intervention analysis with cointegrated time series the case of the hawaii hotel room tax tourism taxes have become an important source of revenue for many tourist destinations in the usa among the most widely used is the hotel room tax levied by 47 states and many localities room taxes are touted by proponents as a way to shift the local tax burden to non residents while the travel industry claims the levies signi cantly harm their competitiveness previous studies of room tax impacts have relied on ex ante estimates of demand and supply elasticities in this study we analyse the ea ect onhotel revenuesof the hawaiiroom tax using timeseries interventionanalysis we specify a time series model of revenue behaviour that captures the long run cointegrating relationships among revenues and important income and relative price

do individual investors treat trading as a fun and exciting gambling activity evidence from repeated natural experiments we hypothesize that individual investors treat trading as a fun and exciting gambling activity implying substitution between this activity and alternative gambling opportunities to examine this hypothesis we study the lottery jackpots and the trading of individual investors in taiwan when the jackpots exceed 500 million taiwan dollars the trading volume decreases between 5 2 and 9 1 among stocks preferred by individual investors and between 6 8 and 8 6 among lottery like stocks the decline in individual buy volume is statistically indistinct from the decline in sell volume large jackpots are associated with less trading in options with high sensitivity to volatility

tourism demand forecasting models choice of appropriate variable to represent tourists cost of living abstract price is generally regarded as a major determinant of demand tourism has two price elements the cost of travel to the destination and the cost of living for tourists in the destination previous studies where econometric forecasting models have been developed for international tourism demand usually take the consumer price index in a country to be a proxy for the cost of tourism in that country owing to lack of appropriate data this article attempts to evaluate the performance of proxy variables compared with a specific tourists cost of living variable within the context of tourism demand forecasting models

boys will still be boys gender differences in trading activity are not due to differences in over confidence abstract the fact that men trade more than women in financial markets has been attributed to men s overconfidence however evidence supporting this view is only indirect we directly test this conjecture experimentally by measuring confidence using monetary incentives before participants trade in a simulated market we find that men are more confident than women in our trading task men also trade more and they hold larger and less diversified portfolios than women however we do not find that differences in confidence explain any portion of the gender gap in trading activity we explore alternative candidate channels such as risk aversion financial literacy or competitiveness but find that these factors are also unlikely to play a role

losing money on the margin abstract margin trading is popular with retail investors around the world to limit the scale of these investors potential losses regulators impose a system of collateral requirements and margin calls we show in this paper however that the collateral requirement imposed by margin calls results in negative expected returns for these traders whilst also inducing positive skew in the returns distribution investments in assets with symmetric returns when traded on margin instead offer limited losses and a small chance of a large gain much like lottery stocks and other gambles we demonstrate this theoretically and then show empirically using a unique database of account data from a chinese retail brokerage that the realized losses of margin traders are often substantial this leads us to question whether current regulation is appropriate

trading as gambling this paper offers evidence from three different samples consistent with investors substituting between playing the lottery and gambling in financial markets in the united states increases in the jackpots of the multistate lotteries powerball and mega millions are associated with significant reductions in small trade participation in the stock market california based discount brokerage clients and german discount brokerage clients are significantly less likely to trade during weeks with larger lottery prizes in the california and german lotteries respectively variation in lottery prizes affects speculative trading in more lottery like securities such as individual stocks and options but not trading in bonds and mutual funds trading that is likely associated with long term savings motives such as trading in retirement accounts does not respond to lottery jackpots either the negative relation between trading activity and jackpots is stronger for individuals who are more likely to play the lottery this paper was accepted by brad barber finance

