the employers cost of workers compensation insurance magnitudes determinants and public policy new estimates of the average cost of workers compensation insurance for a homogeneous group of employers by state are presented these data are used to estimate cost equations for a variety of alternative specifications the main finding is that when cost equations are estimated by ordinary least squares there is a unit elasticity of costs with respect to benefits but instrumental variable estimates of the effect of benefits yield a greater than unit elasticity finally the presence of a state insurance fund is associated with higher average costs for employers all else equal copyright 1990 by mit press

the changing time series properties of earnings cash flows and accruals has financial reporting become more conservative abstract this paper documents changes in the patterns of earnings cash flows and accruals over the last four decades in the absence of a generally accepted definition of conservatism a number of measures of reporting conservatism are identified and examined these measures rely on the accumulation of nonoperating accruals the timeliness of earnings with respect to bad and good news characteristics of the earnings distribution and the market to book ratio the patterns are consistent with an increase in conservative financial reporting over time the findings have implications for accounting standard setting regulation of financial information and financial statement analysis

an earnings prediction approach to examining intercompany information transfers abstract we assess potential information transfers by examining the association between the earnings announcements of early and late announcers in an industry our earnings prediction models are statistically significant much more frequently than would be expected by chance the models suggest potential positive information transfers on average but there is substantial cross industry variation in the strength of this relation we find that the greatest price reactions by nonannouncers to same industry earnings announcements occur in industries with the greatest earnings comovement

land use and economic effects of alternative biofuel policies in brazil and the united states being the two largest ethanol producers in the world biofuel policies in brazil and the united states affect both their domestic markets and the global food and biofuel economy in this article we develop a price endogenous mathematical programming model to simulate and analyze the impacts of biofuel mandates and trade distortions on land use agricultural commodity and transportation fuel markets and global environment we find that an 80 increase in total biofuel production from its 103 billion liter baseline level to the mandated 183 billion liter level in 2022 can be achieved with less than 2 increase in total cropland use in both countries in the united states this would occur with cellulosic biofuels meeting nearly half of the biofuels consumed and produced largely on cropland pasture and corn ethanol meeting the rest of the mandate and resulting in a 2 increase in corn price in brazil the expansion in sugarcane production would be achieved by reducing land under pasture and a marginal increase in intensification of livestock production in the aggregate biofuel policies increase economic surplus in both countries by 1 and redistribute the benefits from agricultural consumers to agricultural producers and the fuel sector finally we also find that full implementation of the mandates in north america china and the european union would reduce the global life cycle global greenhouse gas emissions by about 5

endogenous information flows and the clustering of announcements we consider the strategic timing of information releases in a dynamic disclosure model because investors don t know whether or when the firm is informed the firm will not necessarily disclose immediately we show that bad market news can trigger the immediate release of information by firms conversely good market news slows the release of information by firms thus our model generates clustering of negative announcements surprisingly this result holds only when firms can preemptively disclose their own information prior to the arrival of external information these results have implications for conditional variance and skewness of stock returns jel d21 d83 g12 g14 l11

the induced innovation hypothesis and energy saving technological change we develop a methodology for testing hicks s induced innovation hypothesis by estimating a product characteristics model of energy using consumer durables augmenting the hypothesis to allow for the ine uence of government regulations for the products we explored the evidence suggests that i the rate of overall innovation was independent of energy prices and regulations ii the direction of innovation was responsive to energy price changes for some products but not for others iii energy price changes induced changes in the subset of technically feasible models that were offered for sale iv this responsiveness increased substantially during the period after energy efficiency product labeling was required and v nonetheless a sizable portion of efficiency improvements were autonomous

separating the reporting effects from the injury rate effects of workers compensation insurance a hedonic simulation this paper presents a numerical simulation based on data from the early 1970s to investigate the economic links between labor market outcomes and the workers compensation insurance system the results suggest that in most cases any of three changes in the system more generous benefits more accurate categorization of insurance claims or more complete experience rating of premiums will slightly reduce the actual number of work related injuries but will dramatically increase the number of insurance claims filed the authors conclude that changes in self reported injuries can produce significant misimpressions of the safety incentives created by the workers compensation insurance system

substitution between unemployment insurance and workers compensation abstract this paper extends the literature on post injury duration of absence from work by developing a model that incorporates substitution between unemployment insurance benefits and workers compensation a theoretical analysis is presented in which the worker maximizes expected utility over four possible states of nature the model is tested empirically using pooled cross section and time series data at the two digit industry level the main findings support the predictions of the model an increase in workers compensation benefits increases the average duration of accidents with an elasticity of 0 9 1 4 while an increase in unemployment insurance payments reduces the average duration of accidents with an elasticity of 0 5 0 7

