multivariate count data regression models with individual panel data from an on site sample the purpose of this paper is to consider the problem of controlling for on site sampling in the context of a system or panel of demand equations specifically in the context of recreation demand we are concerned with the situation in which survey respondents are asked to provide information not only about the actual trips to a specific site observed behavior but also their anticipated trips either under current conditions or given price and quality changes a multivariate poisson log normal mpln model and a seemingly unrelated negative binomial sunb model are used to jointly model the observed and contingent behavior data and to correct for on site sampling

models for referendum data the structure of discrete choice models for contingent valuation abstract in 1979 bishop and heberlein introduced an appealing variant of the contingent valuation method which required only yes or no responses hanemann developed a utility theoretic interpretation of the yes no responses which has helped popularize the approach recently cameron has offered another interpretation also utility theoretic which she argues is more general than the hanemann random utility model this paper compares the deterministic models suggested by hanemann and cameron showing them to be dual to each other it shows that correct specification of either function must exclude endogenous variables such as quantity demanded it also demonstrates that using utility theoretic models allows one to compare travel cost models and contigent valuation models on the basis of their implied behavior not on the unobservable surplus or variation measure

clustering and competition in asset markets economists financial commentators regulatory agencies and the legal community have recently criticized the nasdaq stock market inc because there is greater clustering of stock quotations on even eighths on nasdaq than on the new york stock exchange or the american stock exchange a phenomenon which critics attribute to collusion or some other defect in nasdaq market structure however as this article demonstrates clustering occurs in varying degrees in many other incontestably competitive financial markets including the nyse the amex the london stock exchange the london gold market and the international foreign exchange market this article provides a competitive theory of clustering that emphasizes the effect of uncertainty the size of transactions volatility and the informational and transactional roles of quotations on the degree of clustering in addition the article examines how market structure can affect the degree of clustering and considers the relation between clustering spread

arbitrary values good causes and premature verdicts abstract this paper offers an alternative interpretation of the conclusions kahneman and knetsch propose based on two contingent valuation cvm surveys the evaluation argues that while framing is important to cvm estimates the design implementation and empirical findings reported from these surveys do not support their judgments moreover with the exception of temporal embedding conventional economic descriptions of individual behavior can explain the response patterns that they suggest are at variance with standard value theory

rates of time preference and consumer valuations of automobile safety and fuel efficiency this article estimates hedonic price models for automobiles using a data set on almost 3 000 households from the u s department of energy residential transportation energy consumption survey the standard hedonic models are generalized to recognize the role of discounting of fuel efficiency and safety yielding an estimated rate of time preference ranging from 11 to 17 percent this range includes the prevailing rate of interest for car loans in 1988 and is consequently consistent with market rates purchasers exhibit an implicit value of life ranging from 2 6 to 3 7 million which is within the range found in the labor market as well as other market contexts the model also estimates a significant price effect for auto injury risks and fuel efficiency

using revealed preferences to estimate the value of travel time to recreation sites the opportunity value of travel time vtt is one of the most important elements of the total cost of recreation day trips and arguably the most difficult to estimate most studies build upon the theoretical framework proposed by becker 1965 by using a combination of revealed and stated preference data to estimate a value of time which is uniform in all activities and under all circumstances this restriction is relaxed by deserpa s 1971 model which allows the value of saving time to be activity specific we present the first analysis which uses actual driving choices between open access and toll roads to estimate a vtt specific for recreation trips thereby providing a value which conforms to both becker s and deserpa s theoretical models using these findings we conduct a monte carlo simulation to identify generalizable results for subsequent valuation studies our results indicate that 3 4 of the wage rate provides a reasonable approximation of the average vtt for recreation trips while the commonly implemented assumption of 1 3 of the wage rate generates downward biased results

value of time speeding behavior and gasoline prices abstract value of time vot is a key parameter in economics and policy this paper presents an alternative method to estimate vot by analyzing an hourly dataset on drivers speeding behavior as a function of the gasoline price our identification strategy is novel as it is based on the intensive margin in comparison previous studies reveal vot on the extensive margin but choice alternatives have multiple attributes thereby potentially confounding estimates consistent with the range of the prior literature we find a vot of about 50 of the wage rate and analyze sources of bias from accidents and traffic tickets these bias functions suggest that previous stated preference vot estimates are likely downward whereas previous revealed preference estimates are likely upward biased

