The Permanent Income Hypothesis: A Test on Czech Privatisation

Since the late eighties, economists have been regarding the transition from command to market economies in Central and Eastern Europe with intense interest. In addition to studying the transition per se, they have begun using the region as a testing ground on which to investigate the validity of certain classic economic propositions. In his research, comprising three articles written in English and totalling 40 pages, Mr. Hanousek uses the so-called "Czech national experiment" (voucher privatisation scheme) to test the permanent income hypothesis (PIH). He took as his inspiration Kreinin's recommendation: "Since data concerning the behaviour of windfall income recipients is relatively scanty, and since such data can constitute an important test of the permanent income hypothesis, it is of interest to bring to bear on the hypothesis whatever information is available". Mr. Hanousek argues that, since the transfer of property to Czech citizens from 1992 to 1994 through the voucher scheme was not anticipated, it can be regarded as windfall income. The average size of the windfall was more than three month's salary and over 60 percent of the Czech population received this unexpected income. Furthermore, there are other reasons for conducting such an analysis in the Czech Republic. Firstly, the privatisation process took place quickly. Secondly, both the economy and consumer behaviour have been very stable. Thirdly, out of a total population of 10 million Czech citizens, an astonishing 6 million, that is, virtually every household, participated in the scheme. Thus Czech voucher privatisation provides a sample for testing the PIH almost equivalent to a full population, thus avoiding problems with the distribution of windfalls. Compare this, for instance with the fact that only 4% of the Israeli urban population received personal restitution from Germany, while the number of veterans who received the National Service Life Insurance Dividends amounted to less than 9% of the US population and were concentrated in certain age groups. But to begin with, Mr. Hanousek considers the question of whether the public percieves the transfer from the state to individual as an increase in net wealth. It can be argued that the state is only divesting itself of assets that would otherwise provide a future source of transfers. According to this argument, assigning these assets to individuals creates an offsetting change in the present value of potential future transfers so that individuals are no better off after the transfer. Mr. Hanousek disagrees with this approach. He points out that a change in the ownership of inefficient state-owned enterprises should lead to higher efficiency, which alone increases the value of enterprises and creates a windfall increase in citizens' portfolios. More importantly, the state and individuals had very different preferences during the transition. Despite government propaganda, it is doubtful that citizens of former communist countries viewed government-owned enterprises as being operated in the citizens' best interest. Moreover, it is unlikely that the public fully comprehended the sophisticated links between the state budget, state-owned enterprises, and transfers to individuals. Finally, the transfers were not equal across the population. Mr. Hanousek conducted a survey on 1263 individuals, dividing them into four monthly earnings categories. After determining whether the respondent had participated in the voucher process, he asked those who had how much of what they received from voucher privatisation had been (a) spent on goods and services, (b) invested elsewhere, (c) transferred to newly emerging pension funds, (d) given to a family member, and (e) retained in their original form as an investment. Both the mean and the variance of the windfall rise with income. He obtained similar results with respect to education, where the mean (median) windfall for those with a basic school education was 13,600 Czech Crowns (CZK), a figure that increased to 15,000 CZK for those with a high school education without exams, 19,900 CZK for high school graduates with exams, and 24,600 CZK for university graduates. Mr. Hanousek concludes that it can be argued that higher income (and better educated) groups allocated their vouchers or timed the disposition of their shares better. He turns next to an analysis of how respondents reported using their windfalls. The key result is that only a relatively small number of individuals reported spending on goods. Overall, the results provide strong support for the permanent income hypothesis, the only apparent deviation being the fact that both men and women aged 26 to 35 apparently consume more than they should if the windfall were annuitised. This finding is still fully consistent with the PIH, however, if this group is at a stage in their life-cycle where, without the windfall, they would be borrowing to finance consumption associated with family formation etc. Indeed, the PIH predicts that individuals who would otherwise borrow to finance consumption would consume the windfall up to the level equal to the annuitised fraction of the increase in lifetime income plus the full amount of the previously planned borrowing for consumption. Greater consumption would then be financed, not from investing the windfall, but from avoidance of future repayment obligations for debts that would have been incurred without the windfall.

