The Contingent-Claims Approach to Investment Decisions*

This paper presents a contingent-claims approach to project valuation when capital expenditures are made sequentially over time. It focuses on an important facet of sequential investment projects that the firm can undertake—or pass up projects—as more information becomes available. The contingent-claims approach takes account of this important feature of firms' investment decision process, whereas the traditional capital budgeting procedure does not. Since the traditional method does not reflect the options nature of investment opportunities, it underestimates the value of sequential investment projects. As a result, a naive implementation of the traditional capital budgeting procedure could result in rejecting profitable projects. The extent of undervaluation associated with the traditional capital budgeting procedure is greater when the correlation between the random component of the future asset value and that of the required capital expenditure is smaller and/or when the growth rate of the required capital expenditure is higher.     

Kernel density estimation under negative superadditive dependence and its application for real data

In this paper, the kernel density estimator for negatively superadditive dependent random variables is studied. The exponential inequalities and the exponential rate for the kernel estimator of density function with a uniform version, over compact sets are investigated. Also, the optimal bandwidth rate of the estimator is obtained using mean integrated squared error. The results are generalized and used to improve the ones obtained for the case of associated sequences. As an application, FGM sequences that fulfil our assumptions are investigated. Also, the convergence rate of the kernel density estimator is illustrated via a simulation study. Moreover, a real data analysis is presented.     

On Bartlett correction of empirical likelihood for regularly spaced spatial data

Bartlett correction constitutes one of the attractive features of empirical likelihood because it enables the construction of confidence regions for parameters with improved coverage probabilities. We study the Bartlett correction of spatial frequency domain empirical likelihood (SFDEL) based on general spectral estimating functions for regularly spaced spatial data. This general formulation can be applied to testing and estimation problems in spatial analysis, for example testing covariance isotropy, testing covariance separability as well as estimating the parameters of spatial covariance models. We show that the SFDEL is Bartlett correctable. In particular, the improvement in coverage accuracies of the Bartlett‐corrected confidence regions depends on the underlying spatial structures. The Canadian Journal of Statistics 47: 455–472; 2019 © 2019 Statistical Society of Canada     

A new aging concept derived from the increasing convex ordering

In this paper, a comparison between the life distribution of a new unit with that of a used unit in the increasing convex order is made leading to a new class of life distributions which we call “new better than used in convex ordering of second order”. This class includes as subclasses the NBU and the NBUC and is a subclass of the NBUCA class. Preservation properties under convolution, random maxima, mixing and formation of coherent structures are established. Stochastic comparisons of the excess lifetime when the inter-arrival times belong to the NBUC(2) class are developed. Some applications of Poisson shock models and a test of exponentiality against NBUC(2) alternative are presented.     

Special issue dedicated to Odd O. Aalen

Lifetime Data Analysis -     

The Role of Self-Conscious Emotions in the Sexual Health of Gay and Bisexual Men: Psychometric Properties and Theoretical Validation of the Sexual Shame and Pride Scale

Researchers have theorized about the role of sexual shame as a mechanism through which sexual minority stress manifests into mental health difficulties, such as sexual compulsivity for gay and bisexual men (GBM), and about the resilience-promoting effects of sexual pride. However, no validated measures to date have directly tapped into these constructs rather than using proxies for them, such as internalized homonegativity. We developed the Sexual Shame and Pride Scale (SSPS) and conducted a psychometric evaluation of it using a sample of 260 highly sexually active GBM. The scale had the expected structure in factor analysis and showed evidence of internal consistency and test–retest reliability. Correlational analyses demonstrated the convergent validity of sexual shame and sexual pride with relevant constructs. Regression analyses demonstrated the predictive validity of sexual shame in relation to sexual compulsivity, accounting for unique variability even after adjusting for previously demonstrated etiological factors, and the predictive validity of both shame and pride, which interacted to consistently predict four sexual behavior outcomes. Findings suggest the SSPS is a psychometrically valid and reliable measure that may be useful in future empirical work and highlight preliminary evidence for the role of these constructs in the sexual health of GBM.     

Socioeconomic Resource Environments in Biological and Alternative Family Care and Children's Cognitive Performance*

We examined social and economic resources in the environments of children involved with child protective services and their associations with children's cognitive performance. We used a national dataset of child protection investigations (children aged 6–16 at Wave 1). Using latent class analysis, we constructed profiles of the financial resources, parental education and employment, and family structure and size. We then examined within‐ and across‐time associations between resource environment profiles and children's math and reading scores and tested whether associations differed by family care type. Our latent class analysis identified four distinct family resource environments: educated middle class, single earner, large working class, and severely disadvantaged. Family resource environment profiles predicted current cognitive performance and changes in performance over time, but associations were more consistent for children in biological family care. Children who remain in home following maltreatment allegations may benefit from services that target social as well as economic resources.     

Rural Appalachian High School Students’ College‐Going and STEMM Perceptions

The authors examined perceptions of key social cognitive career theory (Lent, Brown, & Hackett, 1994) variables related to college‐going and science, technology, engineering, math, and medical (STEMM) careers in 10th and 11th graders (N = 892) attending 3 rural Appalachian high schools. The authors examined differences in perceptions related to gender, prospective 1st‐generation college student status, and the presence or absence of aspirations to pursue a STEMM career. Young women and young men scored similarly on all but 1 dependent variable, college‐going self‐efficacy (young women scored higher). Students who had STEMM career aspirations had higher scores on every measure than those who did not. Results suggest examining a 3rd prospective 1st‐generation college student status group—students who are unsure of their parents’ education level—as a distinct group in future research. By examining the college‐going and STEMM attitudes of rural Appalachian high school students, this study advances the literature and informs practitioners on reducing educational and vocational inequalities in this region.     

Reliability,Population Classification and Weighting in Multidimensional Poverty Measurement: A Monte Carlo Study

Social Indicators Research - In poverty measurement, differential weighting aims to take into account the unequal importance of the diverse dimensions and aspects of poverty and to add valuable...     

Constituency Opinion: A Test of the Surrogate Model

Using direct measures of district opinion, this article teststhe linearity and additivity assumptions of the surrogate model.Neither assumption is upheld when subjected to appropriate empiricaltests