Results on the bias and inconsistency of ordinary least squares for the linear probability model

This note formalizes bias and inconsistency results for ordinary least squares (OLS) on the linear probability model and provides sufficient conditions for unbiasedness and consistency to hold. The conditions suggest that a “trimming estimator” may reduce OLS bias.     

Deterring nuclear weapons proliferation

In the wake of the dissolution of the Soviet Union and the end of the Cold War, the problem of nuclear proliferation has become one of the primary issues of strategic concern The proliferation problem is an old one, but the problem today is very different from that of even a few years ago. calling for new approaches. By considering demand and supply factors, the old approaches that rely on limits on the technology or supply appear inadequate in the current situation Rather, the best approaches today are those that influence demand, making it less attractive for nations to develop nuclear weapons. The constraints on the United States that inhibit it from using its nuclear weapons to threaten new nuclear states make both nuclear deterrence and guarantees to countries not acquiring such weapons ineffectual in preventing further proliferation. The use of conventional forces to prevent proliferation or to protect threatened nations may also be politically difficult unless there are clear national interests at stake.
A possible way out of this dilemma is to develop a system of conventional deterrence using precision guided munitions and other recent technological developments that have increased the accuracy of weapons delivery systems. Such a system of conventional deterrence could play an important role in making nuclear weapons of less perceived value to potentially proliferating nations and in protecting regions that these nations threaten.     

Energy and habitat: Designing a sustainable urban ecosystem

As the world's cities grow so new ways of satisfying their demands for food and fuel resources will have to be found, especially in the third world where total fuel demands are expected to expand several fold in one generation. An ecological model for a future complex urban community is presented to illustrate the place of energy in a growing system and how habitat—the physical component—possesses life cycles interdependent with living species. Recycling, biomass fuels, telecommunications, marine living and the propagation of viable organizations are all elements that will enable the globe to sustain future expanding metropolises.     

Removal and storage of ash of thermal power stations,variants and prospects of development

Translated from Gidrotekhnicheskoe Stroitel'stvo, No. 11, pp. 24–28, November, 1994.     

Intermarket efficiency: An application of interbattery APT to mortgage-backed securities

Increasing popularity of investments in mortgage-backed securities has led to closer integration of the mortgage market into traditional capital markets. Using monthly returns during 1982–1988 for common stocks, Treasury bonds and GNMA and FHLMC mortgage-backed securities, the interbattery factor analytic Arbitrage Pricing Theory of (Cho, 1984) is used to test five hypotheses for intramarket and intermarket integration. Results indicate that three to five common factors are found within the same security market, while only one to three factors are found common between different markets.The APT could not be rejected within the same security market, but was rejected in most intermarket comparisons. While risk-free rates are found to differ between markets, the risk premium tests are conclusive indicators of integration. Our results support claims that the stock, bond, and the mortgage-backed securities markets are integrated.     

VOLUNTARY DISCLOSURE OF SEGMENT INFORMATION: FURTHER AUSTRALIAN EVIDENCE

This study provides further empirical evidence on incentives for Australian firms to voluntarily report segment information. Various economic reasons why firms may elect to present segment information have been hypothesised in previous research. Bradbury [1992] and McKinnon and Dalimunthe [1993] found firm size, minority interest and industry membership as significant identifiable characteristics motivating voluntary segmental disclosure. Variables found to be insignificant in Bradbury [1992] which were not examined by McKinnon and Dalimunthe [1993] are tested in this paper. Hypotheses relating to size, financial leverage, assets-in-place, earnings volatility, ownership diffusion, outside equity (minority) interest, overseas association as well as diverse and mining and oil classification hypotheses are empirically examined. Univariate tests and multivariate logit analysis suggest that for a extensive sample of diversified firms, voluntary segment disclosure is significantly related to size, leverage and involvement in mining or oil activities.     

Entry and product quality under price regulation

Spence (1975, footnote 5, p. 420) has shown that, in equilibrium, a price-regulated monopoly will supply a socially suboptimal level of quality. This tendency to undersupply quality has been used to justify an expansion of regulatory controls to the quality dimension in certain regulated industries (e.g., electricity and telecommunications). In this paper, we examine the effects of entry on equilibrium product quality in an industry which is price-regulated. A generalized conjectural variation model is used which allows both monopolistic and oligopolistic market structures. Using this model, we find that regulation generally leads to a socially nonoptimal (either too high or too low) level of quality, where the direction of the resulting departure from optimal quality depends upon the conjectures that firms form. Spence's result is obtained as a special case. We then demonstrate that a policy that encourages (or, at least, does not discourage) entry into the regulated market will cause equilibrium quality to move in a social-welfare-improving direction, regardless of the direction of the original distortion.     

The quantity theory of money and its long-run implications

This paper examines three propositions implied by the quantity theory of money, namely, the neutrality hypothesis, the Fisher hypothesis and the monetary approach to exchange rate determination for six developed countries within a dynamic framework, which incorporates the long-run proposition as its steady-state solution while allowing for short-run deviation from the hypothesized long-run relationships to take place. The joint hypothesis that all three propositions are satisfied simultaneously is supported only for two countries.     

AN EMPIRICAL INVESTIGATION OF STOCK DIVIDENDS-IN-KIND

We investigate share price reactions to announcements of dividends payable in the common stock of corporations different from the issuing firm. We find that firms that declare these dividends (typically investment companies) experience positive abnormal returns upon announcement. We also find that such dividends are more likely to be declared when the shares to be distributed have peaked in value. Consistent with this finding, we document negative announcement-period abnormal returns for firms having their shares distributed. Additional tests reveal that prices respond more negatively when the information signal is strongest, when outside ownership is more dispersed, and when management is more entrenched.