THE VALUE OF IN‐STREAM WATER TEMPERATURE FORECASTS FOR FISHERIES MANAGEMENT

Water temperature is an important factor affecting aquatic life within the stream environment. Cold water species, such as salmonids, are particularly susceptible to elevated water temperatures. This paper examines the economic value of short‐term water temperature forecasts for salmonid management. Forecasts may have economic value if they allow the water resource manager to make better water allocation decisions. This study considers two applications: water releases for management of Chinook salmon in the Klamath River and leasing water from agriculture for management of steelhead trout in the John Day River. We incorporate biophysical models and water temperature distribution data into a Bayesian framework to simulate changes in fish populations and the corresponding benefit from recreational fishing and opportunity cost of water under different temperature forecast accuracies. Simulation results indicate that use of the forecasts results in increased fish production and that marginal costs decline and net benefits increase as forecast accuracy increases, suggesting that provision and use of such stream temperature forecasts would have value to society. (JEL Q22, Q25, Q28, Q50)     

The Influence of the Self‐Regulatory Focus on the Effectiveness of Stop‐Smoking Campaigns for Young Smokers

People's self‐regulatory focus may determine the effectiveness of stop‐smoking campaigns. An experiment with 226 young smokers investigated the persuasiveness of different emotional appeals for different self‐regulatory foci. A congruency effect emerges for attitude toward the advertisement and behavioral intentions: Young smokers with a promotion focus are more persuaded by sadness–joy than fear–relief campaigns, and the opposite is true for those with a prevention focus. As predicted by the regulatory relevancy principle, ad involvement mediates this effect.     

Uninvited U.S. Investors? Economic Consequences of Involuntary Cross‐Listings

We study the economic consequences of a recent Securities and Exchange Commission securities regulation change that grants foreign firms trading on the U.S. over‐the‐counter (OTC) market an automatic exemption from the reporting requirements of the 1934 Securities Act. We document that the number of voluntary (sponsored) OTC cross‐listings did not increase following the regulation change, suggesting that it did not achieve its intended purpose of increasing voluntary OTC cross‐listings through a reduction in compliance costs. We do find that the design of the regulation allowed financial intermediaries to create an unprecedented number of involuntary (unsponsored) OTC ADRs: 1,700 unsponsored ADR programs for 920 firms were created for companies that had previously chosen not to cross‐list in the United States. Our difference‐in‐differences analysis based on a matched sample approach documents that foreign firms forced into the U.S. capital markets experience a significant decrease in firm value, and we further show that the decrease in firm value is related to an increase in U.S. litigation risk. We also find that depositary banks’ propensity to involuntarily cross‐list firms is positively related to banks’ expected fee revenue, and that banks chose firms that incur high costs when involuntarily cross‐listed. Our results provide evidence that securities regulation can be exploited for private gain and result in costly unintended consequences.     

MARKETS FOR ORGANS: THE QUESTION OF SUPPLY

Organ transplantation holds the potential to substantially restore the health of many otherwise terminally ill patients. That potential, however, is currently being denied full realization by a chronic and severe shortage of cadaveric organs that are made available for this use. In recent years, medical practitioners, social scientists, and others have debated the virtues of allowing markets for cadaveric organs to form as a way to end the current shortage. In this debate, market opponents have argued, inter alia, that (1) organ collections may fall with payment of positive prices and (2) the price required to equilibrate organ supply and demand would be high. On the other hand, proponents of organ markets have argued that financial inducements could save many lives and that the equilibrium price is likely to be low. While dozens of papers have been published debating this issue, to date no one has provided any empirical evidence to resolve these important questions of supply. This paper provides preliminary evidence suggesting that potential donors would be relatively responsive to financial inducements and, accordingly, that the price required to eliminate the current shortage of organs is surprisingly low. (JEL 118, L50)     

CONSUMER SWITCHING COSTS AND FIRM PRICING: EVIDENCE FROM BANK PRICING OF DEPOSIT ACCOUNTS*

We employ extensive information on bank deposit rates and area migration patterns to examine pricing relationships implied by switching costs. We argue that, because of the trade‐off between attracting new customers and exploiting old ones, banks offer higher deposit rates in areas experiencing more in‐migration. Further, because greater out‐migration implies that a locked‐in customer will not be with the bank for as many periods, banks will offer lower deposit rates in areas exhibiting greater out‐migration. Also, because this effect of out‐migration logically depends on the extent of in‐migration, an interaction effect exists. We find evidence strongly supporting these relationships.     

Private Benefits of Control, Ownership, and the Cross-listing Decision

This paper investigates how a foreign firm's decision to cross-list on a U.S. stock exchange is related to the consumption of private benefits of control by its controlling shareholders. Theory has proposed that when private benefits are high, controlling shareholders are less likely to choose to cross-list in the United States because of constraints on the consumption of private benefits resulting from such listings. Using several proxies for private benefits related to the control and cash flow ownership rights of controlling shareholders, we find support for this hypothesis with a sample of more than 4,000 firms from 31 countries.