stock splits tick size and sponsorship a traditional explanation for stock splits is that they increase the number of small shareholders who own the stock a possible reason for the increase is that the minimum bid ask spread is wider after a split and brokers have more incentive to promote a stock i document a large number of small buy orders following nasdaq and nyse amex splits during 1993 to 1994 i also find strong evidence that trading costs increase and weak evidence that costs of market making decline following splits this is consistent with splits acting as an incentive to brokers to promote stocks stock splits seem to be purely cosmetic changes with no real economic consequences after a two for one split each shareholder has twice as many shares but each represents a claim on only half as much of the corporation s assets and earnings however one real consequence of a stock split is that the tick size increases as a proportion of the stock s price except for a small number of very low priced issues u s stocks listed on an exchange or on nasdaq have a tick or minimum price variation of 0 125 during the sample period thus a decrease in the stock price and an increase in the relative tick size are indistinguishable consequences of a split some authors notably angel 1997 argue that splits are intended to move relative ticks to desired levels several empirical studies provide indirect evidence that is consistent with an increase in relative tick size as a motivation for splits desai and jain 1997 fama et al 1969 lakonishok and lev 1987 and others document that splits occur after stocks have experienced significant price increases or equivalently after relative tick sizes have decreased significantly angel shows that there is far less dispersion internationally in relative tick sizes than in stock prices

reply to a comment on three reasons to use annual payments in contingent valuation abstract whitehead 2017 suggests the contingent valuation cv data from 3 egan et al 2015b lacks theoretical validity and has a fat tails problem while also questioning our conclusion that cv surveys using annual payments produce willingness to pay wtp estimates that better match consumer surplus estimates from a travel cost model in this reply we use likelihood ratio tests to show that our cv data is theoretically valid we use the turnbull and kristrom distribution free estimators to show that our cv data generate economically significant wtp estimates with small standard errors finally we apply the sensitivity analyses from our original paper to whitehead s results these sensitivity analyses overwhelmingly support our original conclusion in favor of using annual payments in cv surveys

energy conservation investment do consumers discount the future correctly we argue that the apparently high discount rates attributed to investors making energy conservation investments are not irrational or the result of some market failure rather they may result from an investor recognizing that many conservation investments entail substantial sunk costs in the presence of these costs and uncertainty over future conservation savings consumers should use a higher hurdle rate for investment than if there were no uncertainty simulations suggest that the hurdle rate should be about four times greater than the standard rate an implication of our model is that tax subsidies for the purchase of conservation capital are likely to be ineffective we discuss alternative policy approaches which are more likely to increase energy efficient investment namely mandatory efficiency standards and energy taxes

tick size share prices and stock splits minimum price variation rules help explain why stock prices vary substantially across countries and other curiosities of share prices companies tend to split their stock so that the institutionally mandated minimum tick size is optimal relative to the stock price a large relative tick size provides an incentive for dealers to make markets and for investors to provide liquidity by placing limit orders despite its placing a high floor on the quoted bid ask spread a simple model suggests that idiosyncratic risk firm size and visibility of the firm affect the optimal relative tick size and thus the share price in stock markets around the world the average price per share differs substantially the median u s stock for example sells for about 40 a typical london stock sells for about 5 7 50 and a typical hong kong share is about 2 furthermore when stock prices rise above a country s usual trading range firms often split their stocks to restore prices to that range why are these price ranges so different among countries these trading ranges can be remarkably stable over time during the half century from 1943 to 1994 the s p composite index increased over 1 500 percent yet the average new york stock exchange nyse share price was

