Relationship between franking credits and the market risk premium

In a dividend imputation tax system, equity investors have three potential sources of return: dividends, capital gains and franking (tax) credits. However, the standard procedures for estimating the market risk premium (MRP) for use in the capital asset pricing model, ignore the value of franking credits. Officer (1994) notes that if franking credits do affect the corporate cost of capital, their value must be added to the standard estimates of MRP. In the present paper, we explicitly derive the relationship between the value of franking credits (gamma) and the MRP. We show that the standard parameter estimates that have been adopted in practice (especially by Australian regulators) violate this deterministic mathematical relationship. We also show how information on dividend yields and effective tax rates bounds the values that can be reasonably used for gamma and the MRP. We make recommendations for how estimates of the MRP should be adjusted to reflect the value of franking credits in an internally consistent manner.

The risk premium for equity: implications for resource allocation, welfare and policy

Analysis of the equity premium puzzle has focused on private sector capital markets. The object of this paper is to consider the welfare and policy implications of each of the broad classes of explanations of the equity premium puzzle. As would be expected, the greater the deviation from the first-best outcome implied by a given explanation of the equity premium puzzle, the more interventionist are the implied policy conclusions. Nevertheless, even explanations of the equity premium puzzle consistent with a general consumption-based asset pricing model have important welfare and policy implications.

Cardiovascular risk estimation by professionally active cardiovascular nurses: Results from the Basel 2005 Nurses Cohort

Background Nurses play a key role in the prevention of cardiovascular disease (CVD) and one would, therefore, expect them to have a heightened awareness of the need for systematic screening and their own CVD risk profile. The aim of this study was to examine personal awareness of CVD risk among a cohort of cardiovascular nurses attending a European conference. Methods Of the 340 delegates attending the 5th annual Spring Meeting on Cardiovascular Nursing (Basel, Switzerland, 2005), 287 (83%) completed a self-report questionnaire to assess their own risk factors for CVD. Delegates were also asked to give an estimation of their absolute total risk of experiencing a fatal CVD event in the next 10 years. Level of agreement between self-reported CVD risk estimation and their actual risk according to the SCORE risk assessment system was compared by calculating weighted Kappa (κw). Results Overall, 109 responders (38%) self-reported having either pre-existing CVD (only 2%), one or more markedly raised CVD risk factors, a high total risk of fatal CVD (≥ 5% in 10 years) or a strong family history of CVD. About half of this cohort (53%) did not know their own total cholesterol level. Less than half (45%) reported having a 10-year risk of fatal CVD of < 1%, while 13% reported having a risk ≥ 5%. Based on the SCORE risk function, the estimated 10-year risk of a fatal CVD event was < 1% for 96% of responders: only 2% had a ≥ 5% risk of such an event. Overall, less than half (46%) of this cohort's self-reported CVD risk corresponded with that calculated using the SCORE risk function (κw = 0.27). Conclusion Most cardiovascular nurses attending a European conference in 2005 poorly understood their own CVD risk profile, and the agreement between their self-reported 10-year risk of a fatal CVD and their CVD risk using SCORE was only fair. Given the specialist nature of this conference, our findings clearly demonstrate a need to improve overall nursing awareness of the role and importance of systematic CVD risk assessment.

Lifetime Subsidies in Australian Private Health Insurance Markets with Community Rating

This paper considers the problem of inducing low-risk individuals of all ages to buy private health insurance in Australia. Our proposed subsidy scheme improves upon the age-based penalty scheme under the current "Australian Lifetime Cover" (LTC) scheme. We generate an alternative subsidy profile that obviates adverse selection in private health insurance markets with mandated, age-based, community rating. Our proposal is novel in that we generate subsidies that are both risk- and age-specific, based upon actual risk probabilities. The approach we take may prove useful in other jurisdictions where the extant law mandates community rating in private health insurance markets. Furthermore, our approach is useful in jurisdictions that seek to maintain private insurance to complement existing universal public systems.

Action research to explore perceptions of risk in project management

Uses research in a major UK company on the introduction of an electronic document management system to explore perceptions of, and attitudes to, risk. Phenomenological methods were used; with subsequent dialogue transcripts evaluated with Winmax dialogue software, using an adapted theoretical framework based upon an analysis of the literature. The paper identifies a number of factors, and builds a framework, that should support a greater understanding of risk assessment and project management by the academic community and practitioners.

Noise trader risk and the welfare effects of privatization

Excessive volatility of asset prices like that generated in the 'noise trader' model of De Long et al. is one factor that plausibly might contribute to an explanation of the equity premium. We extend the De Long et al. model to allow for privatization of publicly-owned assets and assess the welfare effects of such privatization in the presence of excess volatility arising from noise traders' mistaken beliefs.

Desire to drink in low- and high-risk social drinkers: An experimental analogue of impaired control

This study used a novel cue exposure paradigm to investigate the differences between high- and low-risk drinkers in their desire to drink during a drinking session. Fifty-three self-selected participants were assigned to high- or low-risk drinking groups based on their self-reported consumption of alcohol, then compared on their desire to drink over a 90 min paced drinking session. High-risk drinkers showed increasing desire over the session, while low-risk drinkers' desire began to decrease after only a short drinking period. The perceived and actual effects of the alcohol did not appear to be able to account for the difference. Results are discussed with reference to issues of impaired control. Suggestions for future research directions are also offered.

