Public investment and the risk premium for equity

Analysis of the equity premium puzzle has focused on private-sector capital markets. However, the existence of an anomalous equity premium raises important issues in the evaluation of public-sector investment projects. These issues are explored below. We begin by formalizing the argument that an equity premium may arise from uninsurable systematic risk in labour income, and show that, other things being equal, increases in public ownership of equity will improve welfare, up to the point where the equity premium is eliminated. Finally, we consider policy implications and the optimal extent of public ownership.

Evaluating a model of parental influence on youth physical activity

Objective: To test a conceptual model linking parental physical activity orientations, parental support for physical activity, and children's self-efficacy perceptions with physical activity participation. Participants and Setting: The sample consisted of 380 students in grades 7 through 12 (mean age, 14.0 +/- 1.6 years) and their parents. Data collection took place during the fall of 1996. Main Outcome Measures: Parents completed a questionnaire assessing their physical activity habits, enjoyment of physical activity, beliefs regarding the importance of physical activity, and supportive behaviors for their child's physical activity. Students completed a 46-item inventory assessing physical activity during the previous 7 days and a 5-item physical activity self-efficacy scale. The model was tested via observed variable path analysis using structural equation modeling techniques (AMOS 4.0). Results: An initial model, in which parent physical activity orientations predicted child physical activity via parental support and child self-efficacy, did not provide an acceptable fit to the data. Inclusion of a direct path from parental support to child physical activity and deletion of a nonsignificant path from parental physical activity to child physical activity significantly improved model fit. Standardized path coefficients for the revised model ranged from 0.17 to 0.24, and all were significant at the p < 0.0001 level. Conclusions: Parental support was an important correlate of youth physical activity, acting directly or indirectly through its influence on self-efficacy. Physical activity interventions targeted at youth should include and evaluate the efficacy of individual-level and community-level strategies to increase parents' capacity to provide instrumental and motivational support for their children's physical activity.