Insider trading,growth opportunities and the market reaction to new financing announcements*

Abstract

This paper explores the profitability of momentum strategies, by investigating if a momentum strategy is superior to a benchmark model once the effects of data-snooping have been accounted for. Two data sets are considered. The first set of data consists of US stocks and the second one consists of Swedish stocks. For the US data strong evidence is found of a momentum effect and hence the hypothesis of weak market efficiency is rejected. Splitting the sample in two parts, it is found that the overall significance is driven by events in the earlier part of the sample. The results for the Swedish data indicate that momentum strategies based on individual stocks generate significant profits. A very weak or no momentum effect can be found when stocks are sorted into portfolios. Finally, and perhaps most importantly, results show that data-snooping bias can be very substantial. Neglecting the problem would lead to very different conclusions.     

Determinants of herbicide use in rice production in the Philippines

This study identifies farm‐specific and market factors affecting the adoption of herbicides and the level of herbicide use by rice farmers in the Philippines. This requires the application of a modified version of Heckman's two‐step method to estimate a random‐effects double‐hurdle model for unbalanced panel data. The age of the farmer, household size, and irrigation use are significant determinants of the decision of farmers to adopt herbicides as an alternative to manual weeding, while economic variables such as the price of herbicides, total income, and access to credit determine the level of herbicide use. Determinants of both adoption and level are land ownership, farm area, and the method of crop establishment. These results are potentially relevant when designing policies to reduce excessive herbicide use or to encourage the adoption of alternative weed control methods such as integrated weed management.     

Mixed Logit Model Performance and Distributional Assumptions: Preferences and GM foods

Using mixed logit models to analyse choice data is common but requires ex ante specification of the functional forms of preference distributions. We make the case for greater use of bounded functional forms and propose the use of the Marginal Likelihood, calculated using Bayesian techniques, as a single measure of model performance across non nested mixed logit specifications. Using this measure leads to very different rankings of model specifications compared to alternative rule of thumb measures. The approach is illustrated using data from a choice experiment regarding GM food types which provides insights regarding the recent WTO dispute between the EU and the US, Canada and Argentina and whether labelling and trade regimes should be based on the production process or product composition. This paper draws work commissioned by UK Department of Environment Food and Rural Affairs (DEFRA). The views presented in this paper are those of the authors alone and should not be regarded as those of DEFRA or of individuals within DEFRA.     

Proximity and animal welfare in the context of tourist interactions with habituated dolphins

The long-term sustainability of wildlife tourism depends on integrating visitor demands with resource management, requiring an understanding of tourist motivation. Managing the conflict between access to the animals and welfare, however, may diminish the experience for tourists. This paper identifies trade-offs tourists are willing to make between access and animal welfare, associated with feeding habituated bottlenose dolphins (Tursiops sp.) in Monkey Mia, Western Australia. Using a choice modelling technique, we were able to determine monetary values of visitor experiences. Compared to the current guaranteed interaction with dolphins (and a daily resort entrance fee), respondents were willing to pay significantly higher hypothetical entrance fees to avoid a decrease in proximity to, or probability of, the dolphin interaction. However, negative impacts on dolphin welfare had a negative impact on visitor utility. Over 80% of visitors (n = 244) accepted management regulations resulting in decreased time with and proximity to dolphins, if those addressed welfare concerns and were communicated clearly. Thus, while visitors placed the greatest value on the proximity and predictability, they were willing to trade off these aspects if they improved dolphin welfare. We provide management suggestions based on these results.     

Railroad deregulation,carrier behavior,and shipper response: A disaggregated analysis

The Staggers Rail Act of 1980 provided American railroads with almost complete relief from rate regulation. Regulatory reforms resulted in rapid and pronounced changes in firm behavior and an eventual reconfiguration of the industry as a whole. This investigation provides a highly disaggregated study of deregulated rail rates for seventeen commodities. The results indicate that the Staggers Act fundamentally altered the way in which rail carriers price their services. As importantly, the results suggest that shippers have responded to altered railroad behavior by changing the characteristics of their shipments. Together, the changes in railroad behavior and shipper responses to these variations have produced lower railroad rates for a small but measurable number of movements across a wide range of commodities.     

IRREVERSIBLE SUPPLY FUNCTIONS REVISITED

This paper presents a successful application of an irreversible supply model to the UK egg sector. The model has been developed to overcome the problems that the conventional approaches to irreversible supply modelling face when used with a partial adjustment framework. The results indicate that the supply response to price changes under excess capacity is less than a third of that under non-excess capacity, but that the long-run response is symmetric, as required by the underlying theory. Furthermore, the long-run elasticity from a conventional, symmetric, partial-adjustment model is some 40% larger than that of the asymmetric model, implying that the importance of the asymmetric specification extends beyond an interest in the short-run adjustment path.     

The role of attributions in consumer perceptions of retail advertisements promoting price discounts

This study examines whether information in an advertisement promoting a price discount is capable of affecting attributions made about the price reduction and whether these attributions, in turn, affect consumer perceptions and evaluations of the sale. Findings show that price image of the retail advertiser had a strong effect on attributions pertaining to the merchant and a marginal effect on product attributions. The attribution variables, in turn, explained significant amounts of variance in criterion variables measuring consumer perceptions of value, attitude toward the ad, and shopping intentions, beyond the variance explained by the store and discount claim variables manipulated in the study. These results suggest the importance of the role of attributions made by consumers when exposed to ads promoting discounts.     

Sanctions will Exacerbate Apartheid

The imposition of sanctions, far from stimulating the economic independence of blacks, is likely to increase repression and bloodshed. John Burton, Research Director at the Institute of Economic Affairs, regrets the triumph of emotional impulse over common sense.     

INTRODUCTION / THE STATUS OF WOMEN ECONOMISTS IN US UNIVERSITIES AND THE WORLD / THE STATUS OF WOMEN ECONOMISTS IN UK UNIVERSITIES / THE STATUS OF WOMEN ECONOMISTS IN CANADIAN UNIVERSITIES / THE STATUS OF WOMEN ECONOMISTS IN CHINA'S UNIVERSITIES

Abstract

These Explorations, by eight authors from Canada, China, the US, and the UK, examine the current status of women in economics (with an eye mainly toward their status in the academic branch of the profession). The four sections of the work analyze results of surveys that show the distribution of academic positions among women economists in universities in Canada, the UK, the US, and China. The work also provides a short history of the development of committees and groups interested in furthering the status of women in the economics profession and suggests ways to improve the efforts of such groups and the status of women economists.