Corporate valuation using imprecise cost of capital

If the estimated cost of capital bears a standard error, the estimation remains imprecise and firm values are biased on average, even though the estimator of the cost of capital is unbiased. Literature contributes approaches using adjusted discount factors to correct for such biases. This paper examines the theoretical and practical problems arising from the use of these approaches which are most likely to occur in the context of terminal value estimation. The adjusted discount factors imply time-dependent discount rates. Therefore, the commonly used valuation formula for perpetuities (Gordon formula) is no longer suitable to estimate unbiased terminal values. To continue application of this formula, this paper derives a new formula to directly adjust the cost of capital for estimation errors which yields unbiased terminal values.     

An alternate version of the conceptual predictive statistic based on a symmetrized discrepancy measure

The conceptual predictive statistic, C_p, is a widely used criterion for model selection in linear regression. C_p serves as an estimator of a discrepancy, a measure that reflects the disparity between the generating model and a fitted candidate model. This discrepancy, based on scaled squared error loss, is asymmetric: an alternate measure is obtained by reversing the roles of the two models in the definition of the measure. We propose a variant of the C_p statistic based on estimating a symmetrized version of the discrepancy targeted by C_p. We claim that the resulting criterion provides better protection against overfitting than C_p, since the symmetric discrepancy is more sensitive towards detecting overspecification than its asymmetric counterpart. We illustrate our claim by presenting simulation results. Finally, we demonstrate the practical utility of the new criterion by discussing a modeling application based on data collected in a cardiac rehabilitation program at University of Iowa Hospitals and Clinics.     

Women and crime the world over

This article examines female crime rates in twenty-seven countries over the past thirtyfive years. The results show that there has been an overall increase in total crime rates for all of the countries, and that the more economically advanced and industrialized countries have higher crime rates than the less developed nations. All countries also experienced an increase in the percent of all crimes committed by women. The percentages of violent crimes committed by women—specifically homicide and robbery—were consistently low across countries and increased only slightly over time. The percentages of property and financial crimes committed by women—specifically theft and fraud—were consistently higher than the percentages for violent crimes, and have increased more substantially over time. In addition, an analysis of the most recent data revealed a positive and significant relationship between women's overall crime rates and the countries' economic development. In those countries in which women occupy a higher status, as measured by formal years of schooling and representation in the labor force, we found some positive and significant correlations with the arrest rates for theft and fraud. There were also some strong negative relationships between female arrest rates for homicide and their status in society.     

Early access and use of housing: care leavers and other young people in difficulty

This paper presents findings from a study of how care leavers access and use housing services, and what they said had helped them to do so. The sample comprised 80 care leavers, and, for comparison, a group of 59 young people (termed ‘in difficulty’) who met certain criteria of disadvantage. Care leavers were found to have fewer crisis transitions and less experience of homelessness, together with a much higher level of autonomy and support in their first accommodation, relative to other young people in difficulty. Several factors are identified that, from the care leavers' point of view, contributed to their better access and use of housing services, including having family and friends to turn to, and leaving care teams that negotiated on their behalf with housing services. The paper concludes that care leavers had more positive housing experiences than other young people in difficulty, helped by the improved preparation for independence and ongoing support available to them from leaving care teams.     

Preparing for Elite Political Participation Simulations and the Political Socialization of Adolescents

Objective. We ask: How do socialization experiences shape adolescent perceptions of and the performance of gender in political leadership roles? We examine a political simulation, Model United Nations, which attracts academically motivated students aspiring to elite roles in politics and government. Methods. Using observational and survey data, we explore adolescent behavior in the simulation as both a learning experience and as a reflection of students' perceptions of leadership behavior. Results. Three critical observations emerge. First, the Model United Nations is a domain in which young women do not play an equal part. Female delegates take far fewer speaking turns. However, contextual factors, including membership on a committee that deals with less masculine issues and on a committee with a female chair, increase the likelihood of female turn‐taking. Second, though participants come to the event with very similar motivations, young women leave less satisfied with their personal effectiveness than do young men. Finally, female delegates are judged less favorably by themselves and others and thus as less successful in the simulation. Conclusions. These findings have normative implications for the recruitment of young women to politics.     

Pauvreté et convergence des consommations au Canada*

To study changes in household consumption patterns, five socio‐economic household groups were defined using a new multidimensional index (IMPR) composed of three dimensions: satisfaction of basic needs, marginalization relative to a reference population, and total disposable household income. When household incomes rose from 1969 to 1992, lower socio‐economic groups did not display the same consumption behaviours as upper‐income classes. The growth in household income during their life‐cycles did not allow them to catch up to higher‐income households. Middle‐class households experienced marked changes in consumption over their life‐cycle's, but in the 1990s, they experienced difficulties. Cinq groupes socioéconomiques de ménages sont définis à l'aide d'un nouvel indice multidimensionnel de pauvreté‐richesse (IMPR), construit à partir de trois dimensions: satisfaction des besoins de base, marginalisation par rapport à une population de référence et revenu total disponible du ménage. De 1969 à 1992, quand les revenus des ménages augmentent, les classes socioéconomiques qui occupent des positions inférieures n'ont pas les mêmes comporte‐ments de consommation que les classes supérieures. La croissance des revenus des ménages les moins riches au cours de leur cycle de vie ne leur permet pas de rattraper les positions des ménages plus riches. Dans les années 1990, la classe moyenne connaît une situation difficile.     

Intensity, timeliness, and success of incumbent response to technological discontinuities: a synthesis and empirical investigation

The extant literature highlights numerous different factors influencing the timeliness and intensity of incumbent response to discontinuous technological change. However, this literature has so far not been synthesized and is therefore limited in its analytical, predictive, and normative power. We develop a comprehensive model of incumbent response that organizes different explanatory factors into the three distinct dimensions of (1) identification and interpretation, (2) decision making, and (3) organizational implementation. We also conceptualize how response intensity and timeliness affect business performance in new technological domains. We test the model against data from 320 firms from the German dental lab industry, finding substantial support for the majority of our hypotheses. This study offers unique empirical insight in observing that cognitive constructs such as framing and management flexibility have the strongest impact on both intensity and timeliness of incumbent response to technological, and thus, strategic discontinuities. Together, our findings have important implications for both theory and practice.     

Mothers and child care: policies,values and theories

Government expansion of child care services is based on the assumption that both parents are employed (the adult worker model) and make cost‐benefit calculations in choosing child care (the rational economic choice model). This paper addresses this assumption, based on research examining mothers' assessments of appropriate child care. These assessments involve complex moral and emotional decisions around their own and their children's needs, and differ between social groups. On this basis, we conclude that the assumptions underlying current child care expansion policy are inadequate, and that the mere expansion of services is not enough.