Healthy lifestyle and safety: An expected net benefit approach to seat belt use

This paper examines the relationship between motorist safety belt use and three lifestyle behaviors affecting health. A healthy lifestyle affects benefits of seat belt use because it indicates a greater value on safety. If individuals are rational in their behavior, we expect consistency across health and safety choices. Using a nationwide survey sample and logit analysis we find lifestyle has expected effects on belt use holding constant individual and vehicle characteristics. Illustrations for two different lifestyles are considered: (1) smoking 1 pack per day, 2 years between dental visits, and no regular exercise and (2) no smoking, 1 year between dental visits and regular exercise. Healtiher lifestyle increases the probability of seat belt use by more than 50% for typical individuals     

Big brands,big cities: How the population penalty affects common,identity relevant brands in densely populated areas

The population density of a geographical area has a well-known and strong positive effect on sales in the area. Yet, for some brands, there may be factors that affect the strength of this density-sales relationship. The present research shows that for product categories that consumers use to signal their identities (e.g., clothing, restaurants and cars), the strength of this relationship varies with brand commonness. Consumers residing in densely populated areas are motivated to express their distinctiveness by reducing their preference for identity relevant brands that are common, such as large chains and brands owned by many people. Thus, as identity-relevant brands become more common, they suffer from a “population penalty” – a weakening of the positive effect of population density on sales. We show this effect with three experiments and two empirical analyses of automobile and alcohol sales. Our findings extend literature on distinctiveness theory by demonstrating these effects at the community level and provide insights for marketers on accounting and adjusting for this effect.     

Are Derivative Warrants Overpriced?

This study investigates the pricing efficiency of Hang Seng Index (HSI) derivative warrants in Hong Kong. Different from similar research, the study examines the pricing efficiency of index warrants by comparing their implied volatilities (IV) with realized volatility (RV). Although prior studies find that warrants are more expensive than the corresponding options, they are not necessarily overpriced in the conventional sense—that is, relative to the RV. This approach allows the study to test the pricing efficiency of warrants via a test of their information content. Moreover, unlike studies that focus on data at market close, the study uses a large sample of highly synchronous intraday, firm, bid–ask quote data to avoid possible distortions arising from intraday variations in liquidity and pricing in the instruments. The data also helps eliminate the potential nonsynchronous price problem that may affect the test results. Consistent with the results from previous studies, we find that warrants are often more expensive than options. This result is attributed to the inability of non‐issuers to sell short, and the high participation rate of unsophisticated investors in the warrants market. However, regression analysis shows that IVs from ATM and OTM warrants provide unbiased volatility forecasts, and that IVs from ATM options do not subsume the information content of ATM warrants. ATM warrant prices are in line with the RV and are efficiently priced. Simulation results show that writing warrants is more profitable than writing options, and that the overpricing is directly related to the volatility premium.     

The Spillover Effects of Industrial Action on Firm Profitability

While it is generally accepted that strikes can have a negative impact on a firm's performance, the direct effects of a strike on the affected firm may be only one component of the total impact resulting from the action. The existence of indirect or spillover effects can also have important implications for the economic performance of competing firms. This paper uses a panel of firm-level financial and strikes data for a large sample of firms in Australian manufacturing to determine the extent of direct and spillover effects of industrial action.     

Import Competition and Labor Productivity

The impact of import competition on labor productivity is examined using panel data for a sample of Australian manufacturing firms over the period 1984–1993. Import competition is found to interact with domestic competition; such the positive impact of import competition on the level and rate of growth of labor productivity rises with the degree of concentration among domestic producers. The results suggest that lowering border protection on manufactured imports into Australia has led to enhanced productivity from domestic producers, especially from those producers in highly concentrated industries.     

Knowledge sharing in an organization

Managers are always seeking effective policies that encourage employees to share their knowledge with others in an organization. The appropriate organizational incentives are difficult to investigate due to human factors and other institutional complexities affecting sharing behaviors of individuals. Conducting laboratory or field experiments to evaluate the effectiveness of various organizational incentive policies is unrealistic. This work proposes a novel agent-based modeling approach to simulate the actions of knowledge sharing between actors in an organization. Several human and institutional factors in this artificial world were manipulated to understand knowledge sharing. The simulation results produce the following interesting findings. (1) The initial state of actors' action affects the knowledge-sharing action regardless of the adopted strategy. (2) Poorer collective capability among the population lowers the knowledge sharing behaviors. (3) The incentive policy has restricted effects for increasing the sharing action. Rewarding each knowledge-sharing action is more effective than the periodic organizational incentives to encourage actors' knowledge sharing behaviors.     

Does Local Competition Impact Interest Rates Charged on Small Business Loans? Empirical Evidence from Canada

Using a unique survey database of Canadian small business loans,we find a negative and statistically significant relation between the number of localcompetitors and small business loan rates. This result is robust to the presence of a wide varietyof covariates intended to proxy the effects of both loan specific details and individualcharacteristics. These findings further suggest that the local markets definition applied to small businessloans is still relevant, despite recent technological innovation such as internet banking.     

The Chinese RMB: Its Value,Its Peg,and Its Future

The valuation of the Chinese renminbi (RMB) has drawn lots of attention lately and a great deal of pressure on the part of developed nations for revaluation. In addressing the issue of valuation, this paper develops a new purchasing power parity (PPP) index of China’s exchange rate and finds that the while undervalued, the undervaluation is neither unusual nor bad policy. Moreover, China’s overall external trade balance does not seem to be that far out of equilibrium. China’s desire to join the G-7 club is likely to result in abandoning its peg, however, despite the increased risk to its economic development.JEL Classification F310