Some economics of content protection

We are grateful to a perceptive referee for many constructive comments on an earlier version of this paper entitled The Economics of Content Protection: A Dual Approach. The usual disclaimer applies.     

The Trade Consequences of Maritime Insecurity: Evidence from Somali Piracy

In the past decade (2000–2010), pirates from Somalia have carried out thousands of attacks on cargo ships sailing through the Gulf of Aden and the Indian Ocean, causing what others have identified as significant damage to maritime trade. In this paper, we use variations in the spread and intensity of Somali piracy to estimate its effect on the volume of international trade. By comparing trade volume changes along shipping routes located in pirate waters to those that are not, we estimate that Somali piracy reduced bulk commodities trade passing through the Gulf of Aden by 4.1% per year from 2000 to 2010. We find smaller reductions in total trade, consistent with the fact that not all goods are shipped by sea or are targets of pirate attacks. While our estimates suggest that the trade costs of piracy are much lower than what has been suggested in the existing literature, we find that they remain significant and unevenly distributed, with five countries and the EU shouldering 70% of the total costs.     

The dynamics of food insecurity and overall health: evidence from the Canadian National Population Health Survey

The paper explores whether the responses to household food insecurity questions in cycles two and three of the Canadian National Population Health Survey help explain the links between socioeconomic status and health at the individual level. Short-term transitions in food insecurity status are correlated with changes in health status. There is some evidence for females but not for males that conditional on current health, current household food insecurity can lead to lower future health status, even in the short run. There is stronger evidence for both males and females that conditional on current household food insecurity status, lower current health status can lead to an increased probability of future household food insecurity.     

The Dynamics of African-American Health: A Historical Perspective

There are many misconceptions about African American health that have subtle and continuing influence on health policy debates. Unfortunately, many of the misconceptions surrounding African American health have an implicit historical dimension, and the usual response for the lack of evidence in support of any myth is that “the data does not exist” to shed full light on the given question. This is unfortunate as there is now a growing body of evidence pertaining to the historical health of the African American population, and this data is currently being used to uncover a number of facts about the historical dynamics of African American health. In this paper, we show that our historical data on the health of African Americans is wholly lacking and at the same time show that one prominent myth about trends in African American health does not stand up to historical investigation. We conclude with a brief note about where this research is headed and what future topics should be explored in African American economic and health history.     

Re-examining the Influence of Individual Values on Ethical Decision Making

This paper presents the results of five years of research involving three studies. The first two studies investigated the impact of the value honesty/integrity on the ethical decision choice an individual makes, as moderated by the individual personality traits of self-monitoring and private self-consciousness. The third study, which is the focus of this paper, expanded the two earlier studies by varying the level of moral intensity and including the influence of demographical factors and other workplace values: achievement, fairness, and concern for others on the ethical decision process. These studies were designed using a laboratory format and a decision exercise that attempted to establish realistic business conflict situations through decision scenarios. Support is presented for the influence of gender and achievement on ethical choice. Recommendations for the future direction of this stream of research are given.     

Rethinking the liquidity puzzle: Application of a new measure of the economic money stock

Historically, attempts to solve the liquidity puzzle focus on narrowly defined monetary aggregates, such as non-borrowed reserves, the monetary base, or M1. Many of these efforts fail to find a short-term negative correlation between interest rates and monetary policy innovations. More recent research uses sophisticated macroeconomic and econometric modeling. However, little research has investigated the role measurement error plays in the liquidity puzzle, since in nearly every case, work investigating the liquidity puzzle has used one of the official monetary aggregates, which have been shown to exhibit significant measurement error. In this paper, we examine the role that measurement error plays in the liquidity puzzle by (i) providing a theoretical framework explaining how the official simple-sum methodology can lead to a liquidity puzzle, and (ii) testing for the liquidity effect by estimating an unrestricted VAR.     

Food, nutrition, and substitution in the late nineteenth century

Economic historians hypothesize that households in the nineteenth century substituted away from carbohydrates and fiber and towards protein and fat as their incomes rose. Anthropometric historians assert that there was increased nutrient intake without any nutritional substitution. I test these hypotheses using the 1888 Cost of Living Survey. I fail to reject the hypothesis that the income elasticity of fiber is greater than or equal to the income elasticities of protein, fat, or sugar—contrary to the nutritional substitution posited by economic historians. A food modified Engel curve reveals that the shares of carbohydrates, fat, and sugar in the diet vary with household income, but the shares of protein and fiber do not. I do find, however, that the share of protein from animal sources increases with household income. I also find that the diets of late nineteenth century industrial workers were surprisingly balanced by modern standards.     

Arbitrators’ characteristics and decision-making records,gender of arbitrators and grievants,and the presence of legal counsel as predictors of arbitral outcomes

Labor arbitration helps define employee and employer rights and responsibilities. Evidence indicates that the advocates at arbitration tend to concern themselves with issues unrelated to the facts of the case or to the rights and responsibilities of the parties involved. More specifically, before the hearing, management and union advocates often dwell on issues such as the importance of the arbitrators’ personal characteristics and their decision-making history, the likely effects of the gender of arbitrators and grievants, and whether the presence of legal counsel impacts the arbitral outcomes. The purpose of this study is to examine whether these non-case-related factors actually can be associated with differing awards by arbitrators. This study may be the first in which the arbitrators’ decision-making history (award orientation) is a primary issue. Of all the issues studied, the arbitrator’s disciplinary award orientation is the only one with a consistent impact on arbitral outcomes. We conclude that the energy and resources expended by the advocates concerning non-case-related issues would be better spent in preparing their cases for arbitration and in examining the potential impact of arbitration on the rights and responsibilities of management and its employees.     

The Effect of Aggregation of Accounting Information via Segment Reporting on Accounting Conservatism

In a sample of U.S. multiple-segment firms, we document a negative association between aggregation via segment reporting and timely loss recognition. A higher level of aggregation, as reflected in a firm’s reported organizational structure (the definition and characteristics of its segments), causes a multiple-segment firm to exhibit less cross-segment variation in profitability than a matched control portfolio of single-segment firms. We find that firms that engage in more aggregation report accounting numbers that provide less timely information about economic losses. We also observe that firms that provide more disaggregated segment data subsequent to adopting SFAS 131 experienced an increase in timely loss recognition. This result implies that higher quality segment reporting leads to an increase in timely loss recognition, which, per extant research, is associated with better governance. Our results complement results in Berger and Hann [2003. The impact of SFAS No. 131 on information and monitoring. Journal of Accounting Research, 41, 163–223] that show a decline in inefficient internal-capital-market transfers subsequent to the adoption of SFAS 131. Overall, we provide evidence supporting Beyer, Cohen, Lys, and Walther’s [2010. The financial reporting environment: Review of the recent literature. Journal of Accounting and Economics, 50, 296–343] contention that accounting conservatism is, in part, a function of managers’ aggregation choices.