The price-to-rent ratio: A macroprudential application

We examine the potential for the price-to-rent ratio to be used as a macroprudential tool. In addition to using standardized appraisal methods, appraisers could estimate the current market rent for a property. The resulting price-to-rent ratio would provide a useful signal for speculative pressures. We show this by estimating price-to-rent ratios using the American Housing Survey. The distribution of price-to-rent ratios shifted up dramatically during the housing boom with the 75th and 95th percentile reaching a historic peak in 2006 at 22 and 44, respectively. We propose a lending policy that incorporates the price-to-rent ratio to generate countercyclical loan-to-value ratios.     

Are we all on the same page? A qualitative study of the facilitation challenges associated with the implementation of deliberative priority-setting

Collaborative governance has given rise to decision-making methodologies promoting democracy, inclusivity and transparency. This is exemplified by deliberative priority-setting (DPS) that blends cost-effectiveness analysis with stakeholder deliberation. Little is known however, about the facilitation challenges when ‘technical’ and ‘social’ elements are combined in a methodology. This paper investigates the facilitation challenges of implementing a DPS project within the English National Health Service (NHS). Our study examines the relationship between facilitation and the effectiveness of DPS processes, highlighting the importance of knowledge management as facilitators seek to translate technical information, to enhance the deliberative experience and promote legitimate decisions.     

Side by Side We Battle Onward? Representing Workers in Contemporary America

As collective bargaining in the United States declines, diverse forms of worker representation are proliferating. Strategic dilemmas of representation are central to the diverse organizations and coalitions representing disparate aspects of workers' interests. Unions continue to bargain collectively, while forming alliances with other groups and providing an array of services to members. Other organizations and loose associations represent specific aspects of workers' interests and advocate on their behalf while stopping short of collective bargaining. This article compares the scope, objectives and methods of worker representation by unions and non‐bargaining actors. It argues that the key dilemmas of which workers to represent, over what issues and through which organizational forms, apply both to unions and to non‐bargaining actors, such as community organizations, and advocacy groups, which represent select interests of particular workers. These non‐bargaining actors are key strategic allies for unions. While these organizations do not take on collective bargaining, they are sometimes better positioned to represent other key needs and interests of workers. The legal‐political and mutual insurance needs of workers are sometimes well met by these emergent groups. However, these organizations do not, and cannot, provide the advantages of traditional collective bargaining.     

The Impact of Institutional Ownership on the Reinsurance Decision

Risk management has a central role in corporate America. Insurance companies frequently manage risk by purchasing reinsurance because it reduces the downside risk (i.e., bankruptcy risk) of an insurer. Because reinsurance is costly, Mayers and Smith (1990, Journal of Business , 63: 19-40) argue that reinsurance purchases should be negatively associated with the diversification of the owners' portfolios. Further, institutional owners play a significant role in equity markets yet we know little about their effect on firm behavior. The purpose of this study is to examine empirically the influence of institutional ownership on reinsurance for a sample of widely held property-liability insurers. We hypothesize that insurers with higher levels of institutional ownership purchase less reinsurance. Using a sample of 45 publicly traded property-liability insurers from 1995 to 1997, we demonstrate that the utilization of reinsurance decreases as the level of institutional ownership increases. This suggests that the diversification of the owners' portfolios is a determinant of the insurers' reinsurance decisions.     

Defeating feature fatigue

Consider a coffeemaker that offers 12 drink options, a car with more than 700 features on the dashboard, and a mouse pad that's also a clock, calculator, and FM radio. All are examples of "feature bloat", or "featuritis", the result of an almost irresistible temptation to load products with lots of bells and whistles. The problem is that the more features a product boasts, the harder it is to use. Manufacturers that increase a product's capability--the number of useful functions it can perform--at the expense of its usability are exposing their customers to feature fatigue. The authors have conducted three studies to gain a better understanding of how consumers weigh a product's capability relative to its usability. They found that even though consumers know that products with more features are harder to use, they initially choose high-feature models. They also pile on more features when given the chance to customize a product for their needs. Once consumers have actually worked with a product, however, usability starts to matter more to them than capability. For managers in consumer products companies, these findings present a dilemma: Should they maximize initial sales by designing high-feature models, which consumers consistently choose, or should they limit the number of features in order to enhance the lifetime value of their customers? The authors' analytical model guides companies toward a happy middle ground: maximizing the net present value of the typical customer's profit stream. The authors also advise companies to build simpler products, help consumers learn which products suit their needs, develop products that do one thing very well, and design market research in which consumers use actual products or prototypes.     