Corporate dividencs and seasoned equity issues: an empirical investigation

This paper investigates whether managers rely on dividends to obtain a higher price in a stock offering and whether the stock price reaction to dividend and offering announcements justifies such a coordination. The evidence does not support either conjecture. Issuing firms are not more likely to pay or increase dividends than nonissuing forms. Moreover, there is little evidence that firms time stock offering announcements right after dividend declarations to befefit from the attendant information disclosure. The analysis of dividend and stock offering announcement effects suggests few if any benefits from linking divbidend and stock offering announcements.

Corporate acquisitions by listed firms: the experience of a comprehensive sample

The sample used includes tender offers, mergers, acquisitions of privately held corporations, and comprehensive acquisitions of other firms' assets. According to the results, the majority of bid announcements prompt significant stock price increases, especially when controlling for partial anticipation problems and relative acquisition size. Furthermore, there is little evidence that firms that engage in "bad" acquisitions are more likely to be taken over.

Identity, incentives and the value of information

We examine the impact of identity preferences on the interrelation between incentives and performance measurement. In our model, a manager identifies with an organization and loses utility to the extent that his actions conflict with effort-standards issued by the principal. Contrary to prior arguments in the literature, we find conditions under which a manager who identifies strongly with the organization receives stronger incentives and faces more performance evaluation reports than a manager who does not identify with the organization. Our theory predicts that managers who experience events that boost their identification with the firm can decrease their effort in short-term value creation. We also find that firms are more likely to employ less precise but more congruent performance measures, such as stock prices, when contracting with managers who identify little with the organization. In contrast, they use more precise but less congruent measures, such as accounting earnings, when contracting with managers who identify strongly with the firm.

Draft Genome Sequence of the Virulent Avibacterium paragallinarum Serotype A Strain JF4211 and Identification of Two Toxins

Avibacterium paragallinarum is an important pathogen of chicken livestock causing infectious coryza. Here, we report the draft genome sequence of the virulent A. paragallinarum serotype A strain JF4211 (2.8 Mbp and G+C content of 41%) and the two toxin operons discovered from the annotation of the genome.

Draft Genome Sequence of the Virulent Clostridium chauvoei Reference Strain JF4335

Clostridium chauvoei is the etiological agent of blackleg, a disease of cattle and sheep with high mortality rates, causing severe economic losses in livestock production. Here, we report the draft genome sequence of the virulent C. chauvoei strain JF4335 (2.8 Mbp and 28% G+C content) and the annotation of the genome.

Genome Sequence of Mycoplasma feriruminatoris sp. nov., a Fast-Growing Mycoplasma Species

Members of the “Mycoplasma mycoides cluster” represent important livestock pathogens worldwide. We report the genome sequence of Mycoplasma feriruminatoris sp. nov., the closest relative to the “Mycoplasma mycoides cluster” and the fastest-growing Mycoplasma species described to date.

Complete genome sequences of both biotypes of a virus pair of bovine viral diarrhea virus subgenotype 1k

We determined the complete genome sequences of both biotypes of a virus pair of bovine viral diarrhea virus (BVDV) subgenotype 1k. The viruses were isolated from a persistently infected calf suffering from mucosal disease. Compared to the noncytopathic biotype, the cytopathic biotype contains an insertion of 84 nucleotides and 22 nucleotide changes.

Screening for obstructive sleep apnea on the internet: randomized trial.

BACKGROUND: Obstructive sleep apnea is underdiagnosed. We conducted a pilot randomized controlled trial of an online intervention to promote obstructive sleep apnea screening among members of an Internet weight-loss community. METHODS: Members of an Internet weight-loss community who have never been diagnosed with obstructive sleep apnea or discussed the condition with their healthcare provider were randomized to intervention (online risk assessment+feedback) or control. The primary outcome was discussing obstructive sleep apnea with a healthcare provider at 12 weeks. RESULTS: Of 4700 members who were sent e-mail study announcements, 168 (97% were female, age 39.5 years [standard deviation 11.7], body mass index 30.3 [standard deviation 7.8]) were randomized to intervention (n=84) or control (n=84). Of 82 intervention subjects who completed the risk assessment, 50 (61%) were low risk and 32 (39%) were high risk for obstructive sleep apnea. Intervention subjects were more likely than control subjects to discuss obstructive sleep apnea with their healthcare provider within 12 weeks (11% [9/84] vs 2% [2/84]; P=.02; relative risk=4.50; 95% confidence interval, 1.002-20.21). The number needed to treat was 12. High-risk intervention subjects were more likely than control subjects to discuss obstructive sleep apnea with their healthcare provider (19% [6/32] vs 2% [2/84]; P=.004; relative risk=7.88; 95% confidence interval, 1.68-37.02). One high-risk intervention subject started treatment for obstructive sleep apnea. CONCLUSION: An online screening intervention is feasible and likely effective in encouraging members of an Internet weight-loss community to discuss obstructive sleep apnea with their healthcare provider.