a micro analysis of business travel demand this study tests two hypothesis 1 that tax deductibility and the dual benefit nature of goods on the business pleasure borderline increases the demand for business travel and 2 that this dual benefit decreases price elasticity the study uses expenditure microdata and contrasts the behaviour of business travellers and pleasure travellers both groups are assumed to have indentical tastes but the expenditure behaviour of business travellers is modified by the role of the business trip as a factor of production the linear expenditure system les allocation model is applied to expenditures on individual goods at a particular tourist destination business travellers are shown to have higher expenditures than pleasure travellers for food lodging and local transportation minimum quantities estimated by the les are also higher for business travellers uncompensated price elasticities of business travellers are significantly smaller than that of pleasure travellers for local transportation clothing a

an empirical study of outbound tourism demand in the uk a general to specific methodology is used to construct uk demand for outbound tourism models to twelve destinations a tourism destination preference index is introduced to take into account social cultural and psychological influences on tourists decisions concerning their overseas holiday destinations the tests support the existence of a cointegration relationship for each of 11 uk overseas holiday destinations the corresponding error correction models are estimated the empirical results show that the long run income elasticities for all destinations range from 1 70 to 3 90 with an average of 2 367 the lowest and highest short run income elasticities are 1 05 and 3 78 respectively with an average of 2 216 the estimates of the income elasticities imply that overseas holidays are highly income elastic while the own price elasticities suggest that the demand for uk outbound tourism is relatively own price inelastic in terms of the significance of substitution prices in the regression equations ir

a new product growth for model consumer durables this article originally appeared in management science january 1969 volume 15 number 5 pp 215 227 published by the institute of management sciences a growth model for the timing of initial purchase of new products is developed and tested empirically against data for eleven consumer durables the basic assumption of the model is that the timing of a consumer s initial purchase is related to the number of previous buyers a behavioral rationale for the model is offered in terms of innovative and imitative behavior the model yields good predictions of the sales peak and the timing of the peak when applied to historical data a long range forecast is developed for the sales of color television sets

lottery players stock traders the behavior of stock traders and lottery buyers can teach us about our common aspirations thoughts and emotions and help answer many questions of finance

religious beliefs gambling attitudes and financial market outcomes this study investigates whether geographic variation in religion induced gambling norms affects aggregate market outcomes we conjecture that gambling propensity would be stronger in regions with higher concentrations of catholics relative to protestants consistent with our conjecture we show that in regions with higher catholic protestant ratios investors exhibit a stronger propensity to hold lottery type stocks broad based employee stock option plans are more popular the initial day return following an initial public offering is higher and the magnitude of the negative lottery stock premium is larger collectively these results indicate that religion induced gambling attitudes impact investors portfolio choices corporate decisions and stock returns

do investors put their money where their mouth is stock market expectations and investing behavior there is a large gap between what finance models predict for individual investor behavior and what can be observed in their actual behavior portfolio theory assumes that investors form expectations about return and risk of securities and select portfolios according to their expectations and risk preferences as a consequence they should hold broadly diversified portfolios and trade very little but instead private investors have been shown to hold underdiversified portfolios to trade frequently to take high idiosyncratic risk and to gamble in the stock market to understand this striking differences the investment process itself needs greater scrutiny how do real investors use their beliefs and preferences in investing decisions we examine this question using a panel survey of self directed online investors at a uk bank the survey asks for return expectations risk expectations and risk tolerance of these investors in three month intervals between 2008 and 2010 we combine the survey data with investors actual trading data and portfolio holdings we find that investor beliefs have little predictive power for immediate trading behavior however portfolio risk levels and changes are systematically related to return and risk expectations in line with financial theory risk taking increases with return expectations and decreases with risk expectations

judgemental overconfidence self monitoring and trading performance in an experimental financial market we measure the degree of overconfidence in judgment in the form of miscalibration i e the tendency to overestimate the precision of one s information and self monitoring a form of attentiveness to social cues of 245 participants and also observe their behaviour in an experimental financial market under asymmetric information miscalibrated traders underestimating the conditional uncertainty about the asset value are expected to be especially vulnerable to the winner s curse high self monitors are expected to behave strategically and achieve superior results our empirical results show that miscalibration reduces and self monitoring enhances trading performance the effect of the psychological variables is strong for men but non existent for women

