The effect of species diffusion and heat conduction on nonequilibrium flows behind strong shocks. Contract no. NASr-119.

Mode of access: Internet.

Updating on the Credences of Others: Disagreement, Agreement, and Synergy

We introduce a family of rules for adjusting one’s credences in response to learning the credences of others. These rules have a number of desirable features. 1. They yield the posterior credences that would result from updating by standard Bayesian conditionalization on one’s peers’ reported credences if one’s likelihood function takes a particular simple form. 2. In the simplest form, they are symmetric among the agents in the group. 3. They map neatly onto the familiar Condorcet voting results. 4. They preserve shared agreement about independence in a wide range of cases. 5. They commute with conditionalization and with multiple peer updates. Importantly, these rules have a surprising property that we call synergy — peer testimony of credences can provide mutually supporting evidence raising an individual’s credence higher than any peer’s initial prior report. At first, this may seem to be a strike against them. We argue, however, that synergy is actually a desirable feature and the failure of other updating rules to yield synergy is a strike against them.

The measurement of induction shocks; a manual for the quantitative use of Faradic stimuli,

Mode of access: Internet.

The effectiveness of heat, cold and 6-dimethylaminopurine shocks for inducing tetraploidy in the Kuruma shrimp, Marsupenaeus japonicus (Bate)

In this study tetraploid Marsupenaeus japonicus (Bate) embryos were produced by preventing the first division in mitosis. The effectiveness of temperature and chemical shocks for producing tetraploid M. japonicus were assessed when applied at different times postspawning and for different durations. Tetraploid M. japonicus embryos (spawned at 27 degrees C) were produced by heat shocks at 35 degrees C and 36 degrees C in three and eight spawning samples respectively, and a cold shock at 5 degrees C in a single spawning sample. All temperature shocks inducing tetraploidy were applied 18-23 min postspawning for a 5-10 min duration. The percentage of spawnings successfully inducing tetraploid embryos (i.e., frequency of induction) ranged from 33.33% to 66.67% for the 21, 22 and 23 min postspawning heat shock treatment regimes. The percentage of tetraploid embryos within an induction (i.e., induction rate), as determined by flow cytometry, ranged from 8.82% to 98.12% (ave. S.E.) (34.4 +/- 21.4%) for the 35 degrees C shock treatments, from 13.12% to 61.02% (35.0 +/- 5.0%) for the 36 degrees C shock treatments and was 15% for the 5 degrees C cold shock treatment. No tetraploids were produced for spawnings that received heat shocks above 36 degrees C or below 35 degrees C, or for cold shocks above 5 degrees C for any of the tested postspawning treatment and duration times. Chemical shock with 150 mu M 6-dimethylaminopurine did not result in tetraploid M. japonicus embryos at any of the tested postspawning treatment times and durations. Tetraploid M. japonicus embryos were nonviable, with no tetraploid larvae being detected by flow cytometry. Based on our results heat shocking of M. japonicus embryos at 36 degrees C, 23 min postspawning for a 5-10 min duration is the most effective means to produce tetraploids through inhibition of the first mitotic division (taking into consideration the importance of frequency and induction rate equally).

Adolescent-parent disagreement on health-related quality of life of food-allergic adolescents:who makes the difference?

Background: Food-allergic adolescents are at highest risk for food allergy fatalities, which may be partly due to compromised self-management behavior. Such behavior may be negatively influenced by conflictual situations caused by adolescent–parent disagreement on the adolescent’s health-related quality of life (HRQL). Comparisons of adolescent-self-reported and parent-proxy-reported HRQL of food-allergic adolescents have never extensively been studied. The aims of this study were to investigate disagreement in adolescent-self-reports and parent-proxy-reports on the HRQL of food-allergic adolescents and to investigate the factors influencing adolescent–parent disagreement. Methods: Teenager Form (TF) and Parent Form (PFA) of the Food Allergy Quality of Life Questionnaire (FAQLQ), Food Allergy Independent Measure (FAIM), and Brief-Illness Perception Questionnaire (Brief-IPQ) were sent to food-allergic Dutch adolescents (13–17 years) and their parents. ICCs, t-tests, and Bland–Altman plots were used to investigate adolescent–parent disagreement. Participant characteristics, illness expectations, and illness perceptions influencing adolescent–parent disagreement were studied using regression analysis. Results: Seventy adolescent–parent pairs were included. There were a moderate correlation (ICC = 0.61, P < 0.001) and no significant difference (3.78 vs 3.56, P = 0.103) between adolescent-self-reported and parent-proxy-reported HRQL at group level. However, Bland–Altman plots showed relevant differences (exceeding the minimal important difference) for 63% of all adolescent–parent pairs. Adolescent’s age (>15 years), poorer adolescent-reported illness comprehension (Brief-IPQ-TF, coherence), and higher adolescent-reported perceived disease severity (Food Allergy Independent Measure-Teenager Form & -Parent Form) were associated with adolescent–parent disagreement. Conclusions: Adolescent–parent disagreement on the adolescent’s HRQL was mainly associated with adolescents’ rather than parents’ perceptions and characteristics. Illness comprehension of the adolescent may be an important target for intervention aimed at reducing adolescent–parent disagreement.