the impact of the bird flu on public willingness to pay for the protection of migratory birds abstract in this paper we present the results of a unique time series analysis of contingent values and models for migratory bird protection based on an identical contingent valuation cv survey carried out over a three year time period since the first bird flu outbreak in 2003 although there exists no scientific evidence for a direct relationship migratory birds are believed to play an important role in spreading the bird flu virus worldwide the time series analysis allows us to test the temporal stability of stated preferences for migratory bird protection and at the same time examine indirectly the possible impact of increased media attention and public awareness levels regarding the bird flu we test the impact of the bird flu on public willingness to pay wtp for migratory bird protection in the final 2005 survey whilst accounting for procedural variance introduced by sequencing and question ordering effects but we are unable to demonstrate a direct negative relationship a novelty of the study presented here is that respondents in the cv surveys are given the opportunity to pay an annual money amount or a one time off lump sum annual wtp values appear to be significantly higher than one time off wtp values suggesting a negative implicit discount rate self selection bias is an important reason for the observed differences we find that respondents who agree to pay annually differ significantly from respondents who wish to pay a lump sum in terms of their underlying preferences and motivations towards migratory bird protection

stock splits and stock dividends why who and when this study investigates empirically why firms split their stock or distribute stock dividends and why the market reacts favorably to these distributions the findings suggest that stock splits are mainly aimed at restoring stock prices to a normal range some support can also be found for the oft mentioned signalling motive of stock splits stock dividends are altogether different from stock splits and they appear to be a decreasing phenomenon the clue to stock dividend distributions may lie in their perceived substitution for relatively low cash dividends neither stock splits nor stock dividends are recent phenomena the latter dates back to the elizabethan age among the first to declare such dividends was the east india company which while enjoying great prosperity declared in 1682 a stock dividend of one hundred percent during the eighteenth and nineteenth centuries stock dividends were quite frequently distributed by british companies in the united states an early and frequently discussed stock dividend distribution was that of the new york central railroad just prior to its union with the hudson river railroad in 1869 surprisingly stock dividends were quite popular in the u s despite their being subject to federal income tax thus for example during the seven years prior to 1922 the year in which the supreme court exempted the recipients of stock dividends from taxes the ratio of stock dividends to all dividend distributions was 14 5 percent this ratio increased to a staggering forty seven percent during the seven years succeeding the supreme court decision during 1936 to 1937 some american companies distributed stock dividends to avoid the undistributed profit tax

willingness to pay and the cost of commitment an empirical specification and test in a static setting willingness to pay for an environmental improvement is equal to compensating variation in a dynamic setting however willingness to pay may also contain a commitment cost in this paper we incorporate the dynamic nature of the value formation process into a stated preference study designed to test whether there is an important dynamic component commitment cost in stated preference values the results clearly indicate that stated preference values can contain commitment costs and that these can be quite large respondents offered the opportunity to delay their purchasing decisions until more information became available were willing to pay significantly less for improved water quality than those facing a now or never decision these results have important consequences for the design and interpretation of stated preference data

what are the consequences of consequentiality abstract we investigate the extent to which dichotomous choice referenda responses are shaped by whether the individual believes the survey itself will ultimately impact policy using survey data from the iowa lakes project we test this supposition specifically we employ a bayesian treatment effect model in which the degree of perceived consequentiality measured as an ordinal response is permitted to have a structural impact on willingness to pay wtp for a hypothetical environmental improvement we test whether the estimated wtp distributions are the same for each value of the ordinal response in our survey data a subsample of individuals were randomly assigned supporting information suggesting that their responses to the questionnaires were important and will have an impact on policy decisions in conjunction with a bayesian posterior simulator we use this source of exogenous variation to identify the structural impacts of consequentiality perceptions on willingness to pay while controlling for the potential of confounding on unobservables we find evidence consistent with a knife edge result namely that the willingness to pay distributions are equal among those believing the survey to be at least minimally consequential and different for those believing that the survey is irrelevant for policy purposes

the korean public s willingness to pay for expanding the use of solid refuse fuel abstract solid refuse fuel srf a solid fuel that is produced from non hazardous combustible waste can mitigate greenhouse gas emissions compared with fossil fuels the korean government plans to enhance the ratio of combustible waste converted into srf from 16 in 2014 to 100 in 2020 by increasing the number of facilities that make and use srf this paper attempts to investigate empirically the korean public s willingness to pay wtp for expanding the use of srf the wtp data were obtained from a one and one half bounded dichotomous choice contingent valuation survey of 1000 households because a considerable number of respondents 62 6 gave a zero wtp response we applied a spike model to treat the wtp data with zero observations the spike model fitted the data well considering that all the coefficient estimates are statistically significant at the 1 level the yearly mean wtp was computed as krw 2479 usd 2 17 per household for the next 10 years which is also statistically meaningful at the 1 level expanding the value to the national population gives us krw 46 4 billion usd 40 5 million per year the present value of the total public wtp amounts to krw 369 0 billion usd 322 3 million using a social discount rate of 5 5 we can conclude that korean households are ready to shoulder some of the financial burden to expand the use of srf