the welfare effects of lotto evidence from the uk abstract this paper estimates the demand for lottery tickets using pooled cross section data that contain individual incomes and extensive information about characteristics one of the cross sections corresponded to a draw which was a double rollover the jackpot was enhanced by adding the two previous draws jackpots which had not been won together these datasets provide sufficient observations facing different prices to allow us to estimate the price elasticity as well as the income elasticity of demand we estimate tobit and other specifications and use the estimates to evaluate the welfare effects arising from the introduction of the lottery

when saving is gambling abstract prize linked savings pls accounts which allocate interest using lottery payments rather than fixed interest encourage savings by appealing to households gambling preferences i introduce new data on casino cash withdrawals to measure gambling and examine how individual gambling expenditures respond to the introduction of pls in nebraska using a difference in differences design after pls is introduced individuals who live in counties that offer pls reduce gambling by at least 3 more than unaffected individuals the substitution effect is stronger in low frills gambling environments which most resemble pls indicating that these accounts fulfill the desire to gamble

mobilizing private finance to drive an energy industrial revolution abstract while uptake of renewable energies as a solution to climate change is widely discussed the issue of public vs private financing is not yet adequately explored the debates over the kyoto protocol and its successor culminating in the cop15 climate change conference in copenhagen in december 2009 maintained a strong preference for public over private financing yet it is also clear to most observers that the energy revolution will never happen without the involvement of private finance to drive private investment in this viewpoint we discuss the ways in which private financing could be mobilized to drive the energy industrial revolution that is needed if climate change mitigation is to succeed

individual investor perceptions and behavior during the financial crisis combining monthly survey data with matching trading records we examine how individual investor perceptions change and drive trading and risk taking behavior during the 2008 2009 financial crisis we find that investor perceptions fluctuate significantly during the crisis with risk tolerance and risk perceptions being less volatile than return expectations during the worst months of the crisis investors return expectations and risk tolerance decrease while their risk perceptions increase towards the end of the crisis investor perceptions recover we document substantial swings in trading and risk taking behavior that are driven by changes in investor perceptions overall individual investors continue to trade actively and do not de risk their investment portfolios during the crisis

the role of information and social interactions in retirement plan decisions evidence from a randomized experiment this paper analyzes a randomized experiment to shed light on the role of information and social interactions in employees decisions to enroll in a tax deferred account tda retirement plan within a large university the experiment encouraged a random sample of employees in a subset of departments to attend a benee ts information fair organized by the university by promising a monetary reward for attendance the experiment multiplied by more than e ve the attendance rate of these treated individuals relative to controls and tripled that of untreated individuals within departments where some individuals were treated tda enrollment e ve and eleven months after the fair was signie cantly higher in departments where some individuals were treated than in departments where nobody was treated however the effect on tda enrollment is almost as large for individuals in treated departments who did not receive the encouragement as for those who did we provide three interpretations differential treatment effects social network effects and motivational reward effects to account for these results

participation and investment decisions in a retirement plan the influence of colleagues choices abstract this paper investigates whether peer effects play an important role in retirement savings decisions we use individual data from employees of a large university to study whether individual decisions to enroll in a tax deferred account plan sponsored by the university and the choice of the mutual fund vendor for people who choose to enroll are affected by the decisions of other employees in the same department to overcome the identification problems we divide the departments into sub groups along gender status age and tenure lines and we instrument the average participation of each peer group by the salary or tenure structure in this group our results suggest that peer effects may be an important determinant of savings decisions

decision making approaches and the propensity to default evidence and implications abstract this paper examines heterogeneity in the responsiveness to default options in a large state retirement plan focusing on individuals decision making approaches as well as their economic and demographic characteristics analyses of a survey of plan participants show that procrastination and the need for cognitive closure are important determinants of the likelihood of default this paper also explores an important implication of defaulting individuals who default are significantly more likely to subsequently express a desire to enroll in a different plan the desire to change plans is also correlated with numerous economic and decision making characteristics including procrastination

