Producing Localized Commodity Frontiers at the End of Cheap Nature: An Analysis of Eco‐scalar Carbon Fixes and their Consequences

There is no single ‘great’ commodity frontier whose exploitation under current socio‐technical conditions could fuel capital accumulation at the global scale. According to Jason Moore, this represents the ‘end of Cheap Nature’ and signals a terminal crisis for capitalism as we know it. In this article we complicate this assertion by showing how, in the context of global environmental governance frameworks of carbon control, a diverse range of actors situated at multiple scales are intensifying the use of cities and their hinterlands for the production/transgression of localized commodity frontiers. We draw on scholarship on uneven geographical development, state‐led restructuring and eco‐scalar fixes to present two case studies from different segments of the carbon cycle in the global South. The first case demonstrates how the introduction of waste‐to‐energy technology in Delhi facilitated the generation of ‘carbon credits’ while waste matter itself became a commodity. The second discusses attempts by the Brazilian state of Amazonas (Amazônia) aspiring to shift from rainforest exploitation to financialized conservation supported by the ‘green global city’ functions of metropolitan Manaus. These cases demonstrate that although the global carbon‐control regime may enable accumulation, implementation remains speculative, and localized commodity frontiers provoke social resistances that jeopardize their durability.     

International diversification with securitized real estate and the veiling glare from currency risk

This paper analyzes diversification benefits from international securitized real estate in a mixed-asset context. We apply regression-based mean-variance efficiency tests, conditional on currency-unhedged and fully hedged portfolios to account for systematic foreign exchange movements. From the perspective of a US investor, it is shown that, first, international diversification is superior to a US mixed-asset portfolio, second, adding international real estate to an already internationally diversified stock and bond portfolio results in a further significant improvement of the risk-return trade-off and, third, considering unhedged international assets could lead to biased asset allocation decisions not realizing the true diversification benefits from international assets.     

Predictability and Persistence of the Price Movements of the S&P/Case-Shiller House Price Indices

This paper examines persistence in price movements and predictability of the US housing market both on a local level across 20 cities in the US and on a nationwide level. We use a time series approach instead of often applied multivariate approaches to exclude potential biases across local markets and provide trading strategies to compare predictability across markets and to test whether or not the detected persistence can be exploited by investors to earn excess returns. The results from the monthly and quarterly transaction-based S&P/Case-Shiller house price indices from 1987 to 2009 provide empirical evidence on strong persistence. This is confirmed by both parametric and non-parametric tests for nominal and real house prices based on expected inflation. Furthermore, the empirical findings suggest that investors might be able to obtain excess returns from both autocorrelation-based and moving average-based trading strategies compared to a buy-and-hold strategy, although the results depend on the transaction costs individual investors face.     

Can advertising influence experience?

A study is reported in which exposure to advertising has no immediate effect on subjects' beliefs, but subsequently influences the beliefs of those subjects who have had experience with the topic of the advertised claim. The study supports a model of advertising as an influence on the interpretation of experience.     

Direct evidence of ending‐digit drop‐off in price information processing

Research has suggested that pricing products at one cent below a whole number (e.g., $4.99 instead of $5.00) can be an effective method for increasing purchases. Although many reasons for this have been suggested, a commonly proposed explanation is that consumers tend to drop off, or pay less attention to, the rightmost two digits. This drop‐off mechanism has garnered much indirect support, but only limited research has been conducted to directly test it. In this study, respondents provided estimates of how many products they could purchase for $73. Analyses indicated that respondents thought they could buy significantly more products priced with 99 endings than products with comparable 00‐ending prices. Follow‐up analyses showed that (a) errors made by respondents showed a pattern consistent with a dropoff mechanism, and (b) motivation to carefully provide quantity estimates moderated the effect. The study therefore provides rare direct evidence that the drop‐off mechanism may contribute to the effectiveness of 9‐ending pricing. © 2005 Wiley Periodicals, Inc.     

International Debt Shifting: The Value-Maximizing Mix of Internal and External Debt

Abstract

We study the capital structure of multinationals and expand previous theory by incorporating international debt tax shield effects from both internal and external capital markets. We show that: (i) multinationals’ firm value is maximized if both internal and external debt are used to save tax; (ii) the use of internal and external debt is independent of each other; and (iii) multinationals have a tax advantage over domestic firms, which cannot shift debt across international borders. We test our model using a large panel of German multinationals and find that internal and external debt shifting are of about equal importance.     

Relative Price Level of 99-Ending Prices: Image Versus Reality

Consumer research has indicated that the use of the 99 ending in a retail price creates the impression of a price that is relatively low. A comparative price survey of a wide assortment of general merchandise products indicates that this impression does not match marketplace reality. On the contrary, the price survey showed that retail prices with 99 endings were less likely than prices with other endings to be among the lower prices for an item. The finding of this discrepancy has implications for consumers, public policy-makers, and our understanding of how consumers make inferences from price information.     

The Anatomy of Public and Private Real Estate Return Premia

Market-wide, stock market specific, and real estate market specific risk – what kind of risk and to which extent drives the returns of listed real estate? Based on a structural asset pricing model calibrated to the empirical data in the U.S., we show that at least two thirds of the risk premium of listed real estate are driven by the same factors as direct real estate. Our results shed new light on the risk-characteristics of listed real estate returns and are of high interest for academics, regulators, and portfolio managers alike.     

Profit Shifting in Two‐Sided Markets

We investigate how multinational two‐sided platform firms set their prices on intra‐firm transactions. Two‐sided platform firms derive income from two customer groups that are connected through at least one positive network externality from one group to the other. A main finding is that, even in the absence of taxation, transfer prices deviate from marginal cost of production. A second result of the paper is that it is inherently difficult to establish arm’s length prices in two‐sided markets. Finally, we find that differences in national tax rates may be welfare enhancing, despite the use of (abusive) transfer prices as a profit‐shifting device.