How do Young People Choose College Majors?

Previous studies on the determinants of the choice of college major have assumed a constant probability of success across majors or a constant earnings stream across majors. Our model disregards these two restrictive assumptions in computing an expected earnings variable to explain the probability that a student will choose a specific major among four choices of concentrations. The construction of an expected earnings variable requires information on the student s perceived probability of success, the predicted earnings of graduates in all majors and the student s expected earnings if he (she) fails to complete a college program. Using data from the National Longitudinal Survey of Youth, we evaluate the chances of success in all majors for all the individuals in the sample. Second, the individuals' predicted earnings of graduates in all majors are obtained using Rumberger and Thomas's (1993) regression estimates from a 1987 Survey of Recent College Graduates. Third, we obtain idiosyncratic estimates of earnings alternative of not attending college or by dropping out with a condition derived from our college major decision-making model applied to our sample of college students. Finally, with a mixed multinominal logit model, we explain the individuals' choice of a major. The results of the paper show that the expected earnings variable is essential in the choice of a college major. There are, however, significant differences in the impact of expected earnings by gender and race.

Apreçamento da assimetria idiossincrática no mercado brasileiro de ações

Recent papers in finance presented models in which the idiosyncratic skewness is a priced component of security returns. More specifically, stocks with high expected idiosyncratic skewness should have low expected returns. Boyer, Mitton and Vorkink (2009) showed that it actually happens in the American stock market. The goal of this thesis is to verify if this actually happens in the Brazilian stock market. The result, however, was different than expected: stocks with high expected idiosyncratic skewness have high expected returns. Among the possible explanations for this behavior are the difficult to predict idiosyncratic skewness and even failures in the construction of estimates of idiosyncratic skewness, which are calculated from the residuals of the Fama-French three-factor model.

DSGE model with banking sector for emerging economies : estimated using Bayesian methodology for Brazil

Economias emergentes sofrem importantes restrições de crédito quando comparadas com economias desenvolvidas, entretanto, modelos estocásticos de equilíbrio geral (DSGE) desenhados para economias emergentes ainda precisam avançar nessa discussão. Nós propomos um modelo DSGE que pretende representar uma economia emergente com setor bancário baseado em Gerali et al. (2010). Nossa contribuição é considerar uma parcela da renda esperada como colateral para empréstimos das famílias. Nós estimamos o modelo proposto para o Brasil utilizando estimação Bayesiana e encontramos que economias que sofrem restrição de colateral por parte das famílias tendem a sentir o impacto de choques monetários mais rapidamente devido a exposição do setor bancário a mudanças no salário esperado.

Zum Einfluss vorschulischer Kinderbetreuung auf den Bildungsweg und den erwarteten Erfolg am Arbeitsmarkt

In dem Beitrag wird der Frage nachgegangen, welchen Einfluss die Inanspruchnahme frühkindlicher Bildungs- und Betreuungsangebote auf den späteren Schulbesuch von Kindern hat und wie sich dies längerfristig auf die zu erwartenden Lebenseinkommen und damit einhergehend den langfristigen volkswirtschaftlichen Nutzen auswirkt. Untersucht werden Kinder in Deutschland der Jahrgänge 1990 bis 1995. Die Datengrundlage liefert das Sozio-oekonomische Panel (SOEP). Der Schwerpunkt der Analysen liegt auf der Bestimmung des Effekts des Krippenbesuchs auf die spätere Einstufung in die verschiedenen Schultypen in Abhängigkeit der sozialen Herkunft und des Migrationshintergrunds der Kinder. Ausgehend von diesen Schätzungen werden dann die zu erwartenden, über den Bildungsabschluss vermittelten Auswirkungen des Krippenbesuchs auf das spätere Lebenseinkommen bestimmt, um einen Eindruck der langfristigen volkswirtschaftlichen Folgen vorschulischer Kinderbetreuung zu erhalten. Der Beitrag zeigt, dass der Krippenbesuch die Wahrscheinlichkeit einer Einstufung ins Gymnasium nach Kontrolle relevanter Drittvariablen im Schnitt um rund 14 Prozentpunkte erhöht. Dieser Einfluss entspricht einem erwarteten Lebenseinkommenszuwachs von rund 27000 Euro. Wird dieser Ertrag auf den Zeitpunkt des Krippenbesuchs abdiskontiert und den Kosten eines durchschnittlichen Krippenbesuchs in der Höhe von rund 8000 Euro gegenübergestellt, so ergibt sich ein Kosten-Nutzen-Verhältnis von 1 zu 2.7. (DIPF/Orig.).