stock splits evidence from mutual funds mutual fund splits occur in high priced funds after unusually high returns split factors are related to the deviation of a fund s price from the mean of all fund prices post split prices are below the mean of other funds prices post split numbers of shareholders and assets do not increase compared with funds having similar rates of asset growth however i find evidence that mutual fund splits bring per account shareholdings back up to normal levels i argue that signaling liquidity and tick size theories do not apply to mutual fund splits

stock splits signaling or liquidity the case of adr solo splits abstract stock splits should have no effect on firm value in perfect capital markets yet stock prices increase on split announcements the two traditional explanations are information signaling and improved liquidity for shares that trade at lower prices we investigate these explanations by studying splits of american depositary receipts adrs that are not associated with splits in their home country stock and which represent unique illustrations of the effect of liquidity we interpret our findings as supportive of the liquidity explanation of stock split announcement effects

a mire of discount rates delaying conservation payment schedules in a choice experiment studies on the public s implicit discount rate in the willingness to pay for environmental amenities have mostly employed contingent valuation surveys we investigate respondents time preferences using choice experiments with four payment schedules in a split sample design in the context of mire conservation we first examine preference and taste heterogeneity among respondents finding them to a large extent independent of payment schedules next we use an endogenous approach to jointly estimate the implicit discount rates and preferences using choice experiments data we explore exponential and hyperbolic discounting model specifications we find insensitivity to the length of the payment period and support for hyperbolic discounting furthermore we provide policy relevant valuation results concerning mire conservation

three reasons to use annual payments in contingent valuation surveys convergent validity discount rates and mental accounting abstract we present three arguments for using ongoing annual payments in contingent valuation cv surveys that estimate the benefit of a long lasting environmental improvement first by matching the duration of the payments with the duration of the environmental benefits survey respondents are spared from performing complicated present value calculations second willingness to pay wtp estimates from cv surveys that include ongoing annual payments best match wtp estimates obtained using travel cost surveys third respondents are less likely to face binding mental budget constraints with ongoing annual payments than with a larger one time payment in addition respondents discount rates may be estimated by collecting non hypothetical individual time preference data as part of the valuation survey

is the korean public willing to pay for a decentralized generation source the case of natural gas based combined heat and power abstract natural gas ng based combined heat and power chp plants can be installed near electricity consuming areas and do not require large scale and long distance power transmission facilities this paper attempts to assess the public s additional willingness to pay wtp for substituting consumption of a unit of electricity generated from nuclear power plant currently a dominant power generation source in korea with that produced from ng based chp plant in terms of decentralized generation using the contingent valuation cv method to this end a cv survey of 1 000 households was implemented the results show that the mean additional wtp for substituting nuclear power plant by ng based chp plant is estimated to be krw 55 3 usd 0 047 per kwh of electricity which is statistically significant at the 1 level this value amounts to 44 7 of the average price for electricity krw 123 69 usd 0 106 in 2015 which implies that the public are ready to shoulder a significant financial burden to achieve the substitution moreover the value can be interpreted as an external cost of nuclear power generation relative to ng based chp generation or as an external benefit of ng based chp generation relative to nuclear power generation with a view to decentralized generation

measurement effects and the variance of returns after stock splits and stock dividends this article examines the relation between two factors affecting stock returns the bid ask spread and price discreteness and the increase in return variance after ex dates of stock splits and stock dividends controlling for these effects the variance of daily returns still increases significantly the variance of weekly returns also increases significantly and the variance of returns for a control sample of nonsplitting firms shows no significant increase variance ratio tests show that bid ask errors are small for these stocks and therefore cannot explain the large increase in variance spreads and price discreteness do not explain increased variance after stock distributions article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

