for significantly longer—exhibited less willpower depletion—on an unsolvable puzzle than nonathletes. (JEL C91, J24)     

The efficiency of used vehicle markets: the case of technological obsolescence and differential repair records

This paper examines the effect of technological oboslescence, differential maintanance expenditures, and differential fuel efficiencies on the depreciated value of automobiles. Our results support the widely held belief that used vehicle markets are efficient. We show that the significant decline in the depreciated values of used automobiles is predominantly due to age. We also conclude that technological obsolescence causes a once-and-for-all decrease in the depreciated value of used automobiles, that for imported vehicle lines, differential maintanance expenditures affect depreciated value and, that for domestic vehicle lines, differential fuel efficiencies impact depreciated value.     

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.     

Impact of relational coordination on job satisfaction and quality outcomes: a study of nursing homes

This article develops a relational perspective on the coordination of work. Existing theory suggests that relational forms of coordination should improve performance in settings that are highly interdependent, uncertain and time‐constrained. Going beyond previous work, we argue that relational coordination should also improve job satisfaction by helping employees to accomplish their work more effectively and by serving as a source of positive connection at work. Using a cross‐sectional sample of nursing aides and residents in 15 nursing homes, we investigate the impact of relational coordination on quality outcomes and job satisfaction.     

AUTOMOTIVE RECALLS AND INFORMATIONAL EFFICIENCY

This study provides an empirical test of the informational efficiency of the stock market by exploring the stock price and volume patterns exhibited by Chrysler, Ford, and General Motors around the time of announcement of severe automotive recall campaigns. Because information concerning automotive recalls is released to the public via two distinct methods, which differ only with respect to the number of market participants notified of the recall campaigns, a differential performance analysis of stock returns and trading volume around both events provides evidence of the degree of informational aggregation in the stock market for three closely followed U.S. firms. The results of the study fail to support the definitional notion of informational efficiency with respect to the first public release date of severe recalls, as the vast majority of the stock market's response to recall announcements does not occur until the information is reported to all market participants. Further, tests of differential trading volume around the announcements suggest that some members of the financial community may be trading securities on the basis of the information contained in the first public announcement.     

Used vehicles,lemons markets,and Used Car Rules: Some empirical evidence

The purpose of the note is to highlight what the body of economic literature has to say about the subject of lemons markets in general, and used car markets in particular. This literature makes it easier to understand why the FTC might have deleted the known defects provision from its Used Car Rule.It is shown that the economic literature is divided on whether a lemons market actually exists in used vehicles. The authors' own research is supportive of the hypothesis that the Wisconsin statutes, with its known defects provision, has been ineffectual in that the mix of used vehicles transacting there is of not significantly better quality than the mix in neighboring states without such legislation.

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Gebrauchtwagen, Märkte mit mangelhaftem Angebot und Regeln zum Gebrauchtwagenhandel: einige empirische Befunde

Zusammenfassung Dieser kurze Bericht möchte herausstellen, was die ökonomische Literatur ganz allgemein zum Thema Märkte mit mangelhaften Produkten und zu Gebrauchtwagenmärkten im besonderen zu sagen hat. Aufgrund dieser Literatur ist es vielleicht leichter zu verstehen, warum die amerikanische Wettbewerbsbehörde keine Vorschrift über bekannte Mängel in die Bestimmungen über den Gebrauchtwagenhandel aufgenommen hat.Es wird gezeigt, daß in der ökonomischen Literatur umstritten ist, ob man bei dem Gebrauchtwagenmarkt überhaupt von einem Markt mit schadhaften Produkten (lemons market) gesprochen werden kann. Die Autoren sehen durch ihre eigenen Ergebnisse die Vermutung gestützt, daß die Statuten des Staates Wisconsin, die eine Offenlegung bekannter Mängel fordern, insofern ineffektiv sind, als die Gebrauchtwagengeschäfte in diesem Staat durchschnittlich nicht auf einem höheren Niveau abgewickelt werden als in Nachbarstaaten ohne eine solche Bestimmung.

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George E. Hoffer and Michael D. Pratt are Professors of Economics, School of Business, Virginia Commonwealth University, Box 4000, Richmond, VA 23824-0001, USA.     

Coordination Networks Within and Across Organizations: A Multi‐level Framework*

ABSTRACT There are important organizational phenomena that cannot be fruitfully examined without crossing levels of analysis, as others have shown. We argue that coordination of patient care in the current institutional environment is one such phenomenon. As organizations vertically disintegrate and outsource services that were once produced internally, coordination with external organizations becomes increasingly important for achieving desired performance outcomes. We describe the efforts of one hospital to extend the intra‐organizational coordination of patient care to encompass coordination with its external partners. The organization design and network perspectives are both conducive to spanning multiple levels of analysis. We show that the two perspectives together serve as a useful vehicle for developing a framework that links intra‐ and inter‐organizational coordination.