A double-hurdle model of cigarette consumption

This paper shows the importance of the double-hurdle approach for modelling individuals' cigarette consumption, using data from the UK General Household Survey, and argues that participation and consumption should be treated as separate individual choices. The likelihood function for the full double-hurdle is derived, and it is shown how restrictions on the stochastic specification of the model and auxillary information, which identifies ex-smokers, allow it to be decomposed. The empirical results highlight the value of the sample separation information and the need to model starting and quitting as separate decisions.     

The real question about China: Why was the Song economic achievement not repeated?

The pertinent question about China’s economic performance from the thirteenth to nineteenth centuries is less why she did not have a European–style industrial revolution than why even her own Song dynasty achievement was not repeated. Supposed explanations which appear in the literature are discussed: no scientific revolution; technological regression; population pressure; Confucian values; and the institutions within the Ming–Qing state. It is suggested that while the substitutes for direct economic policy and independent law were sufficient to permit the economy to expand, they restricted the market enough to prevent a return to previous levels of activity.     

Empirical anomalies based on unexpected earnings and the importance of risk adjustments

The purpose of this paper is to reexamine Reinganum's study which indicates that abnormal returns could not be earned unexpected quarterly earnings information, and to document precisely the response of stock prices to earnings announcements. This study, using a very large sample of stocks and daily returns, represents the most complete and detailed analysis of quarterly earnings reports that has been performed to date. Our results are contrary to those of Reinganum and show that abnormal returns could have been earned almost any time during the 1970's. Our analysis also indicates that risk adjustments matter little in this type of work. Finally, we find that roughly 50% of the adjustment of stock returns to unexpected quarterly earnings occurs over a 90-day period after the earnings are announced.