quotes order flow and price discovery the goal of this article is to examine the impact of 1975 congressional mandate to integrate the trading of nyse listed stocks the conclusions are most of the time the new york stock exchange nyse quote matches or determines the best displayed quote and the nyse is the most frequent initiator of quote changes non nyse markets attract a significant portion of their volume when they are posting inferior bids or offers indicating they obtain order flow for other reasons such as payment for order flow yet when a non nyse market does post a better bid or offer it does attract additional order flow

non users willingness to pay for a national park an application and critique of the contingent valuation method bateman i j and langford i h 1997 non users willingness to pay for a national park an application and critique of the contingent valuation method reg studies 31 571 582 a great deal of the ongoing academic debate concerning the contingent valuation cv method has focused upon whether or not the method is suitable for assessing non use values this paper presents results from a study examining non users values for preserving the norfolk broads a wetland area of recognized international importance from the threat of saline flooding discussion of results centres upon the validity of the cv method for eliciting unbiased estimates of non use value a graphical representation of findings from a variety of studies is presented to suggest that such results are logically ordered across goods and valuation scenarios however as the paper concludes logicality and validity are not necessarily synonymous bateman i j et langford i h 1997 la volonte des non usagers de payer les parcs nationaux

specification of driving costs in models of recreation demand existing recreation demand models have paid much attention to the heterogeneous nature of the opportunity cost of time but generally stipulate constant per mile costs in access price specifications this study proposes two alternative approaches to introduce user specific driving costs into recreation demand models the first approach is based on a refined measurement of driving costs based on engineering considerations the second strategy estimates perceived per mile cost as a function of vehicle attributes in an empirical framework we find strong evidence that driving costs are a visitor specific concept and that prescribed and perceived costs differ substantially however welfare measures generated by these alternative specifications are not statistically different from those produced by the standard model in our application of jet skiing in the lake tahoe region

fat tails and truncated bids in contingent valuation an application to an endangered shorebird species a yes response function in a contingent valuation study is said to have fat tails if it has a high and slowly declining yes response rate at high bid levels truncated bids refer to the practice of dropping high bid offers before a yes response rate of near zero is reached this is a common practice in contingent valuation we explore the extent and implications of fat tails and truncated bids in a study of an endangered shorebird species we find among other things that mean willingness to pay is quite sensitive to the highest bid offered so much so that the choice of highest bid nearly dictates outcomes

a comment on three reasons to use annual payments in contingent valuation egan corrigan and dwyer 2015 conduct a survey of ohio residents and collect contingent valuation method data for a wetlands restoration project the cvm scenario includes a split sample treatment where payment schedules differ my analysis of these data suggests that there is little evidence of theoretical validity in the data and fat tails is a significant problem

an empirical model of firm entry with endogenous product type choices i describe a model of entry with endogenous product type choices these choices are formalized as the outcomes of a game of incomplete information in which rivals differentiated products have nonuniform competitive effects on profits i estimate the model for location choices in the video retail industry using a nested fixed point algorithm solution the results imply significant returns to product differentiation simulations illustrate the tradeoff between demand and intensified competition and the extent to which markets with more scope for differentiation support greater entry

valuing water quality as a function of water quality measures employing a unique and rich data set of water quality attributes in conjunction with detailed household characteristics and trip information we develop a mixed logit model of recreational lake usage and undertake thorough model specification and fitting procedures to identify the best set of explanatory variables and their functional form for the estimated model our empirical analysis shows that individuals are responsive to the full set of water quality measures used by biologists to identify the impaired status of lakes thus changes in these quality measures are not simply a scientific exercise but they also translate into changes in the recreational usage patterns and well being of individual households willingness to pay wtp estimates are reported based on improvements in these physical measures

price based return comovement abstract similarly priced stocks move together stocks that undergo splits experience an increase in comovement with low priced stocks and a decrease in their comovement with high priced stocks price based comovement is not explained by economic fundamentals firm size or changes in liquidity or information diffusion the shift in comovement following splits is greater for large stocks high priced stocks and when investor sentiment is high in the full cross section price based portfolios explain variation in stock level returns after controlling for movements in the market and industry portfolios as well as portfolios based on size book to market transaction costs and return momentum the results suggest that investors categorize stocks based on price