The relationship between media reporting of suicide and actual suicide in Australia

This study aimed to determine whether media items about suicide were associated with differential increases in actual suicides. Data were available on 4635 suicide-related items appearing in Australian newspapers and on radio and television news and current affairs shows between March 2000 and February 2001. These data were combined with national data on completed suicides occurring during the same period, by a process that involved identifying the date and geographical reach of the media items and determining the number of suicides occurring in the same location in selected weeks pre- and post-item. Regression analyses were conducted to determine whether the likelihood of an increase in post-item suicides could be explained by particular item characteristics. We found that 39% of media items were followed by an increase in mate suicides, and 31% by an increase in female suicides. Media items were more likely to be associated with increases in both male and female suicides if they occurred in the context of multiple other reports on suicide (versus occurring in isolation), if they were broadcast on television (versus other media), and if they were about completed suicide (versus attempted suicide or suicidal ideation). Different item content appeared to be influential for males and females, with an increase in male suicides being associated with items about an individual's experience of suicide and opinion pieces, and an increase in female suicides being associated with items about mass- or murder-suicide. Item prominence and quality were not differentially associated with increases in male or female suicides. Further research on this topic is required, but in the meantime there is a need to remain vigilant about how suicide news is reported. Mental health professionals and suicide experts should collaborate with media professionals to try to balance 'public interest' against the risk of harm. (c) 2005 Published by Elsevier Ltd.

Risk of serious NSAID-related gastrointestinal events during long-term exposure: a systematic review

Objective: Exposure to non-steroidal anti-inflammatory drugs (NSAIDs) is associated wit increased risk of serious gastrointestinal (GI) events compared with non-exposure. We investigated whether that risk is sustained over time. Data sources: Cochrane Controlled Trials Register (to 2002); MEDLINE, EMBASE, Derwent Drug File and Current Contents (1999-2002); manual searching of reviews (1999-2002). Study selection: From 479 search results reviewed and 221 articles retrieved, seven studies of patients exposed to prescription non-selective NSAIDs for more than 6 months and reporting time-dependent serious GI event rates were selected for quantitative data synthesis. These were stratified into two groups by study design. Data extraction: Incidence of GI events and number of patients at specific time points were extracted. Data synthesis: Meta-regression analyses were performed. Change in risk was evaluated by testing whether the slope of the regression line declined over time. Four randomised controlled trials (RCTs) provided evaluable data from five NSAID arms (aspirin, naproxen, two ibuprofen arms, and diclofenac). When the RCT data were combined, a small significant decline in annualised risk was seen: -0.005% (95% Cl, -0.008% to -0.001%) per month. Sensitivity analyses were conducted because there was disparity within the RCT data. The pooled estimate from three cohort studies showed no significant decline in annualised risk over periods up to 2 years: -0.003% (95% Cl, -0.008% to 0.003%) per month. Conclusions: Small decreases in risk over time were observed; these were of negligible clinical importance. For patients who need long-term (> 6 months) treatment, precautionary measures should be considered to reduce the net probability of serious GI events over the anticipated treatment duration. The effect of intermittent versus regular daily therapy on long-term risk needs further investigation.

Is modern medicine at risk of losing the plot?

Contemporary medicine has much to its credit, but has created an insatiable demand for new technologies and more health services, fed by commercial promotion, professional advocacy and sociopolitical pressure. Total health expenditure at the national level is now almost 10% of gross domestic product and is expected to top 16% by 2020. After recent inquiries into the failings of its public health system, the Queensland Government has committed itself to a 25% increase in expenditure on health over the next 5 years. But will it lead to better population health, and is it sustainable? The return-on-investment curve for modern health care may be flattening out, in an environment of growing numbers of older patients with chronic illnesses, maldistribution of services and hospital overcrowding. A change in thinking is required if current medical practice is to avoid imploding when confronted with the next major economic downturn. Health policy, service funding and clinical training must focus on critical appraisal of the effectiveness of health care technologies and the structure and financing of health care systems. Practising clinicians will be obliged to provide leadership in determining value for money in the choice of health care for specific patient populations and how that care is delivered.

Lifetime suicide risk in major depression: sex and age determinants

Background: Recent work has demonstrated that the lifetime suicide risk for patients with DSM IV Major Depression cannot mathematically approximate the accepted figure of 15%. Gender and age significantly affect both the prevalence of major depression and suicide risk, Methods: Gender and age stratified calculations were made on the entire population of the USA in 1994 using a mathematical algorithm. Sex specific corrections for under-reporting were incorporated into the design. Results: The lifetime suicide risks for men and women were 7% and 1%, respectively. The combined risk was 3.4%. The male:female ratio for suicide risk in major depression was 10:1 for youths under 25, and 5.6:1 for adults. Conclusions: Suicide in major depression is predominantly a male problem, although complacency towards female sufferers is to be avoided. Diagnosis of major depression is of limited help in predicting suicide risk compared to case specific factors. The male experience of depression that leads to suicide is often not identified as a legitimate medical complaint by either sufferers or professionals. Increasing help-accessing by males is a priority. Clinical implications: Patients with a history of hospitalisation; comorbidity, especially for substance abuse; and who are male, require greater vigilance for suicide risk. It may be that for males che threshold for diagnosing and treating major depression needs to be lowered. Limitations: This research is based on a mathematical algorithm to approximate a life-long longitudinal study that identifies community cases of depression. Our findings therefore rely on the validity of the statistics used. Extrapolation is limited to populations with an actual suicide rate of 17/100,000 or less and a lifetime prevalence of major depression of 17% or more. (C) 1999 Elsevier Science B.V. All rights reserved.