Are all economic facts greatly exaggerated? Theory competition and selectivity

There is growing concern and mounting evidence of selectivity in empirical economics. Most empirical economic literatures have a truncated distribution of results. The aim of this paper is to explore the link between publication selectivity and theory contests. This link is confirmed through the analysis of 87 distinct empirical economics literatures, involving more than three and a half thousand separate empirical studies, using objective measures of both selectivity and contests. Our meta–meta-analysis shows that publication selection is widespread, but not universal. It distorts scientific inference with potentially adverse effects on policy making, but competition and debate between rival theories reduces this selectivity and thereby improves economic inference.

Job satisfaction and 'welfare-to-work' : is any job a good job for Australian mothers?

This exploratory study sought to assess the job satisfaction of employed Australian single mothers who had mandatory employment participation requirements. In particular, we sought to identify the characteristics of the job and the individual that were closely associated with participant’s job satisfaction. Self‑report data on job satisfaction, employment characteristics and parenting stress were collected from 155 employed single mothers. Participant job satisfaction was compared to female Australian population norms and linear regression analyses determined the job‑related and individual predictors of single mothers’ job satisfaction. Findings from this exploratory study revealed that single mothers involved in a mandatory welfare‑to‑work program experienced significantly lower job satisfaction than the Australian female population. The individual variable, parental distress, negatively predicted each of the six job satisfaction domains while being employed on a casual basis was inversely associated with three domains (job security, work hours and overall job satisfaction). The Australian government purported that making the transition from welfare to work would improve wellbeing for program participants, under the assumption that ‘any job’s a good job’. However, the relatively low levels of job satisfaction experienced by single mothers in the current study provide little support for this assumption.

The effect of financial constraints, investment policy, product market competition and corporate governance on the value of cash holdings

This study empirically investigates the value shareholders place on excess cash holdings and how shareholders’ valuation of cash holdings is associated with financial constraints, firm growth, cash-flow uncertainty and product market competition for Australian firms from 1990 to 2007. Our results indicate that the marginal value of cash holdings to shareholders declines with larger cash holdings and higher leverage. However, firms that are more financially constrained, that have higher growth rates and that face greater uncertainty exhibit a higher marginal value of cash holdings. These findings are consistent with the explanation that excess cash holdings are not necessarily detrimental to firm value. Firms with costly external financing and that also save more cash for current operating and future investing needs find that the market values these cash hoarding policies favourably. Finally, there is limited evidence of an association between various corporate governance measures and the value of cash holdings for a shorter sample period.

Survival misperception, time inconsistency, and implications for life-cycle saving and welfare

Some empirical studies firmly reveal that people tend to form overly pessimistic survival expectations for relatively less distant ages and overly optimistic survival expectations for relatively more distant ages. We incorporate this observation into a life-cycle continuous time overlapping-generations model of consumption/saving with a general form for a subjective survival function. Resulting time-inconsistent optimal control problem has been analytically solved. At the micro level, time inconsistency leads to higher consumption at young and old ages, but this alone fails to improve lifetime well-being since micro-level decisions made with a lack of information about true mortality are suboptimal. In general equilibrium, however, such time inconsistent behavior with survival misperception is conducive to aggregate capital accumulation and greater equilibrium bequest income. The latter effects can produce substantial welfare gains. We also note that empirically observed old age optimistic bias is an important phenomenon, as it helps to avoid unrealistic very old-age debt accumulation within a life-cycle model. In addition, if for a given level of optimistic bias we increase early-life pessimism, this would result in slower capital accumulation, lower bequest income, and thus be detrimental to welfare. Since recent literature reports that young-age survival pessimism has grown over time, it raises some concerns.

A dynamic model of tourism, employment and welfare: the case of Hong Kong

The present paper uses a dynamic open-economy model with wage indexation to examine the impact of tourism on employment and welfare. Both short-run and long-run situations are analysed. It is well known that tourism converts non-traded goods into tradable goods. An increase in the demand for a non-traded good raises its relative price, which results in an expansion of the non-traded sector at the expense of the traded goods sector. This output shift raises labour employment in the short run. However, in the long run, the higher relative price leads to higher wages, resulting in a negative impact on labour employment. If the output effect is dominant, the expansion in tourism raises employment and welfare. However, under realistic conditions tourism may lower both labour employment and welfare due to rising costs. These results are demonstrated by simulating a dynamic model for the case of Hong Kong.

The relationship between labour market conditions and welfare receipt in Australia: A stock-flow analysis

Understanding the determinants of changes in welfare caseloads is an important, but little studied, topic in Australia. This paper evaluates the role of labour market conditions in explaining the changes in the Australian welfare caseload since the late 1990s. The paper employs a stock-flow approach to better control for persistence in welfare receipt and includes different specifications to deal with measurement error in labour market data. The results suggest that the labour market is an important determinant of movements on and off welfare, accounting for the majority of the caseload decline during 1997-2005. The results also highlight the importance of robustness checks when data are measured with error.