understanding the reductions in us corn ethanol production costs an experience curve approach the us is currently the world s largest ethanol producer an increasing percentage is used as transportation fuel but debates continue on its costs competitiveness and energy balance in this study technological development of ethanol production and resulting cost reductions are investigated by using the experience curve approach scrutinizing costs of dry grind ethanol production over the timeframe 1980 2005 cost reductions are differentiated between feedstock corn production and industrial ethanol processing corn production costs in the us have declined by 62 over 30 years down to 100 2005 tonne in 2005 while corn production volumes almost doubled since 1975 a progress ratio pr of 0 55 is calculated indicating a 45 cost decline over each doubling in cumulative production higher corn yields and increasing farm sizes are the most important drivers behind this cost decline industrial processing costs of ethanol have declined by 45 since 1983 to below 130 2005 m3 in 2005 excluding costs for corn and capital equivalent to a pr of 0 87 total ethanol production costs including capital and net corn costs have declined approximately 60 from 800 2005 m3 in the early 1980s to 300 2005 m3 in 2005 higher ethanol yields lower energy use and the replacement of beverage alcohol based production technologies have mostly contributed to this substantial cost decline in addition the average size of dry grind ethanol plants increased by 235 since 1990 for the future it is estimated that solely due to technological learning production costs of ethanol may decline 28 44 though this excludes effects of the current rising corn and fossil fuel costs it is also concluded that experience curves are a valuable tool to describe both past and potential future cost reductions in us corn based ethanol production

systematic share price fluctuations after bankruptcy filings and the investors who drive them beginning in the 1990s firms often continue to trade on the major national exchanges after chapter 11 bankruptcy filings for bankruptcies filed from 1993 2003 we find that the more negative the filing period price reaction the more favorable the immediate post filing returns on average this reversal is not attributable to bid ask bounce it holds after controlling for other factors associated with post filing returns and it appears more attributable to the activities of large traders than to small traders supplementary tests reveal that the pattern of post filing returns differs significantly for bankruptcies filed in bull versus bear markets bankruptcies filed during the 1993 to 1999 bull market enjoy substantial but short lived reversals averaging one third of the filing period price plunge these reversals are inconsistent with efficient assimilation of the bankruptcy information in contrast we find no evidence of post filing reversals for bankruptcies filed from 2000 to 2003

an economic perspective on experience curves and dynamic economies in renewable energy technologies this paper analyzes dynamic economies in renewable energy technologies the paper has two contributions the first is to test the robustness of experience in solar photovoltaic solar thermal and wind energy to the addition of an explicit time trend which has been done in experience studies for other industries but not for renewable energy technologies estimation is carried out on the assumption that cumulative capacity industry production average firm production and electricity generation affect experience and thus the fall in price the second contribution is to test the impact of r d on price reduction in general cumulative experience is found to be highly statistically significant when estimated alone and highly statistically insignificant when time is added to the model the effect of r d is small and statistically significant in solar photovoltaic technology and statistically insignificant in solar thermal and wind technologies

unsystematic security price movements management earnings forecasts and revisions in consensus analyst earnings forecasts empirical evidence suggests that information about a firm s future earnings prospects is important to investors griffin 1976 givoly and lakonishok 1979 1980 and imhoff and lobo 1984 reported statistically significant abnormal stock returns before at and after announcements of analyst earnings forecast revisions in addition imhoff and lobo documented positive correlation between the magnitudes of the forecast revisions and the abnormal returns these findings are consistent with the hypothesis that investors find analyst forecast revisions informative another source of information about future earnings is projections from corporate officials several studies have found unsystematic stock price changes prior to and or immediately surrounding the public release of management earnings forecasts e g foster 1973 nichols and tsay 1979 patell 1976 jaggi 1978 penman 1980 and waymire 1984 the conclusion from this research is that management forecasts also convey information to investors

