Give Them Something to Smile About: A Marketing Strategy for Recruiting and Retaining Volunteers

Using a marketing perspective, this study investigates whether the issue of “fun at work” would appeal to volunteers as a part of an effort to enhance recruitment and retention. Specifically, we examined volunteers' attitudes toward fun, their perceptions of what kinds of activities are fun and what are not, and the relative importance of workplace fun in what they perceive as an ideal volunteer position. In general, we found that volunteers had positive attitudes towards fun and experiencing fun at work was associated with higher job satisfaction and lower turnover intentions. Although “a fun workplace” was ranked relatively low in importance relative to other reasons why they volunteer, creating such an environment could enhance retention. Some age and gender differences were found in the perceptions of whether certain activities are fun or not. The implications of these results and directions for future research are discussed.     

THE DESIGN OF MULTI-YEAR STOCK OPTION PLANS

Despite the explosion in the corporate use of stock options, the incentives created by stock options are not well understood by either the boards who grant them or the executives who are meant to be motivated by them. A major source of confusion stems from the corporate practice of using multi-year stock option plans. Such multi-year grants create subtle, potentially important links between current performance and future grants that can significantly dilute incentives for better performance.
For example, so-called "fixed value" plans provide very weak, even perverse, incentives ex ante since the value of future option grants is completely insulated from current performance. Under such plans, an executive's reward for superior performance is to receive fewer options, and to receive more options for substandard performance. In contrast, the fixed number plan creates an intrinsic link between changes in this year's stock price and changes in the value of future option grants.
The author also reports the findings of new empirical research that shows that stock option plans, taken as a whole, have a pay-to-performance correlation that is eight times stronger than that of salary and bonus. But, consistent with the analysis above, fixed value option plans have pay-to-performance that is only six times that of salary and bonus, as compared to ten times for fixed number plans.     

Racial Fractionalization and School Performance

The literature on racial “peer effects” suggests that diversity improves at least some students' school performance. However, a literature in economic development posits that diversity may negatively affect school performance by undermining the efficient provision of education. This article empirically tests this claim, which we call the “public goods channel,” by examining the relationship between racial diversity and student performance in Ohio's school districts. We find that moving from a completely homogenous school district to one in which two racial groups have equal population shares is associated with a 7–17.5 percentage point decline in the passage rate on the state math exam, holding per pupil spending across districts constant. These results suggest that racial diversity is negatively associated with school performance but that the public goods channel is not responsible for this relationship.     

THE ARTICLES OF CONFEDERATION SHOW THE NEED FOR DIRECT TAXATION? IT JUST AIN'T SO!

Historians and economists often refer to the United States experience under the Articles of Confederation as evidence against decentralised government finance. While it is true that the US government had difficulty raising money from the states during this period, we argue that these facts are a benefit of the system, not a flaw. A 'bottom-up' system of finance, such as the one that existed under the Articles of Confederation, is an important check on Leviathan and has implications for United Nations fund-raising efforts and development economics.     

Controlling for Burnout in Estimating Mortgage Prepayment Models

Burnout is a consequence of unobservable predictive variables. This paper describes a methodology for estimating mortgage prepayment models which corrects for burnout. The paper generalizes the approach of Deng, Quigley, and Van Order (Econometrica, 68, 275–307, 1998) and Stanton (Rev. Finan. Stud.8, 677–708, 1995) in modeling the impact of unobservable variables as a probability distribution. The estimator is applied to a sample of loan histories and the results compared to a conventional logit analysis of the data. Predictions and simulations from both models are compared to illustrate the properties of the new estimator.     

Forecasting with an econometric model: Some recent results using the national institute model

It is widely believed that the large econometric models cannot be used for forecasting without considerable intervention on the part of the forecaster. In this paper we challenge this view by reproducing a number of recent forecasts published by the National Institute but without the ad hoc interventions used at the time. We show that in no case would the forecast, produced by the model used mechanically, have been radically different from that actually published. Further, in an ex-post comparison against actual out-turns, the mechanical model forecast is not obviously dominated by the published version.