‘Good’ case research in industrial marketing: Insights from research practice

The purpose of this article is to contribute to the emerging debate about the use of the case methodology in industrial marketing. We conducted a content analysis of the 145 case studies published in three key journals (Industrial Marketing Management, Journal of Business-to-Business Marketing and Journal of Business and Industrial Marketing) over a 10-year period (1997-2006). The findings highlight the dominance of case research in qualitative industrial marketing research. They also lead us to distinguish between three different practices that influence perceptions of ‘good’ case research in this scholarly domain: ‘common’ practice, ‘best practice’ and ‘innovative’ practice. Our contribution lies in problematising what ‘good’ case research is, and showing how research practice - not just methodological literature - has a role in generating methodological conventions in a disciplinary field.     

HOW DOES SKILLS MISMATCH AFFECT REMITTANCES? A STUDY OF FILIPINO MIGRANT WORKERS

In this article, unit record data on Filipino migrants are used to analyze the issue of skills mismatch, its prevalence, and its impact on remittances sent back home. Results obtained using instrumental variable techniques reveal that significant proportions of highly educated Filipino workers are employed in low‐skilled jobs overseas, with systematic variation by gender and by country of work. We find that skills mismatch impacts significantly on the migrant's remittance behavior, with effects that are differentiated between genders. Specifically, where there is mismatch in the migrant's educational attainment and the migrant's job requirement, we find significant reductions in remittances for men but not for women. (JEL J240, J610, O150)     

Ambiguous workarounds in policy piloting in the NHS: Tensions,trade‐offs and legacies of organisational change projects

Pilot projects are increasingly used as a mechanism to enact organisational change, particularly government policy. Information technology's centrality to organisations often makes it key to the introduction of new processes. However, it can give rise to workarounds as employees circumvent impediments it presents by rejecting its prescribed use. Workarounds tend to be conceptualised dichotomously, as either ‘good’ problem solving, or ‘bad’ subversion of the technology. In pilot projects, workarounds are more ambiguous because those that support projects' successful completion in the short‐term may undermine day to day operations longer term. We draw on interview data from a policy pilot in general practice in the National Health Service in England aimed at extending access to care. We problematise the dichotomous conceptualisation of workarounds, finding they can be simultaneously supportive and undermining of policy pilots. Workarounds thereby become political, as employees are required to trade‐off consequences for themselves and the wider organisation.     

Evidence on the effects of bank competition on firm borrowing and investment

This paper presents evidence on the financial and real effects of bank competition using a large panel of privately held firms. I trace the firm-level impact of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, which increased the competitiveness of U.S. banking markets. Following the deregulation, newly formed firms used significantly less external debt, were smaller, and realized higher returns on assets, consistent with their investing less due to greater financial constraints. These effects diminish as firms age, ultimately reversing sign. The differential impact that banking market reforms may have on newer and more established firms is underscored.     

Estimating Costs of Children from Micro-Unit Records: A New Procedure Applied to Australian Data

Measuring the costs of children is of immense practical importance in a range of economic and social policy areas. In this paper, we introduce a new econometric procedure that improves on existing methods for obtaining estimates of such costs from a demand system. We develop, using an extended linear expenditure system, an iterative maximum likelihood estimator that overcomes possible estimation problems that arise from the 2-step estimation procedures employed by earlier authors. We also allow for a more general assumption about the equation “errors”, that of non-zero correlation between the errors for different commodities in the same household. Another important contribution is the development of an estimation procedure for sets of seemingly unrelated regressions where the different sets of equations are linked by some common parameters. The proposed procedure is applied to the 1988–89 and 1993–94 Australian Household Expenditure Surveys and results obtained update estimates of both the commodity-specific and general scales previously obtained for Australia.