Inequality in Income and Wealth in Switzerland from 1970 to 2010

The supposed rise of inequality in income and wealth is a much-discussed issue. Since in a number of industrialized countries a trend towards more inequality was observed over the last decades, it is often assumed that Switzerland has experienced a similar development. Yet, although a variety of studies exists that provide inequality estimates for the Swiss society at different points in time, no conclusive picture of the changes in inequality can be drawn from these studies. For example, recent estimates by the Swiss Federal Statistical Office indicate that – against expectations – inequality in disposable equivalent-incomes has not risen since the end of the 1990ies, whereas other studies indicate that earnings from employment – especially top salaries – have become more unequal. The reasons for the inconclusive picture are manifold. For example, trends might have been different for different income types and results might strongly depend on the quality of the used data. To close the knowledge gap in inequality research in Switzerland a new Swiss National Science Foundation project by the University of Bern and the Bern University of Applied Sciences has been started in 2013. Individual tax data from cantons will be analyzed along with aggregate data from the Swiss Federal Tax Administration, covering a period from the early 1970ies to the present. The goal is to gain a systematic overview of the development of inequality in income and wealth in Switzerland as a whole and within cantons, and to determine how changes can be explained. In our talk we will present first results from this project.

Behavioral effects of plasma tryptophan depletion in aggressive and nonaggressive men

Serotonin (5-HT) neurotransmission deficits have been implicated in impulsive aggression. A Trp-free beverage of amino acids competitively inhibits Trp uptake into the brain for 5-HT synthesis and also lowers endogenous plasma Trp for several hours. This has worsened mood and/or increased aggressive behavior, especially in hostile persons or those with histories of depression. In 24 community-recruited men (12 each with and without significant aggression histories), aggressive and impulsive behavior in the laboratory was assessed before and after plasma Trp depletion and Trp loading. In the aggression model, subjects were provoked by periodic subtractions of participation earnings, and these subtractions were blamed on a ficitious other participant. Aggression was measured as the responses the subject made to subtract money from his antagonist. Impulsiveness was operationalized as: (1) the choice of smaller reward after a shorter delay over having to wait longer to receive a larger reward, and (2) “false alarm” commission errors in a modified Continuous Performance Task, which represent a failure to inhibit responding to stimuli similar (but not identical) to target stimuli. Finally, plasma cortisol and Trp were measured under each condition immediately following a aggression testing session when subjects were highly provoked. I hypothesized that 5-HT may tonically modulate (inhibit) the hypothalmnic-pituitary-adrenal stress response, such that Trp depletion may enhance the cortisol response to high provocation in aggressive men. ^ Trp depletion had no effect in the laboratory tasks purported to measure impulsive behavior, and failed to cause increases in aggressive behavior under low provocation conditions. Under higher provocation, however, aggressive responses we re elevated under Trp-depleted conditions relative to Trp-loaded conditions in aggressive men, whereas the reverse was true in nonaggressive men. Cortisol levels nonsignificantly paralled the group differences in aggression under Trp-depleted and Trp-loaded conditions. Aggressive men achieved lower plasma Trp levels after Trp loading than did nonaggressive men, possibly due to heavy alcohol use histories. The high post-loading plasma Trp levels in nonaggressive men tended also to correlate with their aggressive responding rates, due perhaps to increases in other psychoactive Trp metabolites. ^

Cost-effectiveness analysis of paclitaxel-coated balloons for endovascular therapy of femoropopliteal arterial obstructions.

