Environmental adders in the real world

This paper evaluates the use of environmental ‘adders’ as a regulatory instrument. It evaluates their likely performance in meeting the policy objective of social costing given the changes in the electric utility industry's structure and in environmental policy since the efforts to estimate these costs were initiated. The prognosis is largely negative — suggesting that environmental adders are inconsistent with the increased competition already underway in the utility industry, as well as with the trend toward greater use of true market-based approaches to environmental policy that are not subject to detailed economic regulation.     

Income inequality,volatility, and mobility risk in China and the US

A unified index of income inequality, volatility, and mobility risk is presented, and measurements based on US and Chinese panel data calculated. China is found to have higher-income volatility than the US in recent data, so that long-run inequality is comparable in the two countries, and short-run inequality overstates long-run inequality more in China than in the US. In both countries volatility and income inequality are increasing over time.     

Credit History and the FHA–Conventional Choice

Models explaining whether households choose conventional or FHA mortgage financing typically use differential insurance premiums, loan-to-value (LTV) and payment-to-income underwriting standards, and local economic conditions to explain household behavior. Using a large and geographically diverse sample, we expand the standard choice model by including measures of borrower credit history. We find that the ability of a homebuyer to avoid credit problems is an important part of the FHA–conventional choice. In addition, credit scores of FHA borrowers are worse on average than those of conventional borrowers, but as LTV increases credit scores of conventional borrowers deteriorate.     

Information Gathering and Changes in Threat and Opportunity Perceptions*

abstract Managers need to make sense of emerging strategic issues that could significantly impact their businesses. While models of this sensemaking process suggest that information gathering affects interpretations (which affect action and performance), researchers have argued that our understanding of the role of information in changing interpretations is underdeveloped. This paper investigates the role of the time managers spend searching for information and the diversity of the information they find in changing managers’ perceptions that an equivocal, strategic issue represents a threat and opportunity for their businesses. The methodology involves a longitudinal research design in which managers recorded multiple, process‐oriented measures of their information gathering activity. Results suggest that time spent searching for information leads to changes towards seeing the issue as more of a threat, while the diversity of information found leads to changes towards seeing it as less of a threat. We found no effect of information gathering on opportunity perceptions.     

An Exploratory Study of the Effect on Forecast Accuracy of Using Different Geographic Segment Data Sources

The specific research question this study investigates is whether or not model-based earnings forecasts utilizing COMPUSTAT's country specific geographic segment data produce more accurate earnings forecasts than model-based forecasts utilizing data from actual geographic segment footnotes. This study compares the accuracy of earnings forecasts from models using the geographic segment information in actual geographic segment footnotes to the accuracy of earnings forecasts from models using the geographic segment information in the COMPUSTAT business segment tape. Evidence collected in this study indicates that geographic segment data provided in the COMPUSTAT business segment data base appears to make it possible to more accurately predict sales than does the geographic segment data provided in the same companies' actual geographic segment footnote.     

THE BEHAVIOR OF CASINO GAMING REVENUE OVER THE BUSINESS CYCLE CONSIDERING ALTERNATIVE MEASURES OF “INCOME”

Reasons exist for believing that casino gaming revenue does not respond equally to all sources of income over the business cycle. We examine the growth and variability of casino revenue resulting from the growth and variability in different sources of income. We find that casino revenue behaves quite differently in response to short‐run and long‐run variation in each income source, thus revealing that the common use of personal income masks underlying drivers of each state's business cycle. Our results have implications for revenue forecasting models, research on the growth and variability of tax bases in general, and public policy. (JEL H72, H79, L83)     

A Monopolist Would Still Charge More for Windows: A Comment on Werden's Reply

Werden's reply to our comment does nothing to cast doubt on our fundamental conclusion: Microsoft's pricing of Windows is inconsistent with thegovernment's claim that Windows is a monopoly, protected by high entry barriers.     

A longitudinal examination of social capital as a predictor of depression

Depression is the world’s most common mental health disorder and its prevalence is higher among women and the poor. This article seeks to examine the effect that social capital has on mental health, in a longitudinal study. We used data from the Fragile Families and Child Wellbeing Study, which has followed a cohort of families born in large US cities to mostly minority, unmarried parents for over 15 years. Two measures of social capital are constructed, an index of social support and trust, and a measure of social participation. Data from four waves (totalling 8 years) of the study are analyzed in a panel logit model. After controlling for socioeconomic and demographic factors, the measure of social support and trust is found to be a significant predictor of depression, and remains so even after controlling for the effect of social participation. Our measure of social participation, based on attendance at religious services, does not appear to be a significant predictor of depression. Intervention and policy initiatives that increase social capital, particularly social support and trust, may be viable for improving depression among low-income urban, minority women.