Supply response of farm program in rice-growing states

This study aims to develop an acreage response model for rice-growing states using a policy-inducing variable. The single equation regression model for each rice-producing state is estimated by using the ordinary least square multiple regression procedure after log transformation. Data for the period 1959 to 1988 for acreage plantation, market price, target price, loan rate, and acreage reduction rate are used in designing the policy-inducing price. The estimated parameter shows a significant inverse relationship between the rice acreage planted and policy-inducing prices in all of the rice-growing states, with the exception of Louisiana. The estimated short-run elasticities for Arkansas, California, Louisiana, Mississippi, and Texas are -0.36, -0.68, 0.30, -0.37, and -0.59, respectively. The heterogeneity in the magnitude of the elasticities suggests the need for redesigning the rice programs to generate desirable acreage responses from all of the rice-growing states.     

PRICE AND VOLUME EFFECTS ASSOCIATED WITH THE CREATION OF STANDARD & POOR'S MIDCAP INDEX

In this paper we explore price and volume effects associated with the 1991 creation of Standard & Poor's MidCap 400 index. Prior work on changes in the composition of existing indices finds a significant price response to the announcement. Various authors link the effect to price pressure, information, an outwardly shifting demand curve for securities, and the increased attention that comes with inclusion in an index. Using event study methodology, we find significant price and volume effects during the two weeks leading up to the Standard & Poor's announcement, but no significant effect in the two-day interval around the event. Apparently, information leakage and/or anticipation preceded the creation of the index. The price run-up is permanent since the positive abnormal returns leading up through the announcement are not associated with significantly negative abnormal returns after the announcement. In addition, MidCap stocks significantly outperform the market during the fifty-two weeks following the announcement. Using cross-sectional regressions, we show that these prior-period abnormal returns are positively related to abnormal volume and institutional holdings. We also find that firms trading over-the-counter had larger price run-ups than NYSE or AMEX firms.     

Effort and Performance: What Distinguishes Interacting and Noninteracting Groups from Individuals?

We study how group membership affects behavior both when group members can and cannot interact with each other. Our goal is to isolate the contrasting forces that spring from group membership: a free‐riding incentive leading to reduced effort and a sense of social responsibility that increases effort. In an environment with varying task difficulty and individual decision making as the benchmark, we show that the free‐riding effect is stronger. Group members significantly reduce their effort in situations where they share the outcome but are unable to communicate. When group members share outcomes and can interact, they outperform groups without communication and individuals. We show that these groups do as well as the best constituent member would have done on his or her own.     

Arbitration and Bargaining across the Pacific

This paper reports laboratory experiments comparing arbitration behavior between and across two countries with extensive trade relations, the United States and Japan. Besides comparing disputes in both locations, we evaluate disputes between them. While we find nominal differences between the countries, we observe significant changes in both groups' behavior when facing someone from the other country. Specifically, Americans seek larger profits when facing a Japanese counterpart and Japanese subjects settle more frequently with an American counterpart. Our results suggest that the literature on bargaining behavior across cultures paints an incomplete picture of international comparisons by failing to consider bargaining interactions.     

Incorporating the Bühlmann credibility into mortality models to improve forecasting performances

In this paper, we incorporate the Bühlmann credibility into three mortality models (the Lee–Carter model, the Cairns–Blake–Dowd model, and a linear relational model) to improve their forecasting performances, as measured by the MAPE (mean absolute percentage error), using mortality data for the UK. The results show that the MAPE reduction ratios for the three mortality models with the Bühlmann credibility are all significant. More importantly, the MAPEs under the three mortality models with the Bühlmann credibility are very close to each other for each age and forecast year. Thus, by incorporating the Bühlmann credibility we are able to converge the forecasting MAPEs resulting from the three different mortality models to a lower and more consistent level. Moreover, we provide a credibility interpretation with an individual time trend for age x and a group time trend for all ages. Finally, we apply the forecasted mortality rates both with and without the Bühlmann credibility to the net single premiums of life insurance products, and compare the corresponding MAPEs.     

RELATIONSHIPS AMONG FARMERS' GOALS AND FARM ADJUSTMENT STRATEGIES: SOME EMPIRICS OF A MULTIDIMENSIONAL APPROACH

A knowledge of farmers' goals provides an important basis for understanding farmers' preferences for, and choices among, various farm adjustment strategies. Such information is also valuable in estimating the acceptability to farmers of various government measures to assist rural adjustment. The goals of Queensland graziers, with and without a history of farm expansion, are compared. Different adjustment strategies are analysed in terms of the ways in which they satisfy different individual goals. A dimensional analysis of relationships among goals and adjustment strategies reveals that, for those willing to expand but without a history of expansion, income and social goals are at odds with each other. For these graziers, property expansion seemed to be the strategy most likely to meet both these goals. For graziers with a history of expansion, income goals were complementary with social goals.