a latent class approach to modeling endogenous spatial sorting in zonal recreation demand models a method for incorporating unobserved heterogeneity into aggregate count data frameworks is presented and used to control for endogenous spatial sorting in zonal recreation models the method is based on latent class analysis which has become a popular tool for analyzing heterogeneous preferences with individual data but has not yet been applied to aggregate count data the method is tested using data on backcountry hikers for a southern california study site and performs well for relatively small numbers of classes the latent class model produces substantially smaller welfare estimates compared to a constrained version that assumes homogeneity throughout the population

volatility increases subsequent to nyse and amex stock splits the post split increase in daily returns volatility is less for amex stocks than for nyse stocks the exchange trading location is a significant factor in explaining the volatility shift even after stock price and firm size are considered furthermore when measured on a weekly basis there is no increase in amex stocks returns volatility these results suggest that measurement errors created by bid ask spreads and the 1 8 effect and also one or more of the elements that make the nyse different from the amex explain why the estimated volatility of daily stock returns increases after the ex split date ohlson and penman 1985 provide evidence that nyse stock returns variances increase subsequent to ex stock distribution days for splits of 100 or greater the increase in volatility is independent of the size of the split alnd the post split price seven potential problems that might affect their results are analyzed and rejected 1 ohlson and penman 1985 suggest that the greater post split volatility may be due to the activity of relatively ignorant noisy traders who prefer trading low priced stocks this clientele factor is attributed to black 1986 pg 534 and institutional factors a rather broad category that incorporates measurement problems created by the 1 8 effect and bid ask spreads as possible hypotheses for the post split volatility increase this paper extends ohlson and penman s 1985 analysis to amex stocks exchange listing can serve as a proxy for several real factors that may cause the increase in post split variance many of which are related to the clientele factor and institutional factors cited above if the increase in volatility differs between nyse and amex stocks it will suggest that one or more of the following contributes to the phenomenon

discrete choice under preference uncertainty an improved structural model for contingent valuation abstract this paper is concerned with discrete choice contingent value estimation in the presence of response errors we attempt to extend the theoretical frameworks developed by hanemann 1984 amer j agric econom 66 332 341 and cameron 1988 j environ econom management 15 355 379 by introducing preference uncertainty with individual respondents we assume that respondents have incomplete knowledge about their true valuation of a nonmarket resource and thus may give wrong yes no answers on whether or not to pay a given bid amount for the resource a post decisional confidence measure for each observed yes no answer is elicited for characterizing the degree of preference uncertainty with the help of this confidence measure we develop an improved structural model for deriving value estimates data from a forest environment valuation survey are used for the empirical estimations

a dual approach to modeling corner solutions in recreation demand abstract the dual approach of lee and pitt to estimating demand systems for which individuals often choose not to consume one or more of the available goods provides a utility consistent framework for estimating preferences over visits to recreation sites because of the complexity of the model however this approach has not been applied in the recreation demand literature this paper provides the first application of the model to recreation demand and develops a methodology for conducting welfare analysis relying on monte carlo integration to derive estimates of compensating variation the methods are applied to the demand for fishing in the wisconsin great lakes region

nudging acceptability for wood ash recycling in forests a choice experiment abstract in this paper our objective is to assess the general french population s acceptability of application of wood ash in forests a measure currently not allowed but under consideration by the government the main originality of our approach is that we test how a nudge can be used as an instrument to increase social acceptability conveying objective information regarding ash recycling furthermore although we do not consider it as a welfare measure we show how the estimation of the willingness to pay can be considered as a complement to the more traditional social acceptability measure three nudges were introduced as three treatments in a discrete choice experiment in the first treatment the options with wood ash application were highlighted to indicate to the respondents that they corresponded to pro environmental measures positive framing in the second treatment we changed the wording of the two non status quo options to highlight the recycling aspect of wood ash application in the last treatment we adopted a productive wording to highlight the fact that wood ash application increases wood production treatments in particular positive framing and productive wording influence the willingness to pay but depend on the attitudes of the respondents