Wealth shocks, credit-supply shocks, and asset allocation:evidence from household and firm portfolios

We use a unique dataset with bank clients’ security holdings for all German banks to examine how macroeconomic shocks affect asset allocation preferences of households and non-financial firms. Our analysis focuses on two alternative mechanisms which can influence portfolio choice: wealth shocks, which are represented by the sovereign debt crisis in the Euro area, and credit-supply shocks which arise from reductions in borrowing abilities during bank distress. While households with large holdings of securities from stressed Euro area countries (Greece, Ireland, Italy, Portugal, and Spain) de-crease the degree of concentration in their security portfolio as a result of the Euro area crisis, non-financial firms with similar levels of holdings from stressed Euro area countries do not. Credit-supply shocks at the bank level result in lower concentration, for both households and non-financial corporations. Only shocks to corporate credit bear ramifications on bank clients’ portfolio concentration. Our results are robust to falsification tests, and instrumental variables estimation.

Illiquidity shocks and the comovement between stocks:new evidence using smooth transition

This paper extends the smooth transition conditional correlation model by studying for the first time the impact that illiquidity shocks have on stock market return comovement. We show that firms that experience shocks that increase illiquidity are less liquid than firms that experience shocks that decrease illiquidity. Shocks that increase illiquidity have no statistical impact on comovement. However, shocks that reduce illiquidity lead to a fall in comovement, a pattern that becomes stronger as the illiquidity of the firm increases. This discovery is consistent with increased transparency and an improvement in price efficiency. We find that a small number of firms experience a double illiquidity shock. For these firms, at the first shock, a rise in illiquidity reduces comovement while a fall in illiquidity raises comovement. The second shock partly reverses these changes as a rise in illiquidity is associated with a rise in comovement and a fall in illiquidity is associated with a fall in comovement. These results have important implications for portfolio construction and also for the measurement and evolution of market beta and the cost of capital as it suggests that investors can achieve higher returns for the same amount of market risk because of the greater diversification benefits that exist. We also find that illiquidity, friction, firm size and the pre-shock correlation are all associated with the magnitude of the correlation change. © 2013 Elsevier B.V.

Wealth shocks, credit-supply shocks, and asset allocation:evidence from household and firm portfolios

We use a unique dataset with bank clients’ security holdings for all German banks to examine how macroeconomic shocks affect asset allocation preferences of households and non-financial firms. Our analysis focuses on two alternative mechanisms which can influence portfolio choice: wealth shocks, which are represented by the sovereign debt crisis in the Eurozone, and credit-supply shocks which arise from reductions in borrowing abilities during bank distress. We document het- erogeneous responses to these two types of shocks. While households with large holdings of secu- rities from stressed Eurozone countries (Greece, Ireland, Italy, Portugal, and Spain) decrease the degree of concentration in their security portfolio as a result of the Eurozone crisis, non-financial firms with similar levels of holdings from stressed Eurozone countries do not. Credit-supply shocks at the bank level (caused by bank distress) result in lower concentration, for both households and non-financial corporations. We also show that only shocks to corporate credit bear ramifications on bank clients’ portfolio concentration, while shocks in retail credit are inconsequential. Our results are robust to falsification tests, propensity score matching techniques, and instrumental variables estimation.

The international impact of productivity shocks

Even though many studies have confirmed the Feldstein-Horioka (1980) finding that savings and investment rates are highly correlated, there is no consensus on the major reason for this correlation. The purpose of this dissertation is to develop theoretical models and calibrate and simulate these to compare their implications to explain the observed time-series comovement between savings and investment in an attempt to show that this high correlation may stem from technological shocks.^ The dissertation is comprised of three studies. The first two studies construct overlapping-generations, two-economy models of saving and investment under conditions of perfect international capital mobility. The second study differs from the first by endogenizing the labor supply. Employing simulations, the models are used to generate time-series for savings and investment. These are then compared with the actual data for specific economies. The models show that productivity shocks produce a high correlation between savings and investment. Further, while the model with exogenous labor supply displays monotonic adjustment, the economy with endogenous labor supply adjusts cyclically.^ The third model, on the other hand, constructs a general equilibrium model for a small open economy. The study is based on two important elements: adjustment costs in investment and endogenous, recursive time preferences. Again, the simulation results show that the model generates, at least in a significant part of the adjustment path, a positive correlation between domestic savings and investment in response to a supply shock. ^

A Study of How Economic Attitudes Are Shaped by Environmental Shocks and Life Experiences

Social attitudes, attitudes toward financial risk and attitudes toward deferred gratification are thought to influence many important economic decisions over the life-course. In economic theory, these attitudes are key components in diverse models of behavior, including collective action, saving and investment decisions and occupational choice. The relevance of these attitudes have been confirmed empirically. Yet, the factors that influence them are not well understood. This research evaluates how these attitudes are affected by large disruptive events, namely, a natural disaster and a civil conflict, and also by an individual-specific life event, namely, having children.

