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.

Agency issues surrounding A-REITS and the global financial crisis

 This thesis examines the optimal balance of debt and equity undertaken by Australian Real Estate Investment Trusts, the incentive-driven pay structure utilized to compensate management, and the factors of A-REIT composition and performance that appeal to large, powerful shareholders who are able to influence market prices.

101 Ways to Save Money on Your Tax - Legally! 2012 - 2013

Do you ever wonder if you're getting everything you're entitled to when tax time rolls around—but perhaps you don't know where to start to find out if that's the case? With 101 Ways to Save Money on Your Tax, you can start here. Financial expert and award-winning accountant Adrian Raftery shares proven tips and advice for minimizing your debt and maximizing your return. With this invaluable guide, you'll learn safe ways to spend your refund, what to do if you are audited, things to look for when purchasing a property, what to remember when buying shares, and how to avoid common mistakes in business. Reveals tax tips and bonus resources to help manage your tax affairs all year round so you can get the best possible return Features fully updated advice for the 2012-2013 tax year, including the latest changes from the May 2012 budget Delves into key areas such as handling taxes for investment properties and share portfolios Covers tax topics that involve superannuation, business, employment, education, and much more

Assisting Australians with mental health problems and financial difficulties: a Delphi study to develop guidelines for financial counsellors, financial institution staff, mental health professionals and carers

BACKGROUND: There is a strong association between mental health problems and financial difficulties. Therefore, people who work with those who have financial difficulties (financial counsellors and financial institution staff) need to have knowledge and helping skills relevant to mental health problems. Conversely, people who support those with mental health problems (mental health professionals and carers) may need to have knowledge and helping skills relevant to financial difficulties. The Delphi expert consensus method was used to develop guidelines for people who work with or support those with mental health problems and financial difficulties.

METHODS: A systematic review of websites, books and journal articles was conducted to develop a questionnaire containing items about the knowledge, skills and actions relevant to working with or supporting someone with mental health problems and financial difficulties. These items were rated over three rounds by five Australian expert panels comprising of financial counsellors (n = 33), financial institution staff (n = 54), mental health professionals (n = 31), consumers (n = 20) and carers (n = 24).

RESULTS: A total of 897 items were rated, with 462 items endorsed by at least 80 % of members of each of the expert panels. These endorsed statements were used to develop a set of guidelines for financial counsellors, financial institution staff, mental health professionals and carers about how to assist someone with mental health problems and financial difficulties.

CONCLUSIONS: A diverse group of expert panel members were able to reach substantial consensus on the knowledge, skills and actions needed to work with and support people with mental health problems and financial difficulties. These guidelines can be used to inform policy and practice in the financial and mental health sectors.

Assisting Australians with mental health problems and financial difficulties: a Delphi study to develop guidelines for financial counsellors, financial institution staff, mental health professionals and carers

Background: There is a strong association between mental health problems and financial difficulties. Therefore, people who work with those who have financial difficulties (financial counsellors and financial institution staff) need to have knowledge and helping skills relevant to mental health problems. Conversely, people who support those with mental health problems (mental health professionals and carers) may need to have knowledge and helping skills relevant to financial difficulties. The Delphi expert consensus method was used to develop guidelines for people who work with or support those with mental health problems and financial difficulties. Methods: A systematic review of websites, books and journal articles was conducted to develop a questionnaire containing items about the knowledge, skills and actions relevant to working with or supporting someone with mental health problems and financial difficulties. These items were rated over three rounds by five Australian expert panels comprising of financial counsellors (n∈=∈33), financial institution staff (n∈=∈54), mental health professionals (n∈=∈31), consumers (n∈=∈20) and carers (n∈=∈24). Results: A total of 897 items were rated, with 462 items endorsed by at least 80 % of members of each of the expert panels. These endorsed statements were used to develop a set of guidelines for financial counsellors, financial institution staff, mental health professionals and carers about how to assist someone with mental health problems and financial difficulties. Conclusions: A diverse group of expert panel members were able to reach substantial consensus on the knowledge, skills and actions needed to work with and support people with mental health problems and financial difficulties. These guidelines can be used to inform policy and practice in the financial and mental health sectors.

101 Ways to save money on your tax -- legally!

In 101 Ways to Save Money on Your Tax – Legally! Adrian Raftery, aka Mr Taxman, gives you proven tips to help you minimise your tax debt and maximise your tax return.

Panel cointegration tests of the sustainability hypothesis in rich OECD countries

This study reexamines the sustainability hypothesis by testing whether government revenues and expenditures for eight rich OECD countries between 1977Q1 and 2005Q4 are cointegrated. For this purpose, a nonstationary panel data approach is adopted, which is general enough to permit for cross-country dependence as well as structural breaks representing major shifts in fiscal policy. In contrast to many earlier studies, the results reported in this study suggest that the sustainability hypothesis cannot be rejected. © 2010 Taylor & Francis.

To not forget: Pierre Hadot’s last book on Goethe. Pierre Hadot, N’oublie pas de vivre: pas de vivre: Goethe et la tradition des exercises spirituels (Albin Michel, 2008)

N’Oublie pas de vivre: Goethe et la tradition des exercises spirituels, which has remained untranslated, has hitherto attracted little scholarly recognition or critical notice, even in its native French. It is this situation that this review essay hopes to redress, in the small way permitted to any such piece of writing. In what follows, we examine in turn Hadot’s framing claims concerning the shaping ends and origins of Goethe’s species of neoclassicism (Part I), his claims concerning Goethe’s debt to the classical or Hellenistic tradition of spiritual exercises (Part II), before our closing remarks (Part III) challenge some of Hadot’s claims concerning the author of Faust, and then reflect on the significance of the fact that this last philosophical testament of Pierre Hadot’s was on a modern novelist, scientist, and poet, not an ancient philosopher.

