Transmission of information within transnational social networks: a field experiment

Several studies have shown a relationship between the stocks of migrants and country-level investment in the home country; however the mechanism through which this relationship operates is still unexplored. We use a field experiment in which participants who are recent immigrants send information about risky decisions to others in their social network in their home country. The results demonstrate how this information influences decisions in the home country. We find that the advice given by family members and decisions made by friends significantly affects an individual’s risky decision-making.     

The demand for small cars in the United States: Implications for energy conservation strategies

The purpose of this paper was to investigate the impact of household characteristics and preferences for Japanese cars on the demand for small cars in the United States. Two stage probit analysis was used to examine the impact of various explanatory variables on the purchase decision. The results indicated that preferences for Japanese cars, income, price and several household characteristics had a significant impact on the probability of purchasing a small car. The results of this study provide support for freer trade in automobiles and higher gasoline taxes as energy conservation strategies.

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Zusammenfassung Die Nachfrage nach Kleinwagen in USA: Implikationen für Strategien zur Energieeinsparung. Diese Untersuchung wollte herausfinden, wie sich Haushaltseigenschaften und Präferenzen für japanische Autos auf die Nachfrage nach Kleinwagen in den Vereinigten Staaten auswirken. Die Stichprobe umfa\te 367 Haushalte, die im Jahr 1986 ein neues Auto kauften. Davon kauften 141 Haushalte amerikanische Kleinwagen, 84 japanische Kleinwagen und 142 Haushalte kauften gro\e amerikanische Wagen. Eine zweistufige Probit-Analyse prüfte den Einflu\ der verschiedenen Erklärungsvariablen auf die Kaufentscheidung. Die Ergebnisse besagen im wesentlichen, da\ es die Präferenzen für japanische Autos, das Einkommen, der Preis und einige Haushaltseigenschaften sind, die einen signifikanten Einflu\ auf die Wahrscheinlichkeit eines Kleinwagenkaufs haben. Die Autoren sehen in den Ergebnissen eine Unterstützung für die Forderung nach Freihandel im Automobilsektor und nach höherer Besteuerung von Kraftstoffen als Strategien zur Energieeinsparung.

     

Head-heart disparity among future managers: Implications for ethical conduct

An examination of the ethical perceptions of business students using Macobby's head/heart traits and a comparison to earlier studies of managers, accountants, and business students is made. The data were collected at three universities that are similar in size, enrollment and degree programs within the College of Business. Results indicate that present day business students are no less ethically inclined than are their business counterparts in previous eras. In general head traits dominated over heart traits, an indication that business schools continued to do a good job emphasizing and developing analytical skills but a poor job of developing the qualities of the heart that are generally associated with ethical behavior. The implications of these findings are discussed.     

Evaluating FOMC forecasts

Monetary policy outcomes have improved since the early 1980s. One factor contributing to the improvement is that Federal Reserve policymakers began reporting economic forecasts to Congress in 1979. These forecasts indicate what the Federal Open Market Committee (FOMC) members think will be the likely consequence of their policies. We evaluate the accuracy of the FOMC forecasts relative to private sector forecasts, the forecasts of the Research Staff at the Board of Governors, and a naïve alternative. We find that the FOMC output forecasts were better than the naïve model and at least as good as those of the private sector and the Fed staff. The FOMC inflation forecasts were more accurate than the private sector forecasts and the naïve model; for the period ending in 1996, however, they were not as accurate as Fed staff inflation forecasts.     

Intended electoral participation in transition countries

This paper examines the determinants of intended electoral participation. We analyze attitudes to both referenda and voting in national elections. Sample survey data are obtained from the Eurobarometer survey of transition countries in Central and Eastern Europe. The empirical results suggest that intended electoral participation increases with age, income and education. But attitudinal variables are also important and in particular confidence in the free market economy and satisfaction with the general development of the country impact positively on intended electoral participation. Received: Received: April 2003 / Accepted: August 2004, Accepted: Received: April 2003 / Accepted: August 2004, JEL Classification: H26, K42 We gratefully acknowledge the financial support of CERGE-EI. We are also grateful for the helpful comments of three anonymous referees, the journal editor and R. Filer and L. Squires.     

The effect of accounting firm mergers on the market for audit services: New Zealand evidence

This article examines the outcomes of accounting firm mergers using data about the frequency of audit switches, the numbers of partners in the respective firms, and perceptions revealed in interviews with partners. Evidence from client switches does not show any evidence that the mergers were followed by cost reductions, or of collusion to force prices up. The effects of the mergers appear to have been elsewhere—the merging firms reduced partner numbers substantially, increasing partner leverage so that individual remaining partners were better off. Data from interviews confirm these findings, and show that the culture of individual firms had a significant effect on determining which group of partners controlled the merged firm.     

WHOM YOU CONNECT WITH MATTERS: DIRECTOR NETWORKS AND FIRM LOCATION

We examine whether board members serve as a channel for remotely located firms to access the benefits from business‐dense areas due to economies of agglomeration. We find that geographically remote firms benefit from connections to firms in top metropolitan statistical areas (MSAs) for business density. After controlling for director compensation, we find connections to top MSA firms mitigate the negative effect of increased distance from business‐dense areas. We address concerns of endogeneity by exploring a sample of firms whose directors gain board seats at top MSA firms and find a similar positive impact of connections to top MSA firms.     

Investigation of institutional changes in the UK housing market using structural break tests and time-varying parameter models

This paper investigates the effects of institutional changes within the UK housing market in recent decades using structural break tests and time-varying parameter models. This approach is motivated by models of institutional change drawn from the political science literature which focus on the existence of both fast-moving and slow-moving institutional changes and the interactions between them as drivers of the dynamics of asset prices. As a methodological contribution, we use several time-varying parameter models for the first time in investigations of institutional change. Our findings support the existence of both structural breaks and continuous variance in parameters. This contributes to our understanding of the housing market in two respects. Firstly, the dates of structural breaks appear to better match unexpected market shocks rather than remarkable political events, and this supports prior institutional theory. Secondly, assessment of the effect of slow-moving institutional changes shows that people’s biased expectations rather than the economic fundamentals have increasingly played an important role in driving housing prices in the short run although fundamentals continue to drive house prices to converge to their long-run equilibrium.     

What's on the Menu? Policies to Reduce Young People's Sugar Consumption

Young people in the UK consume far above the maximum recommended levels of added sugar. It is likely that neither they nor their parents fully take account of the future health, social and economic costs of this high sugar consumption. This provides a rationale for policy intervention. The majority of young people's added sugar consumption occurs in the home, where purchases are typically made by parents. This means that understanding the purchase decisions of adults is important for policy design, even if the policies aim to reduce the consumption of young people. We discuss the merits of popular policies, including taxes, advertising restrictions and restrictions on the availability of specific foods, and we identify promising avenues for future research.