An analysis of the behavior of mature black-owned commercial banks

Accounting and statistical techniques are used to compare the behavior of a sample of mature black-owned banks with that of a matched set of nonminority-owned banks. The black banks are generally less profitable. The major reasons for this lower profitability include more liquid asset portfolios at the black banks, higher operating costs on liabilities, and higher rates of loan loss. Higher loan loss rates appear to be the single most important factor, with losses on real estate and possibly commercial and industrial loans probably being the most serious continuing sources of loan losses.     

Reducing the Incidence of Low Birth Weight in Low-Income Countries Has Substantial Economic Benefits

Reducing the incidence of low birth weight not only lowers infantmortality rates but also has multiple benefits over the lifecycle. This study estimates the economic benefits of reducingthe incidence of low birth weight in low-income countries, boththrough lower mortality rates and medical costs and throughincreased learning and productivity. The estimated economicbenefits, under plausible assumptions, are fairly substantial,at about $510 per infant moved from a low-birth-weight status.The estimated gains are primarily from increases in labor productivity(partially through more education) and secondarily from avoidingcosts due to infant illness and death. Thus there may be manyinterventions to reduce the incidence of low birth weight thatare warranted purely on the grounds of saving resources or increasingproductivity.      

Investment and concern for relative position

Economists typically analyze individuals' market behavior in isolation from their nonmarket decisions. While this research strategy has generally been successful, it can lead to systematic errors when agents' nonmarket behavior affects their market choices. In this paper we analyze how individuals' investment behavior changes as a result of nonmarket behavior. Specifically, we analyze a model in which individuals must decide how to allocate their initial endowment between two random investments, where the returns are perfectly correlated across individuals for the first investment but independent across individuals for the second. We consider an environment in which men and women match, with wealthier individuals more successful in matching. We show how individuals' concern about relative wealth can affect their investment decisions, and we provide conditions under which individuals bias their investments either toward or away from the investment with correlated returns. A modification of the model is used to explain why agents' investments might exhibit a home country bias.     

Corporate ethics: Who cares?

This article will focus on the ethical problems faced by America's multinational enterprises, especially on the issues created by the recent discovery and publication of the extent to which bribes and payoffs, “facilitating payments,” are part of doing business abroad. The author examines the ethical aspect of corporate corruption. A brief review of some of the more modern concepts of ethics will note the increasing rift between religion and the moral base of society in present thinking. The article points out some of the reasons for payoffs, cites specific examples of multinational graft, looks at the question of whether or not it is fair to impose U.S. business standards and ethics on other nations and states the other side of the issue: maybe there is nothing wrong with “facilitating payments” when they are part of a socially, legally, and politically accepted way of getting things done. The author agratefully acknowledges a grant from the Ellis Phillips Foundation. The author wishes to dedicate this article to Professor Charles W Garrett (d. 1977) and also to thank Professors Berleant, Garett, Jarolem, and Walther, all of C.W. Post Center, L.I.U., for providing the stimulating and provocative dialogue that served as the catalyst for this assay.     

Buying a house and the decision to use a real estate broker

This study examines the factors that affect the decision by home buyers to use real estate brokers and the subsequent effect this decision has on home prices. Buyers with high opportunity costs and the least amount of information about local market conditions are the most likely to use brokers; a finding consistent with the role of the real estate broker as a market intermediary. Not surprisingly, these were some of the same factors that also have a positive impact on selling price. An important finding of this study is that when selection bias is adequately controlled, the real estate broker has no appreciable, independent impact on selling price. This, in turn, suggests a nonsegmented, highly competitive housing market.     

The impact of race and other variables on the composition and value of individual portfolios

Summary and Conclusions This study indicates that socio-economic variables play an important role in the determination of portfolio allocation and the value of assets in the portfolio. However, it should be noted that these factors are not sole determinants. Relevant variables, such as expectations and attitudes, have not been considered here, although where other variables have been studied, no definitive results were stated.15 Importantly, race is a significant determinant of portfolio diversity but not of the value of assets in the portfolio. Therefore, it does make a difference in portfolio composition whether an individual is black or white, but if the individual maintains a diversified portfolio, race becomes immaterial.