AIDing contraception: HIV and recent trends in abortion

Using a difference-in-differences estimation framework and state-level data, we investigate the potential role of HIV/AIDS in contributing to declining abortion utilization in the United States. Our results suggest that the perceived risk of HIV contraction negatively affected unwanted pregnancies. Specifically, a 10% increase in HIV incidence is associated with 0.34–1.1% fewer abortions per live births, an effect that can account for at least one-tenth of the sharp decline in abortions observed from the early 1980s to mid-1990s.     

ALTERNATIVE MEASURES OF THE AVERAGE DURATION OF UNEMPLOYMENT

Four alternative measures of the average duration of unemployment are examined with the intention of illustrating: (1) the biases inherent in the average incomplete duration of unemployment, a statistic that is often the only one reported by many statistical agencies; and (2) the robustness of the average complete duration of unemployment to a host of assumptions underlying its derivation by non-parametric methods. Canadian data are employed, but the results offer a guide to the construction of the average complete duration of unemployment that may have broader applications.     

A financial planning model for presidential candidates

The necessity of entering a sequence of interrelated state primaries has forced presidential candidates to be much more deliberate in planning campaign finances. This paper presents a linear programming model for optimal allocation of time and money to each primary in order to maximize the number of delegates won. The model attempts to quantify and exploit the relationships between performance in early primaries and performance in later primaries, which has heretofore been labeled the “snowball effect.” Finally, the model, whose major use would be in overall strategic planning, is illustrated with an example.     

Profit maximisation vs. agency: an analysis of charitable giving by UK firms

The charitable giving of a large sample of publicly quoted UKfirms is analysed within a model that explores the profit maximisationand managerial utility enhancement motives for giving. The empiricalmethod draws a distinction between the decision to participatein giving and the determination of the amount of corporate contributions.Firm size and advertising intensity are found to be positivelyassociated with the probability of participation in giving.Stricter corporate governance and the rate of directors' remunerationare negatively related to the probability of participation.Among givers, the rate of giving is related positively to R&Dintensity, the rate of directors' remuneration, and corporateprofitability and negatively to firm indebtedness.     

On the informational content of advice: a theoretical and experimental study

This paper examines the market for advice and the underlying perception that advice is useful and informative. We do this by first providing a theoretical examination of the informational content of advice and then by setting up a series of experimental markets where this advice is sold. In these markets we provide bidders with a demographic profile of the “experts” offering advice.The results of our experiment generate several interesting findings. The raw bid data suggest that subjects bid significantly more for data than they do for advice. Second, in the market for advice there appears to be no consensus as to who are the best advisors although on average economists demand the highest mean price and women suffer a discount. In addition, we find that whether a subject suffers from a representativeness bias in the way he or she processes data has an impact on how he or she bids for advice and on his or her willingness to follow it once offered. Finally, we find that on average people impute a low level of informativeness onto advice, consistent with their bidding behavior for data versus advice.This work was done under grant number SES-0425118 of the National Science Foundation. The authors would like to recognize the Center for Experimental Social Science at New York University for its additional support. We also acknowledge the help of Elizabeth Potamites for her research assistance.     

Identifying contracts,combinations and conspiracies in restraint of trade

Antitrust guidelines rely on structural screens to review horizontal merger proposals for possible anti-competitive effects. This paper extends this screening approach to forecast where industry cartels will form, and where cartel agreements are more likely to raise price. I test the screen's reliability for a unique data set of legal, privately enforced industry cartels that formed under the Webb-Pomerene Export Trade Act. Consistent with screening assumptions, I find that cartels formed more frequently in industries with significant potential market power, high barriers to entry, and conditions facilitating the enforcement of agreements. However, these characteristics generally perform less well at distinguishing when cartels are likely to raise price without generating offsetting cost-savings, suggesting that screening is reliable only as a preliminary check for possible anti-competitive behavior.     

Does an Audit Judgment Rule Increase or Decrease Auditors' Use of Innovative Audit Procedures?

The current audit environment encourages auditors to conduct defensive auditing procedures in lieu of using new, innovative, and potentially more effective audit procedures, due to concerns these procedures may be second-guessed in litigation or by audit inspectors such as the PCAOB. As a result, auditors may prefer traditional “generally accepted” procedures over innovative procedures that are potentially more effective. We test recent proposals that an Audit Judgment Rule (AJR) encourages the use of innovative, and potentially more effective, audit procedures analogous to the similar Business Judgment Rule that affords legal protections to corporate directors. Under an AJR, litigators or audit inspectors could not second-guess auditor judgments, even if they perceive that alternate judgments would have ordinarily been reached, provided the auditor's judgment was made in good faith and in a rigorous manner. However, the AJR's requirements that auditors must defend the rigor of their innovative judgments could potentially backfire and lead auditors to select more traditional procedures. Under the framework of goal activation theory, we conduct an experiment with audit managers and seniors and find that an AJR makes auditors less likely to select innovative audit procedures, particularly when audit risk is high. They do so despite believing the innovative procedures to be more effective than the traditional procedures. Findings from a supplementary experiment with experienced auditors further suggest that national office affirmation of the reasonableness of the procedures does not help overcome this effect. Overall, our findings suggest that an AJR may have the unintended consequence of further increasing auditors' focus on more traditional, and potentially less effective, audit procedures.