knowledge development in tourism tourism demand research abstract could tourism demand research be criticized as data hammering with little or no concern for theory development and testing this paper addresses this question by analyzing published studies on tourism demand for their contribution to knowledge building in the field results reveal that tourism demand research remains in its infancy

the short term price effect of a tourist tax through a dynamic demand model the case of the balearic islands abstract tourist taxes have become an important source of revenue for many tourist destinations taxes on accommodation are upheld by their proponents as a way of shifting the local tax burden on to non residents while the travel industry claims that these levies do significant damage to their level of competitiveness the objective of this paper is to identify the market s sensitivity to price changes in travel related services or groups of services assuming that one of the main factors that influences travel decisions is the information on the destination that consumers receive in order to include this effect the study applies a combination of a diffusion model and a traditional economic utility theory model to tourists visiting the balearic islands spain from the united kingdom germany france and the netherlands

why don t we agree evidence from a social network of investors we study sources of investor disagreement using sentiment of investors from a social media investing platform combined with information on the users investment approaches e g technical fundamental we examine how much of overall disagreement is driven by different information sets versus differential interpretation of information by studying disagreement within and across investment approaches overall disagreement is evenly split between both sources of disagreement but within group disagreement is more tightly related to trading volume than cross group disagreement although both sources of disagreement are important our findings suggest that information differences are more important for trading than differences across market approaches

probability weighting and employee stock options this paper documents that riskier firms with higher idiosyncratic volatility grant more stock options to nonexecutive employees standard models in the literature cannot easily explain this pattern a model in which a risk neutral firm and an employee with prospect theory preferences bargain over the employee s pay package can the key feature which makes stock options attractive is probability weighting the model fits the data on option grants well when calibrated using standard parameters from the experimental literature the results are the first evidence that risky firms can profitably use stock options to cater to an employee demand for long shot bets

individual reaction to past performance sequences evidence from a real marketplace we use novel data on individual activity in a sports betting market to study the effect of past performance sequences on individual behavior in a real market the idiosyncratic nature of risk in this market and the revelation of assets true terminal values enables us to disentangle whether behavior is caused by sentiment or by superior information about market mispricings and to cleanly test two prominent theories of momentum and reversals the regime shifting model of barberis et al barberis n shleifer a vishny r 1998 a model of investor sentiment j financial econom 49 3 307 343 and the gambler s hot hand fallacy model of rabin rabin m 2002 inference by believers in the law of small numbers quart j econom 117 3 775 816 furthermore our long panel enables us to study the prevalence across individuals of each type of behavior we find that i three quarters of individuals exhibit trend chasing behavior ii seven times as many individuals exhibit behavior consistent with barberis et

trading as entertainment among 1 000 german brokerage clients for whom both survey responses and actual trading records are available investors who report enjoying investing or gambling turn over their portfolio at twice the rate of their peers including entertainment attributes as additional explanatory variables in cross sectional regressions of portfolio turnover on objective investor attributes more than doubles the fraction of the total variation of portfolio turnover that can be explained the results are robust to controlling for gender and proxies for overconfidence constructed from survey responses nonpecuniary benefits of trading thus appear to offer a straightforward explanation of the excessive trading puzzle

what do retail fx traders learn what is the benefit of experience using data from a leading trading platform we find no evidence that retail fx traders learn to trade better but they do appear to learn about their innate abilities as traders and respond appropriately in particular following an unsuccessful trading day they are more likely to cease trading to trade smaller amounts and to trade less frequently these effects are stronger for younger and less experienced traders who might be expected to have more to learn than older more experienced traders as regards learning through experience surprisingly we find that more seasoned traders demonstrate a slight decline in performance once we account for the endogenous decision to cease trading and even very experienced traders consistently lose money