an economic model of welfare stigma perhaps the most basic assumption of the economic theory of consumer demand is that more is better than less virtually all of the major propositions of consumer theory can in a certain sense be derived from the assumption that goods are good interestingly however this tenet seems to be violated by the behavior of many individuals in the low income population for many turn out to be eligible for a positive welfare benefit but do not in fact join the welfare rolls for example it has been estimated that in 1970 only about 69 percent of the families eligible for afdc aid to families with dependent children participated in the program see richard michel 1980 the corresponding percentage for afdc u the program for which families with an unemployed male are eligible was only 43 percent and the participation rate in the food stamp program was only 38 percent see maurice mcdonald 1977 this phenomenon has puzzled many investigators because such individuals do not locate on the boundaries of their budget sets consequently most investigators ignore the problem when studying the effects of welfare programs on behavior in this paper this seemingly irrational rejection of an increase in income is modeled as resulting from welfare stigma that is from disutility arising from participation in a welfare program per se 1 the existence of stigma has been amply documented in the sociological literature patrick horan and patricia austin 1974 lee rainwater 1979 where interviews of recipients have often uncovered feelings of lack of self respect and negative self characterizations from participation in welfare nevertheless this phenomenon has not been modeled and many questions consequently remain when is the disutility of participation strong enough to prevent participation shouldn t we expect individuals to weigh the disutility of participation against the potential benefit in their decisions what is the elasticity of participation with respect to the potential benefit also in a slightly different vein how are the work disincentives of welfare affected by stigma these questions have been given scant attention by economists yet they are crucial for our ability to predict the impact of various welfare programs on the lowincome population here these questions are addressed by modeling nonparticipation as a utility maximizing decision the model is developed and estimated for the afdc program 2 the model posits an individual utility function containing not just disposable income but

technical change dynamics evidence from the emerging renewable energy technologies abstract this paper explores the respective contributions of the effects of learning and returns to scale in the capital costs reduction pattern experienced by renewables causality analysis and econometric estimation of learning curves are performed on two emerging renewable energy technologies namely pv and wind learning effects appear as an essential driving force a result which concurs with the widely acknowledged importance of experience in technical progress inherent to economic growth the existence of non constant and flexible returns to scale are further highlighted their effect on diffusion dynamics is shown to be potentially considerable particularly at the outset of innovation deployment however returns to scale are suggested to be constant in the long term institutional commitment in supporting innovation therefore seems justified both on the basis of the occurrence of learning effects and diseconomies of scale these findings appear to be essential to the dynamics of innovation diffusion and market structure

autocorrelation structure of forecast errors from time series models alternative assessments of the causes of post earnings announcement drift abstract this paper demonstrates that the evidence supporting the hypothesis that post earnings announcement drift pead is caused by investors failure to incorporate the implications of current earnings for future earnings is also consistent with researchers over differencing an already stationary time series specifically we show the evidence is driven by a subset of firms where over differencing of quarterly earnings in estimating earnings surprises is most likely to have occurred given the persistence of the pead over time our alternative explanation suggests that the prior research investigating the causes for the pead overestimates investors naivete

technological learning in energy environment economy modelling a survey abstract this paper aims at providing an overview and a critical analysis of the technological learning concept and its incorporation in energy environment economy models a special emphasis is put on surveying and discussing through the so called learning curve both studies estimating learning rates in the energy field and studies incorporating endogenous technological learning in bottom up and top down models the survey of learning rate estimations gives special attention to interpreting and explaining the sources of variability of estimated rates which is shown to be mainly inherent in r d expenditures the problem of omitted variable bias the endogeneity relationship and the role of spillovers large scale models survey show that despite some methodological and computational complexity related to the non linearity and the non convexity associated with the learning curve incorporation results of the numerous modelling experiments give several new insights with regard to the analysis of the prospects of specific technological options and their cost decrease potential bottom up models and with regard to the analysis of strategic considerations especially inherent in the innovation and energy diffusion process in particular the energy sector s endogenous responses to environment policy instruments top down models

are recessions good for workplace safety empirical evidence shows that in recessions the rate of workplace accidents goes down this paper presents a theory and an empirical investigation to explain this phenomenon the theory is based on the idea that reporting an accident affects the reputation of a worker and raises the probability that he is fired if the unemployment rate is high a worker faces a big loss when fired and fewer workplace accidents are reported the empirical investigation concerns workplace accidents in 16 oecd countries we conclude that cyclical fluctuations in workplace accident rates have to do with reporting behavior of workers and not with changes in workplace safety

a comparison of the skewness of stock return distributions at earnings and non earnings announcement dates abstract this paper presents evidence that stock return prediction errors are less positively skewed in the time period surrounding accounting earnings report announcements than in a subsequent non announcement period assuming that information available about firms in non announcement periods depends on discretionary disclosure practices of firms and discretionary search for information by investors the results suggest that earnings reports cause more extreme bad news to be reflected in stock prices relative to discretionary sources of information

international competitiveness technical change and the state the machine tool industry in taiwan and japan abstract it is widely accepted that the growth performance of japan and the asian newly industrialized countries hong kong singapore south korea and taiwan is partly the result of the international competitiveness they have achieved in a number of export industries it remains however to explain how this competitiveness was achieved in the first part of the paper an attempt at such an explanation based on the theory of comparative advantage is critically examined it is argued that while this explanation does have some explanatory power it does not deal adequately with a the role of technical and productivity change b the causal mechanisms underlying economic growth and c the role of the state the rest of the paper examines the case of machine tools in taiwan and japan showing the importance of these three factors as well as a number of others as determinants of international competitiveness the paper ends with a discussion of policy dilemmas relating to international competitiveness in the taiwanese machine toot industry

