Union Decertifications's Impact on Shareholder Wealth

Recent research correlated share price declines in financial markets with union organizing. Investors seemingly anticipate a redistribution of earnings away from shareholder returns toward employee compensation. The markets discount security prices accordingly. But were that the case, union decertification activity should correlate with persistent, abnormally high returns on equity investments. Failure to find returns that are both abnormally high and persistent invites an alternative explanation that is consistent with the data from both studies. This study finds that firms that retained union representation in decertification cases actually outperformed those that ousted the bargaining agent in a partitioned sample comparison.     

DO FEDERAL DEFICITS REALLY MATTER?

This paper reviews competing views regarding interest rates and other economic effects of federal deficits. It discusses the findings of several empirical studies that have analyzed these relationships. The main points ofthe paper are that: (a) the con-cept of the deficit is ambiguous because not all deficits have the same economic effects, and (b) by slightly modifying existing studies, one is able to produce empirical evidence showing that deficits or debt do indeed raise interest rates and otherwise affect economic activity in ways consistent with the conven-tional view.     

Logit Price Dynamics

We model retail price stickiness as the result of costly, error‐prone decision making. Under our assumed cost function for the precision of choice, the timing of price adjustments and the prices firms set are both logit random variables. Errors in the prices firms set help explain micro facts related to the size of price changes, the behavior of adjustment hazards, and the variability of prices and costs. Errors in adjustment timing increase the real effects of monetary shocks, by reducing the “selection effect.” Allowing for both types of errors also helps explain how trend inflation affects price adjustment.     

The People in Your Neighborhood: Social Interactions and Mutual Fund Portfolios

We find that socially connected fund managers have more similar holdings and trades. The overlap of funds whose managers reside in the same neighborhood is considerably higher than that of funds whose managers live in the same city but in different neighborhoods. These effects are larger when managers share a similar ethnic background, and are not explained by preferences. Valuable information is transmitted through these peer networks: a long‐short strategy composed of stocks purchased minus sold by neighboring managers delivers positive risk‐adjusted returns. Unlike prior empirical work, our tests disentangle the effects of social interactions from community effects.     

Public Policy Issues in the Marketing of Seals of Approval for Food

Seals of approval have been part of the competitive environment for decades and, properly used, aid consumers by substituting unbiased professional expertise for consumers' lack of knowledge regarding product claims. This paper analyzes use of seals of approval as fund-raising and competitive devices to determine if seals of approval for food offer the same public good as product endorsements. The authors conclude that seals of approval for food, as exemplified by the American Heart Association's HeartGuide Seal, may not be in the best interests of consumers.     

Intrahousehold Time Allocation: The Case of Grocery Shopping

This paper analyzes the intrahousehold allocation of human resources to grocery shopping in a traditional male-female household. A constrained utility maximization model is developed from which testable hypotheses relating to the choice of a household's grocery shopper are derived. The determinants which influence the choice of a shopper (either male, female, or both) are examined via a qualitative choice model. Results indicate that the choice of a shopper is explicable on economic grounds. Relative costs of shopping in terms of the foregone value of time and the efficiency of a shopper in searching for a lower price were found to be important determinants in the shopper selection process.