Indices for cashmere fleece competition and across farm comparisons: The role of staple length in identifying goats of higher cashmere production

A single focus on mean fibre diameter (MFD, μm) as the definition of cashmere quality overlooks the effects of fibre length, softness and fibre curvature on cashmere processing, textile quality and consumer acceptance. Many farmers overlook the importance of cashmere staple length (SL, cm) in their fleece assessments. We aimed to determine the importance of SL in comparison with MFD when evaluating cashmere production and to identify how across farm comparisons of cashmere fleeces can be objectively undertaken. A sample of 1244 commercial cashmere fleeces from goats originating from many Australian farms was used. Least squares models, relating the logarithm of clean cashmere production (CCMwt, g) to MFD and SL, were fitted. Six years of data from the Australian cashmere industry between farm fleece competitions were analysed to determine the relation between CCMwt and MFD. In the research flocks, adjusting CCMwt of individual goats across farms for MFD only accounted for 2% of the variance, whereas SL accounted for 39% of the variance. The least squares additive model involving only SL was: log10(CCMwt)=1.570+0.06010×SL. Thus CCMwt was proportional to: 100.06010×SL=1.1484SL. It was appropriate to adjust CCMwt for SL by a factor 1/1.1484(SL-SL0) where SL0 is a standard SL of 7.5cm. The between farm index for cashmere weight equals: cleancashmerestaplelengthindex=2.823×CCMwt/1.1484SL. For industry fleece competitions, regression analysis indicated that there was no association between cashmere production and MFD (P=0.81), similar to the research data. Adjusting CCMwt for MFD in across farm comparison and fleece competitions appears to be ineffective. For farm comparisons and in fleece competitions it is important to assess cashmere SL. The use of the Clean Cashmere Staple Length Index will provide a more robust comparison of cashmere productivity between farms as it is an indirect indicator of desirable skin secondary follicle development. The results have application in development projects where obtaining a cashmere MFD test is costly or unavailable. © 2013 Elsevier B.V.

Standardised packaging and new enlarged graphic health warnings for tobacco products in Australia--legislative requirements and implementation of the Tobacco Plain Packaging Act 2011 and the Competition and Consumer (Tobacco) Information Standard, 2011

This paper describes the development, content and implementation of two pieces of Australian tobacco control legislation: one to standardise the packaging of tobacco products and the other to introduce new, enlarged graphic health warnings. It describes the process of legislative drafting, public consultation and parliamentary consideration. It summarises exactly how tobacco products have been required to look since late 2012. Finally, it describes implementation, most particularly, the extent to which packs compliant with the legislation became available to consumers over time.

Political competition and environmental reporting: evidence from New Zealand local governments

Purpose - The purpose of this paper is to investigate the relationship between "political competition" and "environmental reporting" by New Zealand local governments. Design/methodology/approach - The research method includes a longitudinal analysis of environmental reporting by New Zealand local governments in their annual reports for the financial years 2005-2006 to 2009-2010. "Content analysis" was used to attach scores to the extent of environmental reporting. The "number of candidates divided by the number of available positions at the previous election" was used as the proxy for "political competition". Findings - The study reports a positive relationship between "political competition" and "environmental reporting" in 2007-2008. The number of local governments reporting voluntary environmental information increased in 2006-2007 and 2007-2008 compared to 2005-2006, followed by a reduction in such numbers following the 2007-2008 financial year. This trend in disclosure can be attributed to the local government elections in October 2007. This finding is consistent with the expectation of "agency theory" and provides insight into the pattern of perceived agency costs. The study also finds a dearth in reporting "monetary" and "bad" news. Originality/value - The study contributes towards the previous literature on environmental reporting by concentrating on the public sector and New Zealand, together with investigating the relationship of such reporting with "political competition" through a longitudinal analysis. The theoretical contribution of this study is the adoption of "agency theory" in the context of public sector voluntary reporting and investigating the significance attached by agents to environmental reporting to minimise agency cost. The practical contribution of the study is in the area of future development of reporting standards in regards to environmental reporting.

Tourism, Dutch disease and welfare in an open dynamic economy

This chapter examines the effects of an expansion in tourism on capital accumulation, sectoral output and resident welfare in an open economy with an externality in the traded good sector. An expansion of tourism increases the relative price of the non traded good, improves the tertiary terms-of-trade and hence yields a gain in revenue. However, this increase in the relative price of non traded goods results in a lowering of the demand for capital used in the traded sector. The subsequent de-industrialization in the traded good sector may lower resident welfare. This result is supported by numerical simulations. © 2011 Nova Science Publishers, Inc.

Wage inequality and welfare in developing countries: privatization and reforms in the short and long run

The impacts of privatization on wage inequality and welfare are considered for developing countries. In the short run, privatization can narrow wage inequality but reduce output of public firms. However, the favorable effect of privatization on lowering wage inequality vanishes in the long run due to the excessive entry of public firms. Thus, a policy recommendation for privatization would be: to avoid rising wage inequality, entry regulation of public firms should be imposed in the short run, and to mitigate the output contraction, complementary structural changes or policy reforms are needed in the transitional period of privatization.

On the efficiency of private and state-owned enterprises in mixed markets

We examine oligopoly models of vertical product differentiation in which producing firms face variable costs of quality development. We show that comparing to private oligopoly, mixed oligopoly – whereby state-owned enterprises (SOEs) and private firms coexist – enhances social welfare but reduces firms' profitability. We also demonstrate that Bertrand competition makes firms better off under mixed oligopoly but it makes firms worse off under private oligopoly compared with Cournot competition. These findings help to justify both the existence of SOEs and the efficiency of SOEs and private firms in mixed markets in transitional economies.