SYMMETRIC VERSUS ASYMMETRIC CONDITIONAL COVARIANCE FORECASTS: DOES IT PAY TO SWITCH?

Volatilities and correlations for equity markets rise more after negative returns shocks than after positive shocks. Allowing for these asymmetries in covariance forecasts decreases mean‐variance portfolio risk and improves investor welfare. We compute optimal weights for international equity portfolios using predictions from asymmetric covariance forecasting models and a spectrum of expected returns. Investors who are moderately risk averse, have longer rebalancing horizons, and hold U.S. equities benefit most and may be willing to pay around 100 basis points annually to switch from symmetric to asymmetric forecasts. Accounting for asymmetry in both variances and correlations significantly lowers realized portfolio risk.     

Return on investment: benefits and challenges of baccalaureate nurse residency program

There are high rates of turnover among graduate nurses within the first year of employment. As the costs of recruitment and orientation have increased, employers are examining new strategies for increasing retention among this population. The Methodist Hospital, Houston, TX, partnered with an academic institution and University Health Consortium to apply an implementation strategy where graduate nurses participate in a year-long residency program. The residents attended monthly sessions that addressed pertinent needs of the group. During this 1-year period turnover decreased from 50% to 13% and return on investment was 326.5%.     

Using scenarios to explore UK upland futures

Uplands around the world are facing significant social, economic and environmental changes, and decision-makers need to better understand what the future may hold if they are to adapt and maintain upland goods and services. This paper draws together all major research comprising eight studies that have used scenarios to describe possible futures for UK uplands. The paper evaluates which scenarios are perceived by stakeholders to be most likely and desirable, and assesses the benefits and drawbacks of the scenario methods used in UK uplands to date. Stakeholders agreed that the most desirable and likely scenario would be a continuation of hill farming (albeit at reduced levels) based on cross-compliance with environmental measures. The least desirable scenario is a withdrawal of government financial support for hill farming. Although this was deemed by stakeholders to be the least likely scenario, the loss of government support warrants close attention due to its potential implications for the local economy. Stakeholders noted that the environmental implications of this scenario are much less clear-cut. As such, there is an urgent need to understand the full implications of this scenario, so that upland stakeholders can adequately prepare, and policy-makers can better evaluate the likely implications of different policy options. The paper concludes that in future, upland scenario research needs to: (1) better integrate in-depth and representative participation from stakeholders during both scenario development and evaluation; and (2) make more effective use of visualisation techniques and simulation models.     

Trade in Educational Services: Trends and Emerging Issues

This paper examines the trends and emerging issues in trade in educational services. It provides rough estimates of the size of the international market in educational services drawing on the limited data available in services trade statistics and data on foreign students in tertiary education in OECD countries. It outlines the current commitments for trade in educational services under the General Agreement on Trade in Services (GATS). It also reviews the implications of the on‐going GATS negotiations for further multilateral trade liberalisation in this sector. It points out that OECD countries have been noticeably reluctant to make proposals for further liberalisation of trade in educational services. One reason for this is the concern in many countries about the potential threats posed to cultural values and national traditions by growing trade liberalisation in educational services. Finally, the paper reviews some of the main policy issues arising from trade in educational services.     

Implicit returns on conventional demand deposits: An empirical comparison

This paper compares the relative performance of alternative series of implicit returns on conventional demand deposits by estimating for each series a set of equations derived from a generalized CES utility model for a liquid asset portfolio. This approach offers the unique advantage of explaining money holdings with a substantially larger number of degrees of freedom than originally available, while avoiding multicollinearity even in the presence of several interest rate variables in the model. An implicit return series obtained by Barro and Santomero (1972) performs the best among all of the available seven series tested based on the criteria of a generalized measure of goodness-of-fit and a robustness of coefficient estimates.     

Stable cointegrating regressions: Fully-modified estimates for inflation and employment cost indices

This paper investigates the stability of relationships between inflation and changes in employer cost for labor using tests based on the null hypothesis of no cointegration (Gregory and Hansen (1996a)) as well as tests based on the null hypothesis of cointegration (Hansen (1992)). In addition to specifications which include wages or unit labor cost, employment cost indices for compensation and wages are used to eliminate composition bias over the business cycle. Empirical results support stability and fully-modified estimates are obtained using the semiparametric approach of Phillips (1995). In contrast to studies which have found only one-way causality, this paper presents empirical evidence of feedback between inflation and employer cost for labor, consistent with an expectations-adjusted Phillips's Curve. First version received: July 1997/final version received: September 1998     

The Effects of Individual and School Factors on University Students' Academic Performance

This article examines the factors that influence university students'academic performance, focusing on the role of student background and school factors. Using data on the first‐year students at the University of Western Australia in 2001, two methodologies are employed. The first is analogous to an input‐output approach, and the second is a random coefficients model. A key finding is that high schools have an impact on the academic performance of students at university beyond students' own background characteristics. Both immersion and reinforcement effects are identified.