Leverage, Volatile Future Earnings Growth and Expected Stock Returns

We provide theory and evidence to complement Choi's [RFS, 2013] important new insights on the returns to equity in `value' firms. We show that higher future earnings growth ameliorates the value-reducing effect of leverage and, because the market for earnings is incomplete, reduces the earnings-risk sensitivity of the default option. Ceteris paribus, a levered firm with low (high) earnings growth is more sensitive to the first (second) of these effects thus generating higher (lower) expected returns. We demonstrate this by modeling equity as an Asian-style call option on net earnings and find significant empirical support for our hypotheses.

The effect of national governance codes on firm disclosure practices : evidence from analyst earnings forecasts

This study examines whether voluntary national governance codes have a significant effect on company disclosure practices. Two direct effects of the codes are expected: 1) an overall improvement in company disclosure practices, which is greater when the codes have a greater emphasis on disclosure; and 2) a leveling out of disclosure practices across companies (i.e., larger improvements in companies that were previously poorer disclosers) due to the codes new comply-or-explain requirements. The codes are also expected to have an indirect effect on disclosure practices through their effect on company governance practices. The results show that the introduction of the codes in eight East Asian countries has been associated with lower analyst forecast error and a leveling out of disclosure practices across companies. The codes are also found to have an indirect effect on company disclosure practices through their effect on board independence. This study shows that a regulatory approach to improving disclosure practices is not always necessary. Voluntary national governance codes are found to have both a significant direct effect and a significant indirect effect on company disclosure practices. In addition, the results indicate that analysts in Asia do react to changes in disclosure practices, so there is an incentive for small companies and family-owned companies to further improve their disclosure practices.

The impact of regulatory reforms on the earnings forecasting behaviour of IPO firms

Purpose – The purpose of this paper is to jointly assess the impact of regulatory reform for corporate fundraising in Australia (CLERP Act 1999) and the relaxation of ASX admission rules in 1999, on the accuracy of management earnings forecasts in initial public offer (IPO) prospectuses. The relaxation of ASX listing rules permitted a new category of new economy firms (commitments test entities (CTEs))to list without a prior history of profitability, while the CLERP Act (introduced in 2000) was accompanied by tighter disclosure obligations and stronger enforcement action by the corporate regulator (ASIC). Design/methodology/approach – All IPO earnings forecasts in prospectuses lodged between 1998 and 2003 are examined to assess the pre- and post-CLERP Act impact. Based on active ASIC enforcement action in the post-reform period, IPO firms are hypothesised to provide more accurate forecasts, particularly CTE firms, which are less likely to have a reasonable basis for forecasting. Research models are developed to empirically test the impact of the reforms on CTE and non-CTE IPO firms. Findings – The new regulatory environment has had a positive impact on management forecasting behaviour. In the post-CLERP Act period, the accuracy of prospectus forecasts and their revisions significantly improved and, as expected, the results are primarily driven by CTE firms. However, the majority of prospectus forecasts continue to be materially inaccurate. Originality/value – The results highlight the need to control for both the changing nature of listed firms and the level of enforcement action when examining responses to regulatory changes to corporate fundraising activities.

Ownership structure and concentration and the timeliness of corporate earnings : Malaysian evidence

This thesis provides the first evidence on how ownership concentration and structure relate to the timeliness of price discovery and reporting lags in Malaysia. Based on a sample of 1,276 Malaysian firms from 1996 to 2009, the results show that ownership concentration and the identity of the largest shareholder matter to the timeliness of price discovery and reporting lags. Specifically, closely-held firms are more timely in their price discovery and have shorter reporting lags, particularly if the largest shareholder is a foreigner or a financial institution. Government-owned firms have longer reporting lags, as expected, but we find no evidence that family-owned firms have significantly different timeliness of price discovery and reporting lags than other firms. Additional analysis shows that prior to the implementation of the Malaysian Code of Corporate Governance, firms were more timely in their price discovery but longer in their reporting lag.

Are Idiosyncratic Skewness and Idiosyncratic Kurtosis Priced?