joint estimation of discount rates and willingness to pay for public goods abstract we analyze willingness to pay wtp for environmental programs whose time periods of benefit and repayment differ using a net present value framework that identifies parameters of both wtp and personal discount rates respondents to a contingent valuation survey focusing on protection of critical habitat buffer zones for the endangered steller sea lion in alaska were asked their willingness to pay for 1 5 and 15 year repayment periods we jointly estimate the personal discount rates and wtp via maximum likelihood and compare with a model assuming a fixed market discount rate

the market reaction to stock splits in this paper a model of market reaction to stock splits is presented and tested we argue that the announcement of a split sets off the following chain of events the market recognizes that subsequent to the reverse split ex day the daily number of transactions along with the raw volume of shares traded will increase decrease this increase in volume results in an increase in the noisiness of the security s return process the increase in noise raises the tax option value of the stock and it is this value that generates the announcement effect of stock splits empirical evidence using security returns daily trading volume and shareholder data strongly supports this theory the evidence in conjunction with this theory also agrees with extant literature that splits result in decreased liquidity but there is no evidence that this reduction in liquidity is priced stock splits have presented finance theorists with a conundrum these nonevents seem to be a purely cosmetic change nevertheless research shows that significant price reaction is attributable directly to splits recently grinblatt masulis and titman 12 show that even in clean cases i e where no other firm specific event coincides with a split announcement stock splits generate a positive abnormal return of close to three percent upon announcement and an additional one percent abnormal return on the ex day the primary contribution of this paper is to provide and empirically support a rational explanation for the split reverse split announcement effect a recent study by ohlson and penman 16 documents a statistical aberration that stock volatilities increase by an average of thirty five percent subsequent to split ex days in this paper we provide a direct statistical extension of ohlson and penman in three directions first we examine reverse splits and demonstrate that they exhibit reductions in volatility second we isolate the shift in volatility as between the nonsystematic and systematic components finally we establish a link between trading volume and the increased volatility copeland 9 shows that contrary to market folklore the liquidity of a stock is actually reduced by a split we provide a statistical extension to copeland by examining the volume pattern of reverse splits copeland observes a drop in split adjusted volume and concludes that liquidity has declined once again we show that the behavior of stocks that reverse split is opposite that of splitting stocks

identifying individual discount rates and valuing public open space with stated preference models an individual s rate of time preference is an important consideration for individuals deciding whether to support a public good since the benefits of a public good often come in the future our study finds individual discount rates from a contingent valuation method cvm question where the time frame of the payment schedule is varied across surveys we find discount rates similar to the rates found in the recent revealed preference and experimental literature of around 30 our cvm question addresses the preservation of additional open space adjacent to a large regional park at the urban fringe of portland oregon

a semiparametric smooth coefficient estimator for recreation demand we introduce a semiparametric smooth coefficient estimator for recreation demand data that allows more flexible modeling of preference heterogeneity we show that our sample of visitors each has an individual statistically significant price coefficient estimate leading to clearly nonparametric consumer surplus and willingness to pay wtp distributions we also show mean wtp estimates that are different in economically meaningful ways for every demographic variable we have for our sample of beach visitors this flexibility is valuable for future researchers who can include any variables of interest beyond the standard demographic variables we have included here and the richer results price elasticities consumer surplus and wtp estimates are valuable to planners and policymakers who can easily see how all these estimates vary with characteristics of the population of interest

sensitivity of contingent valuation to alternative payment schedules insensitivity to payment schedule wherein respondents do not adequately differentiate between a one time payment and a series of payments may be an important but often overlooked factor in the design interpretation and use of contingent valuation studies several contingent valuation experiments involving a familiar private good and a less familiar environmental commodity indicate that although respondents distinguished between lump sum and periodic payment schedules implicit discount rates were very high suggesting that sensitivity to payment schedule is an important subject for further study