Does banks’ dual holding affect bank lending and firms’ investment decisions? Evidence from China

This study investigates the effect of banks’ dual holding on bank lending and firms’ investment decisions using a sample of listed firms in China. We find that dual holding leads to easier access to bank loans, a result that is more pronounced for non-state-owned enterprises (non-SOEs) than SOEs. We also find that dual holding distorts banks’ lending decisions and harms the investment efficiency for SOEs, while resulting in optimal lending decisions and enhanced investment efficiency for non-SOEs. For non-SOEs, further analysis suggests that optimal lending decisions and efficient investment can be achieved for firms with higher ownership concentration, and firms in which the family and foreign investors are the controlling shareholders. We argue that, in emerging markets, whether a bank plays a monitoring role by directly holding the debt and equity claims of companies relies heavily on whether the potential collusion between firm executives and bank managers can be averted, which in turn is determined by the firms’ governance framework and ownership structure.

Capital structure and corporate performance: evidence from Jordan

This study is to investigate the effect which capital structure has had on corporate performance using a panel data sample representing of 167 Jordanian companies during 1989-2003. Our results showed that a firm’s capital structure had a significantly negative impact on the firm’s performance measures, in both the accounting and market’s measures. We also found that the short-term debt to total assets (STDTA) level has a significantly positive effect on the market performance measure (Tobin’s Q). The Gulf Crisis 1990-1991 was found to have a positive impact on Jordani an corporate performance while the out break of Intifadah in the West Bank and Gaza in September 2000 had a negative impact on corporate performance.

Controlling shareholder, expropriations and firm’s leverage decision: Evidence from Chinese Non-tradable share reform

This paper examines the effect of excess control rights on the leverage decisions made by Chinese non-SOEs before and after the Non-tradable share reform (NTS reform). We find that firms with excess control rights have more excess leverage and their controlling shareholders use the resources for tunneling rather than investing in positive NPV projects. We also find that excess leverage in firms with excess control rights decreases and the market reaction to announcements of related party transactions are more positive after NTS reform. This confirms that tunneling by the controlling shareholders actually reduced. We argue that in emerging markets where legal protection for creditors and shareholders is weak, controlling shareholders borrow excess debt to tunnel through inter-corporate loans and related party transactions. Furthermore the privatization of these economies can reduce the controlling shareholders' tunneling activities and associated excess leverage which destroys firm value.

The effect of ownership structure on leverage decision: new evidence from Chinese listed firms

This paper examines the effect of state control and ownership structure on the leverage decision of firms listed in the Chinese stock market. Our results show that state-owned enterprises (SOEs) have higher leverage ratios than non-SOEs, and SOEs in regions with a poorer institutional environment have higher leverage ratios than SOEs in better regions. We also show that the largest shareholding (the percentage of shares held by the largest shareholder) in the SOEs has a negative relationship with the leverage ratio, while the largest shareholding in non-SOEs has a non-linear relationship with the short-term and long-term debt ratios. Finally, this study also shows that the share split reform and the improvement of institutional environment both weaken the negative relationship and strengthen the positive relationship between largest shareholding and leverage of SOEs and non-SOEs to some extent. This paper documents how the financing behaviour of SOEs is more influenced by government intervention, while the financing behaviour of non-SOEs is more market oriented.

Information ratings and capital structure

We examine the impact of information asymmetry on a firm's capital structure decisions with a unique information rating scheme that draws from 114 measures over five dimensions of information disclosures on each firm from 2006 to 2012. We find that a firm with high (low) information rating is related to low (high) debt financing and leverage. In particular, a firm that moves from the lowest to the highest information rating experiences a 7.8% reduction in firm leverage on average. This relationship is robust to firm characteristics, incentive conflicts, and the agreement theory of Dittmar and Thakor (2007). Our results suggest that information asymmetry is in-fluential on a firm's pecking order behavior independent of these effects.

Default probability for the Jordanian companies: A test of cash flow theory

Abstract
This paper aims to investigate the effect of cash flow and free cash flow on corporate failure in the emerging market in particular Jordan using two samples; matched sample and a cross sectional time-series (panel data) sample representative of 167 Jordanian companies in 1989-2003. LOGIT models are used to outline the relationship between firms’ financial health and the probability of default. Our results show that there is firm’s free cash flow increases corporate failure. The result also shows that the firm’s cash flow decreases corporate failure. Firms’ capital structures are fund a mental in predicting default. Capital structure is seen as the main factor affecting the probability of default as it affects a firm’s ability to access external sources of funds. Jordanian firms depend on short-term debt for both short and long term financing.

Mothers' experiences of child support: qualitative research and opportunities for policy insight

Child support is one of the defining and under-studied elements of single mothering in contemporary Australia. However, the Australian Child Support Scheme is marked by high levels of debt and unreliable, partial and non-payment, which exacerbate mothers' financial insecurity. Most Australian child support research has focused on the amounts and outcomes of payments. Little is known about how and why mothers and fathers make the child support decisions they do. In this paper, we synthesise data from three interview studies with mothers who were due to receive child support to assess whether they experienced the system as intended. We compare the experience of child support policy 'on the books' with its experience by mothers 'on the ground'. A qualitative approach to mothers' experiences of child support highlights the social meaning of that money and the importance of understanding its transfer and use as embedded in social relations.