HOUSING FINANCE AND MONETARY POLICY

We document three facts concerning how the structure of housing finance affects the monetary transmission mechanism: first, the characteristics of residential mortgage markets differ markedly across industrialized countries; second, the impact of monetary policy shocks to residential investment and house prices is significantly stronger in those countries with larger flexibility/development of mortgage markets; third, the transmission to consumption is stronger only in those countries where mortgage equity release is common and mortgage contracts are predominantly of the variable‐rate type. We then build a two‐sector DSGE model with financial constraints to rationalize those facts.     

The tone of business model disclosure: an impression management analysis of the integrated reports

The rising emphasis on the business model (BM) as a reportable element reflects the view that it constitutes one of the key starting points for investors’ analysis. In spite of this, recent academic and professional studies describe current reporting on BMs as uninformative: too optimistic, generic and incomplete. The International Integrated Reporting Council (IIRC) claims that these limitations may be overcome by means of an “Integrated Report”, an innovative report which is expected to offer a complete and balanced representation of how organizations create value by mean of their BMs. The paper investigates the informativeness of BM disclosure questioning whether companies adopt impression management (IM) strategies by manipulating the tone of the BM disclosures provided in their reports. We perform a manual content analysis of all the reports identified in the IIRC website and a multivariate statistical analysis to assess if a positive tone of BM disclosure is significantly associated with weak corporate governance, bad performance and low verifiability of the disclosure itself. Our findings support the idea that managers use BM disclosure as an IM strategy. This evidence has relevant implications for both accounting scholars and practitioners, since it questions the role of integrated reporting in improving corporate reporting on BMs.     

Does Religious Diversity in Health Team Composition Affect Efficiency? Evidence from Dubai

Team cultural diversity, the degree to which working team members differ in culture‐related factors, may affect healthcare teams’ outcomes. This paper focuses on one particular source of cultural diversity, namely religion, and examines its relation to the production efficiency of hospital wards. Building on the categorization‐elaboration model of organizational diversity, the authors test an empirical model positing that team religious diversity has non‐linear effects on efficiency, and considering the role of moderating variables of the relation diversity–efficiency. Empirically, the authors adopt a two‐step approach, whereby the first step applies data envelopment analysis to estimate efficiency scores for each team, and the second investigates the effect of diversity and of moderating variables. The model is tested on a sample of hospital wards from three large hospitals in Dubai. The results suggest an inverse U‐shaped relation between religious diversity and the wards’ efficiency. Evidence is provided that the relation is moderated by task complexity, task conflict, team leader tenure and diversity in nationality. This study advances research on the management of hospital team diversity by emphasizing the complexity of diversity effects and the importance of contextual factors.     

A DRAWBACK OF ELECTORAL COMPETITION

In most major democracies there are very few parties compared to the number of possible policy positions held by voters. We provide an efficiency rationale for why it might be appropriate to limit the proliferation of parties. In our model, the larger the number of parties, the greater the inefficiency of the outcome of electoral competition. The reason is that, when the number of parties increases, electoral incentives push each party to focus its electoral promises on a narrower constituency, and then special interest policies replace more efficient policies that have diffuse benefits. The analysis provides a possible explanation for the existence of institutional features that limit the extent of electoral competition: thresholds of exclusion, runoff electoral systems, and majoritarian two‐party political systems. (JEL: D82, L15)     

Microcredit,Family Planning Programs,and Contraceptive Behavior: Evidence From a Field Experiment in Ethiopia

The impact of community-based family planning programs and access to credit on contraceptive use, fertility, and family size preferences has not been established conclusively in the literature. We provide additional evidence on the possible effect of such programs by describing the results of a randomized field experiment whose main purpose was to increase the use of contraceptive methods in rural areas of Ethiopia. In the experiment, administrative areas were randomly allocated to one of three intervention groups or to a fourth control group. In the first intervention group, both credit and family planning services were provided and the credit officers also provided information on family planning. Only credit or family planning services, but not both, were provided in the other two intervention groups, while areas in the control group received neither type of service. Using pre- and post-intervention surveys, we find that neither type of program, combined or in isolation, led to an increase in contraceptive use that is significantly greater than that observed in the control group. We conjecture that the lack of impact has much to do with the mismatch between women’s preferred contraceptive method (injectibles) and the contraceptives provided by community-based agents (pills and condoms).     

Transition to adulthood and recession: a qualitative study

While the transition to adulthood has been broadly examined, less is known about the impact of economic recession on the well-being and psychosocial functioning of young people. The present study used qualitative interviews with 12 college students to understand their experience. Consensual qualitative research was used to analyse data and develop core themes around young people's experiences. Interviews focused on how young people perceived the impact of the economic recession on their social context and on emotional, behavioural, and interpersonal dimensions. Although students showed a proactive attitude in dealing with the crisis, findings highlighted a negative impact on psychological functioning characterized by feelings of instability and helplessness and by difficulties in planning for the future. Other general themes emerged, including disengagement from community participation expressed by feelings of isolation, lack of interest, and distrust. Directions for future research and implications for practice are discussed.     

A normative justification of compulsory education

Using a household production model of educational choices, we characterise a free-market situation in which some agents (high wagers) fully educate their children and spend a sizable amount of resources on them, while others (low wagers) educate them only partially. The free-market equilibrium is iniquitous, both because the households have different resources and because the children have different access to education. Public policy is thus called for, for vertical as well as horizontal equity purposes. Conventional wisdom has it that both objectives could be achieved using price control instruments, i.e. income taxes and price subsidies. We find instead that income taxes reduce equality of opportunity and that price subsidies cannot remedy this. Quantity controls become necessary: a compulsory education package, financed by a redistributive tax system, achieves both types of equity. Redistributive taxation and compulsory education are therefore best seen as complementary policies.