willingness to pay and sensitivity to time framing a theoretical analysis and an application on car safety stated preference sp surveys attempt to obtain monetary values for non market goods that reflect individuals true preferences numerous empirical studies suggest that monetary values from sp studies are sensitive to survey design and so may not reflect respondents true preferences this study examines the effect of time framing on respondents willingness to pay wtp for car safety we explore how wtp per unit risk reduction depends on the time period over which respondents pay and face reduced risk in a theoretical model and by using data from a swedish contingent valuation survey our theoretical model predicts the effect to be nontrivial in many scenarios used in empirical applications in our empirical analysis we examine the sensitivity of wtp to an annual and a monthly scenario our theoretical model predicts the effect from the time framing to be negligible but the empirical estimates from the annual scenario are about 70 higher than estimates from the monthly scenario

estimating individual discount rates in denmark a field experiment we estimate individual discount rates with respect to time streams of money using controlled laboratory experiments these discount rates are elicited by means of field experiments involving real monetary rewards the experiments were carried out across denmark using a representative sample of 268 people between 19 and 75 years of age individual discount rates are estimated for various households differentiated by socio demographic characteristics such as income and age our conclusions are that discount rates are constant over the 12 month to 3 year horizons used in these experiments and that discount rates vary substantially with respect to several socio demographic variables hence we conclude that it would be reasonable to assume constant discount rates for specific household types but not the same rates across all households

the effects of stock splits on bid ask spreads this paper examines the effects of stock splits on bid ask spreads for nyse listed companies percentage spreads increase after splits representing a liquidity cost to investors these spread increases are directly related to decreases in share prices following splits and can explain part but not all of the observed increase in return variability after splits the evidence thus suggests a liquidity cost of stock splits that must be weighed against any other perceived benefits of splits such a liquidity cost may validate that stock splits are a signal of favorable information about the firm stock splits have long been a prominent feature in u s financial markets five to ten percent of all amex and nyse firms split in a typical year lakonishok and lev 1987 two potentially conflicting explanations for splits are frequently given first most managers believe baker and gallagher 1980 that splits return share prices to some optimal trading range and improve shareholder liquidity the second explanation is that splits are a costly signal of favorable future prospects for the firm for instance brennan and copeland 1988a show that if stock splits increase liquidity costs to investors such splits can serve as valid signals most empirical studies of the liquidity effects of splits use trading volume copeland 1979 lamoureux and poon 1987 and murray 1985 all conclude that shareholder liquidity decreases after a split based on finding dollar trading volume decreases after splits on the other hand lakonishok and lev 1987 find abnormally high volume in the year preceding a split and abstracting from this abnormal volume that splits are not associated with a change in trading volume the use of volume to measure liquidity is largely motivated by empirical findings of a negative relationship between volume and the bid ask spread e g demsetz 1968 benston and hagerman 1974 and tinic 1972 among others this spread is a direct measure of the cost of liquidity when liquidity is defined hicks 1946 as the ease or rapidity with which a financial instrument can be exchanged for currency despite the importance of the bid ask spread as a liquidity measure only two studies provide evidence on splits and bid ask spreads and they yield conflicting conclusions copeland 1979 studies 162 otc firms for the period 1968 1976 and finds a statistically significant increase in percentage spreads comparing days before and after the ex date murray 1985 studies 100 otc splitting firms for the period 1972 1976 and finds no evidence of a change in percentage spreads relative to a control group

the personal discount rate evidence from military downsizing programs the military drawdown program of the early 1990s provides an opportunity to obtain estimates of personal discount rates based on large numbers of people making real choices involving large sums the program offered over 65 000 separatees the choice between an annuity and a lump sum payment despite break even discount rates exceeding 17 percent most of the separatees selected the lump sum saving taxpayers 1 7 billion in separation costs estimates of discount rates range from 0 to over 30 percent and vary with education age race sex number of dependents ability test score and the size of payment

protesting and justifying a latent class model for contingent valuation with attitudinal data this article develops a latent class model for estimating willingness to pay wtp for public goods using simultaneously contingent valuation cv and attitudinal data to identify individuals with similar characteristics such as wtp and protest attitudes we find evidence that the answer to the cv question influences the responses to the attitudinal questions in our case this influence reflects rational behavior budget constraint issues and justification biases related to protest reasons such as lack of trust in institutions or fairness issues with respect to the distribution of the burden of preservation the results from our empirical application confirm the importance of accounting for those biases