Smoothing Income against Crop Flood Losses in Amazonia: Rain Forest or Rivers as a Safety Net?

This article examines the role of ex post labor supply in smoothing income in response to crop losses caused by large floods among riverine households in the Peruvian Amazon, where rich environmental endowments permit a variety of resource extractive activities and coping responses. The paper finds that households respond to crop losses primarily by intensifying fishing effort, not by relying on gathering of nontimber forest products, hunting, or asset liquidation. This ex post labor adjustment helps to smooth total income against small crop losses but less well against large crop losses. Both relatively nonpoor households with better fishing capital and poor young households with a physical labor advantage employ this natural insurance in rivers.     

A COMPREHENSIVE EXAMINATION OF VOLUME EFFECTS AND SEASONALITY IN DAILY SECURITY RETURNS

In this study, an integrated model of return seasonality is developed and the hypothesis that seasonality is associated with changes in relative trading volume is examined. Return regularities associated with the turn of the month, the week of the month, and holiday closings are documented. Beyond these effects, neither the turn of the year nor the January effect is significant for large firms. Relative volume is shown to display calendar regularities similar to those in returns, and tests indicate a causal relationship flowing from volume to returns.     

Preliminary Evaluation of the HECM Reverse Mortgage Program

This paper describes and evaluates the Home Equity Conversion Mortgage (HECM) insurance demonstration, designed to encourage the development of private reverse mortgage programs by insuring lenders against the risks associated with new mortgage lending programs and with reverse mortgages in particular. The paper evaluates demand for the program by analyzing the attributes of participating borrowers, their properties and the types of payment options chosen. It also presents several observations regarding participation by the financial community in the HECM demonstration, required counseling and legal and regulatory issues that may hamper the growth and development of reverse mortgage programs in general.
The findings suggest strong demand for reverse mortgages among "house-rich, cash-poor" elderly homeowners, either to supplement inadequate current incomes or to provide a reserve against unexpected lump-sum expenses. The flexible design of the HECM program addresses a wide variety of borrower financial needs, even though it imposes higher costs on lenders and servicers. The continued growth of the program, however, is hindered by a shortage of qualified housing counselors in some areas, as well as by a variety of legal and regulatory barriers.     

The effects of a relative value reimbursement scheme on the medical market: Lessons from medicaid

One question which has been the subject of debate, without resolution, in the health economics literature is whether physicians face distorted incentives. This paper examines the possible effects of an attempt to correct the incentives facing physician firms: namely the use of a relative valued fee schedule. Though a type of relative value scale is currently under implementation for the Medicare system, little is known about the effects of such mechanisms. This paper attempts to glean information from natural experiments by several state Medicaid programs that have used relative value scales in the past.The author would like to express his appreciation to Karen Smith Conway, Thomas Hoerger, and Torsten Schmidt for their helpful comments and suggestions. Valuable research assistance was provided by Sharon Kunz. All remaining errors are, of course, the sole responsibility of the author.     

The effect of tax-motivated income shifting on information asymmetry

We examine whether tax-motivated income shifting by U.S. multinational corporations affects information asymmetry. Using a new firm-year measure of income shifting and a two-stage least squares approach, we find income shifting is positively associated with four measures of information asymmetry. Cross-sectional tests reveal that this effect is more pronounced for firms with large differences between foreign and domestic earnings growth. Using SFAS 131 to improve identification and establish evidence consistent with a causal relation between income shifting and information asymmetry, we demonstrate that the adverse impact of income shifting on information asymmetry is concentrated in firms that discontinue geographic earnings disclosures. Overall, our study provides evidence that significant consequences of information asymmetry are associated with tax-motivated income shifting.     

Analyst Behavior Following IPOs: The "Bubble Period" Evidence

We examine over 7400 analyst recommendations made in the yearafter going public for IPOs from 1999 to 2000. Initiations ofcoverage at the end of the quiet period come almost exclusivelyfrom affiliated analysts, whereas initiations afterward arepredominantly from unaffiliated analysts. Contrary to previousfindings, we find no evidence that the market discounts recommendationsfrom affiliated analysts once we control for recommendationcharacteristics and timing. Moreover, analyst coverage in thefirst year is not affected by underpricing, and after the flurryof initiations at the end of the quiet period, the number ofanalysts covering a firm during the following 11 months is unrelatedto the number of managing underwriters. (JEL G12, G14, G24)     

The effect of corporate governance on credit ratings: Evidence from China's bond market

This paper examines the association between firms’ corporate governance and credit ratings (both bond ratings and issuer ratings) in China. In addition to considering the financial attributes of bond issuers, we ask to what extent do credit rating agencies consider the corporate governance attributes of issuers? In concept, bondholders are concerned with the financial effects of how corporate governance resolves the agency conflicts between bondholders and managers, majority and minority shareholders, and shareholders and bondholders. We find that corporate governance affects bond issuer credit ratings in China. After controlling for firms’ financial attributes, we find that issuer ratings are positively related to dual‐listing, whether the firm is a state‐owned enterprise, the ownership of the second to the tenth largest shareholder; and negatively related to the relative scale of audit fees. We attribute the positive association between dual‐listing and credit rating to higher quality and transparency of information reported by the dual‐listed firm. The value to bondholders of the implicit government guarantee of debt payments more than offsets the negative association between firm value and being an SOE. Bond rating agencies expect that the change in agency costs with a reduction in the ownership of the largest shareholder benefits bondholders. To credit rating agencies, the scale of audit fees (relative to total assets of the accounting firm) signals interest binding between the client firm and the accounting firm that threatens the independence of auditing and the quality of financial reporting. We also find that bond‐specific attributes: collateral and issue size, are positively related to bond credit ratings.