Home-field advantage or a matter of ambiguity aversion? Local bias among German individual investors

This paper investigates whether familiarity induced by ambiguity aversion can help explaining the local bias phenomenon among individual investors. Using geographic closeness as a proxy for investor familiarity, we find that investors pull out of (unfamiliar) remote stocks and pour into (familiar) local stocks during times of increased market uncertainty. Moreover, the magnitude of this ‘flight to familiarity’ increases in the spread of an investor's ambiguity (about expected returns) between local and remote stocks. Our results prove robust to a number of alternative explanations of local bias. Specifically, we rule out a ‘home-field advantage’, where investors are able to translate information advantages about nearby companies into excess returns on their local stockholdings. We conclude that individual investors’ local bias is induced by ambiguity aversion in the portfolio selection process rather than a trading strategy based on superior information about local companies.     

Wheat variety yield data: Do commercial and public performance tests provide the same information?

Wheat yields from reported performance test results are of economic importance to wheat producers, since their profits depend on selecting the optimal variety for their location. However, our data shows differences in absolute and relative wheat yields between commercial and public wheat breeding program's performance test data in Kansas. Newly available data are used to test if the difference in yields arose from potential selectivity bias, and to determine the contribution of private and public wheat breeding programs to varietal yield improvement during 2007–2012. Both Heckman selection models and multiple regression showed no statistical evidence of the potential presence of selectivity bias rather, managerial practices, agronomic conditions, field location, and inherent genetic traits of the seed variety were identify as the source of yield differences.     

HEDONIC PRICE INDEXES FOR RESIDENTIAL HOUSING: A SURVEY,EVALUATION AND TAXONOMY

Every house is different. It is important that house price indexes take account of these quality differences. Hedonic methods which express house prices as a function of a vector of characteristics (such as number of bedrooms and bathrooms, land area and location) are particularly useful for this purpose. I consider here some developments in the hedonic methodology, as it is applied in a housing context, that have occurred in the last three decades. A number of hedonic house price indexes are now available. However, it is often difficult to see how these indexes relate to each other. For this reason I attempt to impose some structure on the literature by developing a taxonomy of hedonic indexes, and then show how existing indexes fit into this taxonomy. Also discussed are some promising areas for future research in the hedonic field. In particular, greater use needs to be made of spatial econometric and nonparametric methods to exploit the increased availability of geospatial data. The main criticisms of the hedonic approach are evaluated and compared with those of the repeat‐sales and stratified median methods. The overall conclusion is that the advantages of the hedonic approach outweigh its disadvantages.     

ARE ALL ECONOMIC FACTS GREATLY EXAGGERATED? THEORY COMPETITION AND SELECTIVITY

Abstract ..There is growing concern and mounting evidence of selectivity in empirical economics. Most empirical economic literatures have a truncated distribution of results. The aim of this paper is to explore the link between publication selectivity and theory contests. This link is confirmed through the analysis of 87 distinct empirical economics literatures, involving more than three and a half thousand separate empirical studies, using objective measures of both selectivity and contests. Our meta–meta‐analysis shows that publication selection is widespread, but not universal. It distorts scientific inference with potentially adverse effects on policy making, but competition and debate between rival theories reduces this selectivity and thereby improves economic inference.     

Least squares, preliminary test and Stein-type estimation in general vector AR(p) models

In the general vector autoregressive process AR ( p ), multivariate least square estimation (LSE)/maximum likelihood estimation (MLE) of a subset of the parameters is considered when the complementary subset is suspected to be redundant. This may be viewed as a special case of linear constraints of autoregressive parameters. We incorporate this nonsample information in the estimation process and propose preliminary test and Stein-type estimators for the target subset of parameters. Under local alternatives their asymptotic properties are investigated and compared with those of unrestricted and restricted LSE. The dominance picture of the estimators is presented.     

Statistics by Gender: Measures to Reduce Gender Bias in Agricultural Surveys

Statistics by gender has been the concern of policy makers in the recent past years. The demand on data disaggregated by gender has led the survey statistician to collect data and tabulate statistics by gender. In this paper, some measures will be suggested to avoid and reduce gender bias for data collection and tabulation in agricultural surveys.     

Political Macroeconomics: A Survey of Recent Developments

The paper surveys political macroeconomics, covering its development from Rogoff's conservative central banker to the most recent discussions of monetary policy and institutional design. Topics include the inflation-stabilization trade-off, central bank independence with escape clauses and overruling with costs, inflation targets, performance contracts for monetary authorities, and the consequences of output persistence for these issues. Further topics are the political business cycle when output is persistent, the political macroeconomics of fiscal policy, the government spending bias, and the game-theoretic interaction between fiscal and monetary policy. All work is discussed within a coherent analytical framework.     

Return to education in Finland

This study presents estimates of the return to education in Finland using an individual-level data set that also includes ability measures and information on family background. It is found that ability test scores have a strong effect on the choice of education and on subsequent earnings. Estimating the return to education with no information on ability leads to an upward bias in the estimates. However, this bias is more than offset by a downward bias caused by endogeneity or measurement error. Instrumental variables estimates that utilize family background variables as instruments produce estimates of the return to schooling that are approximately 60% higher than the least squares estimates.     

Social Desirability Bias in Survey Research on Sustainable Development in Small Firms: an Exploratory Analysis of Survey Mode Effect

Survey methodology has become an increasingly popular weapon of choice in conducting research on the topic of environmental sustainability in the small firm context. However, conventional application of survey research in many empirical studies tends to ignore the inherent issues associated with the mode of administration of survey questionnaires. One of these issues is social desirability bias (SDB) arising from survey modes such as face to face, the assisted type of survey questionnaire administration and mailed or purely self‐administered survey. This study is an analysis of survey data generated by two modes: purely self‐administered and survey enumerator assisted. The paper argues that the presence of an enumerator in the workplace or actual site of the business to administer the survey will motivate the respondents to provide more accurate information about the firms' environmental sustainability knowledge and practices. The article offers suggestions to address SDB in carrying out surveys about environmental sustainability in small firms. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.     

Analysis of household attitudes toward the purchase of livestock products and fish in Cameroon

The need for additional information on household demand for meat and fish in Cameroon is addressed. Probit analysis involving the Heckman selectivity correction procedure is used to estimate the effects of individual and household characteristics on demand for beef, chicken, pork and fish. Results indicate that fish is a relative necessity in Cameroon and is often substituted for beef and chicken by households whose profiles include being of low income levels, having large household sizes, are of middle age and are less educated. Whereas chicken and pork substitute each other, they are each complementary to beef. The profiles of households likely to purchase beef include being married, middle age, educated and of the Muslim faith. Profiles for households most likely to increase their purchases of chicken include being of high income levels and are public sector employed. Some policy implications are provided.