This thesis investigates the pricing effects of idiosyncratic moments. We document that idiosyncratic moments, namely idiosyncratic skewness and idiosyncratic kurtosis vary over time. If a factor/characteristic is priced, it must show minimum variation to be correlated with stock returns. Moreover, we can identify two structural breaks in the time series of idiosyncratic kurtosis. Using a sample of US stocks traded on NYSE, AMEX and NASDAQ markets from January 1970 to December 2013, we run Fama-MacBeth test at the individual stock level. We document a negative and significant pricing effect of idiosyncratic skewness, consistent with the finding of Boyer et al. (2010). We also report that neither idiosyncratic volatility nor idiosyncratic kurtosis are consistently priced. We run robustness tests using different model specifications and period sub-samples. Our results are robust to the different factors and characteristics usually included in the Fama-MacBeth pricing tests. We also split first our sample using endogenously determined structural breaks. Second, we divide our sample into three equal sub-periods. The results are consistent with our main findings suggesting that expected returns of individual stocks are explained by idiosyncratic skewness. Both idiosyncratic volatility and idiosyncratic kurtosis are irrelevant to asset prices at the individual stock level. As an alternative method, we run Fama-MacBeth tests at the portfolio level. We find that idiosyncratic skewness is not significantly related to returns on idiosyncratic skewness-sorted portfolios. However, it is significant when tested against idiosyncratic kurtosis sorted portfolios.

Are Idiosyncratic Skewness and Idiosyncratic Kurtosis Priced?

This thesis investigates the pricing effects of idiosyncratic moments. We document that idiosyncratic moments, namely idiosyncratic skewness and idiosyncratic kurtosis vary over time. If a factor/characteristic is priced, it must show minimum variation to be correlated with stock returns. Moreover, we can identify two structural breaks in the time series of idiosyncratic kurtosis. Using a sample of US stocks traded on NYSE, AMEX and NASDAQ markets from January 1970 to December 2013, we run Fama-MacBeth test at the individual stock level. We document a negative and significant pricing effect of idiosyncratic skewness, consistent with the finding of Boyer et al. (2010). We also report that neither idiosyncratic volatility nor idiosyncratic kurtosis are consistently priced. We run robustness tests using different model specifications and period sub-samples. Our results are robust to the different factors and characteristics usually included in the Fama-MacBeth pricing tests. We also split first our sample using endogenously determined structural breaks. Second, we divide our sample into three equal sub-periods. The results are consistent with our main findings suggesting that expected returns of individual stocks are explained by idiosyncratic skewness. Both idiosyncratic volatility and idiosyncratic kurtosis are irrelevant to asset prices at the individual stock level. As an alternative method, we run Fama-MacBeth tests at the portfolio level. We find that idiosyncratic skewness is not significantly related to returns on idiosyncratic skewness-sorted portfolios. However, it is significant when tested against idiosyncratic kurtosis sorted portfolios.

Assessing earnings management in european publicly traded firms

We investigate if investors may benefit from using the accruals quality measure to assess the level of earnings management exercised by firms when preparing their accounting statements. More earnings management is expected to be associated with high information asymmetry among stock market participants because it makes earnings information less precise, thus providing an information advantage to informed investors relative to liquidity traders. Our results based on a sample of European publicly traded firms are consistent with a positive association between earnings management and information asymmetry. However, given some previous studies suggesting that accruals based measures may be noisy indicators of earnings management we further develop and test a method to enhance the performance of accruals quality in detecting earnings management.

Assessing Earnings Management in European Publicly Traded Firms

We investigate if investors may benefit from using the accruals quality measure to assess the level of earnings management exercised by firms when preparing their accounting statements. More earnings management is expected to be associated with high information asymmetry among stock market participants because it makes earnings information less precise, thus providing an information advantage to informed investors relative to liquidity traders. Our results based on a sample of European publicly traded firms are consistent with a positive association between earnings management and information asymmetry. However, given some previous studies suggesting that accruals based measures may be noisy indicators of earnings management we further develop and test a method to enhance the performance of accruals quality in detecting earnings management

Year 6 students' idiosyncratic notions of unitising, reunitising and regrouping decimal number places

Having flexible notions of the unit (e.g., 26 ones can be thought of as 2.6 tens, 1 ten 16 ones, 260 tenths, etc.) should be a major focus of elementary mathematics education. However, often these powerful notions are relegated to computations where the major emphasis is on "getting the right answer" thus procedural knowledge rather than conceptual knowledge becomes the primary focus. This paper reports on 22 high-performing students' reunitising processes ascertained from individual interviews on tasks requiring unitising, reunitising and regrouping; errors were categorised to depict particular thinking strategies. The results show that, even for high-performing students, regrouping is a cognitively complex task. This paper analyses this complexity and draws inferences for teaching.