The purpose of this paper is to estimate demographic differentials in alcohol and illicit drug use, participation, own price effects and cross price effects. This paper uses a data set of over 49,000 individuals from the National Household Survey of Drug Abuse and links drug and alcohol prices...

Alcohol consumption has been frequently linked to family violence. The purpose of this paper is to examine the direct relationship between the price of alcohol, which determines consumption, and violence towards spouses. The data come from the 1985 cross section and the 1985-1987 panel of the...

The purpose of this paper is to empirically estimate the effect of alcohol advertising on motor vehicle fatalities. The concept of an industry level advertising response function is developed and other empirical issues in estimating the effects of advertising are reviewed. The data set consists...

It is well known that the funding status of state and local government defined benefit pension plans, as measured by the accounting methodology prescribed by the Governmental Accounting Standards Board (GASB), improves when the plans take on more investment risk. This paper documents several...

We outline a dividend signaling approach in which rational managers signal firm strength to investors who are loss averse to reductions in dividends relative to the reference point set by prior dividends. Managers with strong but unobservable cash earnings separate themselves by paying high...

Do bond investors demand credit quality or liquidity? The answer is both, but at different times and for different reasons. Using data on the Euro-area government bond market, which features a unique negative correlation between credit quality and liquidity across countries, we show that the...

Major events often trigger abrupt changes in stock prices and volatility. We study the implications of jumps in prices and volatility on investment strategies. Using the event-risk framework of Duffie, Pan, and Singleton (2000), we provide analytical solutions to the optimal portfolio problem....

This paper examines distortions in corporate investment decisions when a new project changes firm risk. It presents a dynamic model in which a self-interested, risk-averse manager makes investment decisions at a levered firm. The model, calibrated using data from public firms, is used to...

We develop a new approach to dealing with real options problems with uncertain maturity. This type of situation is typical for Ramp;D investments and mine or oil exploration projects. These types of projects are characterized by significant on-going investment costs until completion. Since time...

Innovation in the U.S. economy is about employing and rewarding highly talented workers to produce new products. Using unique longitudinal matched employer-employee data, this paper makes a key connection between talent and firms in markets with risky product innovations. We show that software...