hmos moral hazard and cost shifting in workers compensation abstract previous research has shown that workers respond to the economic incentives provided in workers compensation in particular claim frequency rises with increased benefits and claim duration on net seems to increase here we provide additional evidence of another incidence of behavioral responses to incentives we find that doctors in health maintenance organizations hmos have a greater tendency to classify claims as compensable under workers compensation than do other physicians our evidence suggests that the rapid expansion of hmos over the 1980 1990 period resulted in a significant increase in workers compensation claim frequency

explaining the reductions in us corn ethanol processing costs testing competing hypotheses abstract the processing costs of us corn ethanol have declined by 45 since 1983 as production volumes have increased seventeen fold we investigate the role of various factors that could explain this including economies of scale cumulative experience induced innovation in response to rising input prices an autonomous technological change and trade induced competition from imported ethanol using data on dry mill ethanol processing costs over the 1983 2005 period we find evidence to show that us corn ethanol production exhibited decreasing returns to scale that learning by doing played an important role in reducing these processing costs with a learning rate of 0 25 and that sugarcane ethanol imports contributed to making the corn ethanol industry more competitive other factors such as the rising prices of energy and labor did induce lower processing costs but the effect is not statistically significant the inclusion of these competing explanations for the reduction in processing costs of us corn ethanol lead to a significantly higher learning rate than otherwise and this learning rate is found to be robust across specifications

induced innovation and energy prices this paper uses u s patent data from 1970 to 1994 to study the impact of energy prices on energy efficient innovations theories of technological change have focused both on demand side factors which spur innovative activity by increasing the value of new innovations and supply side factors such as scientific advancements that make new innovations possible data on demand side factors are easily obtained but data on supply side factors that influence innovation are not readily available this paper uses patent citations as a measure of the usefulness of the existing base of scientific knowledge citations to previous patents are used to construct productivity estimates which measure the usefulness of the existing stock of knowledge to inventors in a given energy field for any given year these estimates are then combined with data on demand side factors to estimate a model of induced innovation in energy technologies the results indicate that both energy prices and the supply of knowledge have strongly significant positive effects on innovation the paper concludes with a discussion of the implication of this work for environmental policy

insider trading earnings changes and stock prices this study empirically examines the relation between reportable insider trading and the information captured by annual unexpected earnings for a large sample of firms spanning a ten year period 1978 87 each observation is assigned to one of four groups based on the direction of net insider trading buy sell and the sign of unexpected earnings for each of these groups 15 month cumulative abnormal returns are regressed on annual unexpected earnings the slope coefficient is the largest for the group where insiders are net purchasers and the sign of unexpected earnings is positive this is consistent with an inference that insider buying interactively confirms the favorable information captured by positive unexpected earnings and this interaction reduces the noise in unexpected earnings the result with regard to the unfavorable information captured by the group with insider selling and negative unexpected earnings is similar but less pronounced the analysis also suggests that insider trading conveys information not fully captured by the year s earnings

the multiperiod information content of accounting earnings confirmations and contradictions of previous earnings reports in this study we propose and test the hypothesis that investors reevaluate earnings announcements in the light of postannouncement information 1 our argument for multiperiod price reactions to earnings news is motivated by the literature linking price responses to earnings persistence 2 when earnings are announced we assume that investors are unable to determine with certainty the persistence of an earnings

how naive is the market s use of firm specific earnings information recent studies suggest the apparent delay in the stock price response to earnings announcements i e post earnings announcement drift is caused by investors who underestimate the autocorrelation of seasonally differenced earnings persistence i present results that suggest 1 a firm s future persistence is predictable on the basis of its past persistence 2 the immediate stock price response to earnings is positively related to historical persistence 3 post earnings announcement drift is independent of historical persistence and 4 consistent with 2 and 3 the difference between a firm s current observed persistence and that implied in stock prices is independent of its historical persistence these results extend prior research by demonstrating that investors are aware not only that seasonally differenced earnings are autocorrelated but that investors recognize firm specific differences in the magnitude of the autocorrelation

book rate of return and prediction of earnings changes an empirical investigation over the years there has developed a fairly substantial body of research on the time series of earnings as a whole this literature concludes that changes in annual accounting earnings are unpredictable that is earnings follow a random walk 1 based on this result some inferences of economic substance policy have been claimed 2 in this paper we reconsider empirical issues which at least to some extent have been obscured by this conclusion we argue that the above result is only true in a limited sense since a modest enlargement of the predictive information set should allow for a rejection of the hypothesis that earnings changes are