Management’s causal reasoning on performance and earnings management

We investigate the association between the intensity of causal reasoning on performance in a firm’s annual management commentary and its earnings management propensity. Anticipated earnings management concerns are argued to constitute a significant accountability predicament, bringing management to offer more intense causal reasoning in order to mitigate investors’ earnings management concerns. We use computer-intensive techniques to measure causal reasoning intensity as a generic disclosure quality in the management commentary of a large sample of US firms from 1999 to 2007. We find that accruals earnings management (signed discretionary accruals) is positively associated with causal reasoning intensity. The positive association holds for alternative specifications of accruals earnings management (an earnings management dummy model and an analyst expectations model) and in a change model. Our results are consistent with the assertion that firms strategically use causal reasoning on performance to establish appropriateness and cognitive legitimacy, increase perceived plausibility of reported performance and mitigate performance-related concerns of investors.     

Several recent Supreme Court decisions and their implications for political redistricting in Voting Rights Act context

This paper focuses on four recent United States Supreme Court decisions which have profound implications for political redistricting. These cases are Holder v. Hall, Johnson v. De Grandy, Shaw v. Reno and Miller v. Johnson. Each of these cases place limits on the scope of Section 2 of the Voting Rights Act when conducting a political redistricting or fashioning a remedy for a Section 2 violation. These cases have resolved a number of important issues in redistricting while creating yet new issues to be resolved. Although demographers are not in the business of practicing law, they must clearly understand the legal requirements and often subtle nuances imposed by the case law. The paper concludes that the combined force of these cases does not yet spell the end of race conscious redistricting and therefore, effectively repeal the Voting Rights Act but does require that more weight be given to traditional redistricting criteria when designing districts that will withstand legal challenges.     

Scenario Development for 2050 for the Israeli/Palestinian Water Sector

Scenario analysis suggests that by 2050 the population of Israel, the West Bank and Gaza will grow from its current 10 million to between 14 and 28 million. The scenarios developed are compared to available water resources and assessed for their viability. With all scenarios, except very high population growth in the context of inadequate co-operation between Israel and Palestine, the water resource needs of the entire population can be met. The analysis suggests that water need not be an obstacle to peace or economic development in the region.     

The Real Walmart

The Walmart Company is one of the favorite punching bags of market critics. They accuse this firm of underpaying employees, dealing unfairly with customers, exploiting suppliers, and bankrupting small competitors. Various political jurisdictions have banned this firm from their environs, either implicitly or explicitly. The present article offers a more nuanced position on the behemoth from Arkansas. Although it has some flaws, there is an overwhelming case to be made in its behalf as an employer, competitor, purchaser, benefactor of customers.     

Comment on: On the role of data,statistics and decisions in a pandemic statistics for climate protection and health—dare (more) progress!

AStA Advances in Statistical Analysis - In the Corona pandemic, it became clear with burning clarity how much good quality statistics are needed, and at the same time how unsuccessful we are at...     

Estimation and forecasting hospital admissions due to Influenza: Planning for winter pressure. The case of the West Midlands, UK

Winters are a difficult period for the National Health Service (NHS) in the United Kingdom (UK), due to the combination of cold weather and the increased likelihood of respiratory infections, especially influenza. In this article we present a proper statistical time series approach for modelling and analysing weekly hospital admissions in the West Midlands in the UK during the period week 15/1990 to week 14/1999. We consider three variables, namely, hospital admissions, general practitioner consultants, and minimum temperature. The autocorrelations of each series are shown to decay hyperbolically. The correlations of hospital admission and the lag of other series also decay hyperbolically but with different speed and directions. One of the main objectives of this paper is to show that each of the three series can be represented by a Fractional Differenced Autoregressive integrated moving average model, (FDA). Further, the hospital admission winter and summer residuals shows significant interdependency, which may be interpreted as hidden periodicities within the last 10-years time interval. The short-range (8 weeks) forecasting of hospital admission of the FDA model and a fourth-order AutoRegressive AR(4) model are quite similar. However, our results reveal that the long-range forecasting of FDA is more realistic. This implies that, using the FDA approach, the respective authority can plan for winter pressure properly.     

Testing for Additivity at Select Mixture Groups of Interest Based on Statistical Equivalence Testing Methods

Several assumptions, defined and undefined, are used in the toxicity assessment of chemical mixtures. In scientific practice mixture components in the low-dose region, particularly subthreshold doses, are often assumed to behave additively (i.e., zero interaction) based on heuristic arguments. This assumption has important implications in the practice of risk assessment, but has not been experimentally tested. We have developed methodology to test for additivity in the sense of Berenbaum (Advances in Cancer Research, 1981), based on the statistical equivalence testing literature where the null hypothesis of interaction is rejected for the alternative hypothesis of additivity when data support the claim. The implication of this approach is that conclusions of additivity are made with a false positive rate controlled by the experimenter. The claim of additivity is based on prespecified additivity margins, which are chosen using expert biological judgment such that small deviations from additivity, which are not considered to be biologically important, are not statistically significant. This approach is in contrast to the usual hypothesis-testing framework that assumes additivity in the null hypothesis and rejects when there is significant evidence of interaction. In this scenario, failure to reject may be due to lack of statistical power making the claim of additivity problematic. The proposed method is illustrated in a mixture of five organophosphorus pesticides that were experimentally evaluated alone and at relevant mixing ratios. Motor activity was assessed in adult male rats following acute exposure. Four low-dose mixture groups were evaluated. Evidence of additivity is found in three of the four low-dose mixture groups. The proposed method tests for additivity of the whole mixture and does not take into account subset interactions (e.g., synergistic, antagonistic) that may have occurred and cancelled each other out.