By implementing rigorous empirical strategies drawing on rich longitudinal datasets, this research project advances our understanding of how life experiences shape these attitudes. Moreover, compelling evidence is provided that the observed changes in attitudes are likely to reflect changes in preferences given that they are not driven just by changes in financial circumstances. Therefore the findings of this research project also contribute to the discussion of whether preferences are really fixed, a usual assumption in economics.

In the first chapter, I study how altruistic and trusting attitudes are affected by exposure to the 2004 Indian Ocean tsunami as long as ten years after the disaster occurred. Establishing a causal relationship between natural disasters and attitudes presents several challenges as endogenous exposure and sample selection can confound the analysis. I take on these challenges by exploiting plausibly exogenous variation in exposure to the tsunami and by relying on a longitudinal dataset representative of the pre-tsunami population in two districts of Aceh, Indonesia. The sample is drawn from the Study of the Tsunami Aftermath and Recovery (STAR), a survey with data collected both before and after the disaster and especially designed to identify the impact of the tsunami. The altruistic and trusting attitudes of the respondents are measured by their behavior in the dictator and trust games. I find that witnessing closely the damage caused by the tsunami but without suffering severe economic damage oneself increases altruistic and trusting behavior, particularly towards individuals from tsunami affected communities. Having suffered severe economic damage has no impact on altruistic behavior but may have increased trusting behavior. These effects do not seem to be caused by the consequences of the tsunami on people’s financial situation. Instead they are consistent with how experiences of loss and solidarity may have shaped social attitudes by affecting empathy and perceptions of who is deserving of aid and trust.

In the second chapter, co-authored with Ryan Brown, Duncan Thomas and Andrea Velasquez, we investigate how attitudes toward financial risk are affected by elevated levels of insecurity and uncertainty brought on by the Mexican Drug War. To conduct our analysis, we pair the Mexican Family Life Survey (MxFLS), a rich longitudinal dataset ideally suited for our purposes, with a dataset on homicide rates at the month and municipality-level. The homicide rates capture well the overall crime environment created by the drug war. The MxFLS elicits risk attitudes by asking respondents to choose between hypothetical gambles with different payoffs. Our strategy to identify a causal effect has two key components. First, we implement an individual fixed effects strategy which allows us to control for all time-invariant heterogeneity. The remaining time variant heterogeneity is unlikely to be correlated with changes in the local crime environment given the well-documented political origins of the Mexican Drug War. We also show supporting evidence in this regard. The second component of our identification strategy is to use an intent-to-treat approach to shield our estimates from endogenous migration. Our findings indicate that exposure to greater local-area violent crime results in increased risk aversion. This effect is not driven by changes in financial circumstances, but may be explained instead by heightened fear of victimization. Nonetheless, we find that having greater economic resources mitigate the impact. This may be due to individuals with greater economic resources being able to avoid crime by affording better transportation or security at work.

The third chapter, co-authored with Duncan Thomas, evaluates whether attitudes toward deferred gratification change after having children. For this study we also exploit the MxFLS, which elicits attitudes toward deferred gratification (commonly known as time discounting) by asking individuals to choose between hypothetical payments at different points in time. We implement a difference-in-difference estimator to control for all time-invariant heterogeneity and show that our results are robust to the inclusion of time varying characteristics likely correlated with child birth. We find that becoming a mother increases time discounting especially in the first two years after childbirth and in particular for those women without a spouse at home. Having additional children does not have an effect and the effect for men seems to go in the opposite direction. These heterogeneous effects suggest that child rearing may affect time discounting due to generated stress or not fully anticipated spending needs.

The Effect of Reputation Shocks to Rating Agencies on Corporate Disclosures

This paper explores the effect of credit rating agency’s (CRA) reputation on the discretionary disclosures of corporate bond issuers. Academics, practitioners, and regulators disagree on the informational role played by major CRAs and the usefulness of credit ratings in influencing investors’ perception of the credit risk of bond issuers. Using management earnings forecasts as a measure of discretionary disclosure, I find that investors demand more (less) disclosure from bond issuers when the ratings become less (more) credible. In addition, using content analytics, I find that bond issuers disclose more qualitative information during periods of low CRA reputation to aid investors better assess credit risk. That the corporate managers alter their voluntary disclosure in response to CRA reputation shocks is consistent with credit ratings providing incremental information to investors and reducing adverse selection in lending markets. Overall, my findings suggest that managers rely on voluntary disclosure as a credible mechanism to reduce information asymmetry in bond markets.