PURPOSE To explore the cost-effectiveness of using drug-eluting balloon (DEB) angioplasty for the treatment of femoropopliteal arterial lesions, which has been shown to significantly lower the rates of target lesion revascularization (TLR) compared with standard balloon angioplasty (BA). METHODS A simplified decision-analytic model based on TLR rates reported in the literature was applied to baseline and follow-up costs associated with in-hospital patient treatment during 1 year of follow-up. Costs were expressed in Swiss Francs (sFr) and calculated per 100 patients treated. Budgets were analyzed in the context of current SwissDRG reimbursement figures and calculated from two different perspectives: a general budget on total treatment costs (third-party healthcare payer) as well as a budget focusing on the physician/facility provider perspective. RESULTS After 1 year, use of DEB was associated with substantially lower total inpatient treatment costs when compared with BA (sFr 861,916 vs. sFr 951,877) despite the need for a greater investment at baseline related to higher prices for DEBs. In the absence of dedicated reimbursement incentives, however, use of DEB was shown to be the financially less favorable treatment approach from the physician/facility provider perspective (12-month total earnings: sFr 179,238 vs. sFr 333,678). CONCLUSION Use of DEBs may be cost-effective through prevention of TLR at 1 year of follow-up. The introduction of dedicated financial incentives aimed at improving DEB reimbursements may help lower total healthcare costs.

Genome Sequences of Two Klebsiella pneumoniae Isolates from Different Geographical Regions, Argentina (Strain JHCK1) and the United States (Strain VA360)

We report the sequences of two Klebsiella pneumoniae clinical isolates, strains JHCK1 and VA360, from a newborn with meningitis in Buenos Aires, Argentina, and from a tertiary care medical center in Cleveland, OH, respectively. Both isolates contain one chromosome and at least five plasmids; isolate VA360 contains the Klebsiella pneumoniae carbapenemase (KPC) gene

Long-term effectiveness of supported employment: 5-year follow-up of a randomized controlled trial

Objective The individual placement and support model of supported employment has been shown to be more effective than other vocational approaches in improving competitive work over 1-2 years in persons with severe mental illness. The authors evaluated the longer-term effects of the model compared with traditional vocational rehabilitation over 5 years. Method A randomized controlled trial compared supported employment to traditional vocational rehabilitation in 100 unemployed persons with severe mental illness. Competitive work and hospital admissions were tracked for 5 years, and interviews were conducted at 2 and 5 years to assess recovery attitudes and quality of life. A cost-benefit analysis compared program and total treatment costs to earnings from competitive employment. Results The beneficial effects of supported employment on work at 2 years were sustained over the 5-year follow-up period. Participants in supported employment were more likely to obtain competitive work than those in traditional vocational rehabilitation (65% compared with 33%), worked more hours and weeks, earned more wages, and had longer job tenures. Reliance on supported employment services for retaining competitive work decreased from 2 years to 5 years for participants in supported employment. Participants were also significantly less likely to be hospitalized, had fewer psychiatric hospital admissions, and spent fewer days in the hospital. The social return on investment was higher for supported employment participants, whether calculated as the ratio of work earnings to vocational program costs or of work earnings to total vocational program and mental health treatment costs. Conclusions The results demonstrate that the greater effectiveness of supported employment in improving competitive work outcomes is sustained beyond 2 years and suggest that supported employment programs contribute to reduced hospitalizations and produce a higher social return on investment.

Complete Genome Sequences of Virulent Mycoplasma capricolum subsp. capripneumoniae Strains F38 and ILRI181

Contagious caprine pleuropneumonia (CCPP) caused by Mycoplasma capricolum subsp. capripneumoniae is a severe epidemic affecting mainly domestic Caprinae species but also affects wild Caprinae species. M. capricolum subsp. capripneumoniae belongs to the "Mycoplasma mycoides cluster." The disease features prominently in East Africa, in particular Kenya, Tanzania, and Ethiopia. CCPP also endangers wildlife and thus affects not only basic nutritional resources of large populations but also expensively built-up game resorts in affected countries. Here, we report the complete sequences of two M. capricolum subsp. capripneumoniae strains: the type strain F38 and strain ILRI181 isolated druing a recent outbreak in Kenya. Both genomes have a G+C content of 24% with sizes of 1,016,760 bp and 1,017,183 bp for strains F38 and ILRI181, respectively.