Stock Investments at Work

Publisher PD

The Shareholder Base and Payout Policy

We examine the relation between the shareholder base and payout policy. Consistent with the idea that the shareholder base is related to the cost of external financing, we find that firms with small shareholder bases have lower payout levels and maintain higher cash holdings. We show that undertaking an open market repurchase results in a significant reduction in the size of the shareholder base. Consequently, we find that firms with small shareholder bases are less likely to undertake a repurchase (reduce the shareholder base even further) and are more likely to pay special dividend

Difference-in-differences with Economic Factors and the Case of Housing Returns

This paper studies how to incorporate observable factors in difference-in-differences and document their empirical relevance. We show that even under random assignment directly adding factors with unit-specific loadings into the difference-in-differences estimation results in biased estimates. This bias, which we term the “bad time control problem” arises when the treatment effect covaries with the factor variation. Researchers often control for factor structures by using: (i) unit time trends, (ii) pre-treatment covariates interacted with a time trend and (iii) group-time dummies. We show that all these methods suffer from the bad time control problem and/or omitted factor bias. We propose two solutions to the bad time control problem. To evaluate the relevance of the factor structure we study US housing returns. Adding macroeconomic factors shows that factors have additional explanatory power and estimated factor loadings differ systematically across geographic areas. This results in substantially altered treatment effects

The Sovereign Debt Crisis: Flights or Freezes?

Multiple asset pricing theories predict that large price changes should be associated with abnormal trading volume, inducing investor rebalancing and possibly leading to flights. In contrast, consistent with market microstructure theories, this paper documents freezes, a reduction in trading volume (approximately 30% relative to the previous trading week) during market stress episodes in the European sovereign bond market. We trace the market freezes to increasing transaction costs driven by reduced risk bearing capacity of market makers

A Sensor-Actuator Model for Data Center Optimization

Cloud data centers commonly use virtualization technologies to provision compute capacity with a level of indirection between virtual machines and physical resources. In this paper we explore the use of that level of indirection as a means for autonomic data center configuration optimization and propose a sensor-actuator model to capture optimization-relevant relationships between data center events, monitored metrics (sensors data), and management actions (actuators). The model characterizes a wide spectrum of actions to help identify the suitability of different actions in specific situations, and outlines what (and how often) data needs to be monitored to capture, classify, and respond to events that affect the performance of data center operations

Test of subjective methods for data collection and analysis of data errors influence on management suggestions

Vid skogsbruksplanläggning är det viktigt att kunna samla in data med så hög kvalitet som möjligt om skogstillståndet samtidigt som kostnaderna för inventeringen hålls på en rimlig nivå. Det är också viktigt att kunna ange ett ekonomiskt optimalt åtgärdsförslag för att markägaren ska få ut högsta möjliga avkastning från sitt skogsinnehav, förutsatt att det är målet. I dagsläget använder sig Norrskog m.fl. av en subjektiv inventeringsmetod där de med hjälp av olika stödmätningar uppskattar skogstillståndet och utifrån en bedömning föreslår åtgärder. I detta arbete har två olika planläggningsmetoder studerats med avseende på kvalitet och tidsåtgång där resultatet har jämförts mot en objektiv cirkelyteinventering. Vidare har de subjektiva åtgärdsförslagen jämförts mot de åtgärdsförslag som genererats utifrån analyser med Indelningspaketet av skogstillståndet utifrån data från både de subjektiva och den objektiva inventeringen. Studien är gjord på tolv gallrings- och slutavverkningsavdelningar på två privatägda fastigheter belägna i Jämtlands län. Den subjektiva inventeringen är utförd av fyra planläggare anlitade av Norrskog för mångbruksplanläggning, medan den objektiva inventerigen är gjord av författaren. De två olika subjektiva inventeringsmetoder som testats är: MetodA- Subjektiv bedömning med stödmätning och Metod B -Klavning av tre subjektivt utlagda cirkelprovytor. V ariansanalysen visar att det endast är för variablerna stamantal och tidsåtgång som det inte går att utesluta en viss signifikant skillnad mellan de båda subjektiva inventeringsmetoderna. Däremot visar resultatet av plottningen av olika beståndsvariabler att det finns en tendens till underskattning av framförallt volym och grundyta för bestånd med höga volymer, som i detta fall består av gammal granskog. För variablerna medeldiameter, medelhöjd och ålder går det utifrån resultatet inte att se någon skillnad mellan de olika metoderna. Den genomsnittliga medeldifferensen gentemot den objektiva inventeringen blev något lägre med metod B för alla beståndsvariabler utom för ålder och medelhöjd. Resultaten visar att det i vissa fall kan tillåtas stora avvikelser i beståndsdata, framförallt volymen, utan att det påverkar åtgärdsförslagen vid en analys med lP medan det i andra fall räcker med en över- eller underskattning på knappt 5% för att det ska leda till ett avvikande åtgärdsförslag och därmed en inoptimalförlust. Antalet avvikande åtgärdsförslag blev betydlig fler vid den subjektiva bedömningen än vad en analys med lP utifrån subjektiva data gav. De flesta av de avvikande åtgärdsförslagen kommer från medelålders och talldominerande bestånd där det i många avdelningar var aktuellt med gallring. Att enbart utifrån denna studie avgöra vilken inventeringsmetod som är den mest kostnadseffektiva och samtidigt ger den bästa tillståndsbeskrivningen är inte lätt. studien visar däremot att det är betydligt viktigare att minimera totalkostnaden för beslutsförlusten än att enbart minimera inventeringskostnaden. Det gäller bara att markägaren är medveten om hur stor förlusten kan bli p.g.a. avvikande åtgärdsförslag. Det finns således ett stort ekonomiskt utrymme för att i framtiden utveckla alternativa inventerings- och analysmetoder.When making forest management plans it is very important to have high quality data about the forest stand, and the costs for the inventory should be reasonable. It is also important to give the forest owner econornically optimal management proposals (if that is the owners objective). Today surveyors in Norrskog are estimating forest stand data and giving management suggestions by using traditional subjective inventory methods. In this study the quality of stand data and the time used have been studied for two different subjective inventory methods, and campared with an objective circular sample plot method. The management alternatives generatedfrom the Forest Management Planning Package (FMPP), based on analysis for both the subjective and objective inventory, have been campared with the surveyors' management proposals. Twelve thinning and final felling stands situated on two private forest holdings in the county of Jämtland have been studied. The subjective inventory was made by four surveyors working for Norrskog, while the objective inventory was made by the author. The methods studiedare Method A, a subjective estimation including measuring on subjectively ehosen places, and Method B, calipering of all trees on three circular plats on subjectively ehosen places. The results show that same stand characteristics were measured with higher precision than others. The variables Mean height, Mean diameter and Stand age were procured with high precision. For Basal area and Volume there was a tendency to underestimate with Method A in old spruce stands with high stand volume. The analysis of variance showed a significant difference between the two subjective methods for the variables Number of stems and Time used, but not for other variables. According to the mean difference, Method B was better for all of the stand variables except for Stand age and Mean height. The analysis with FMPP showed that in same cases large divergences in Stand volume had no effect on the management proposals, while in other cases an Underestimatian of lessthan 5 % could give a different proposal and an econornic loss. The subjective inventory gave alarger number of diverting proposals than analysis with FMPP using data from the subjective in ventory method. Most of the diverting proposals came from middle age pine stands, which rnight be thinned. It is important that an evaluation of forest inventory methods is based on eost-plus-loss analyses. The total east of a method is calculated as the sum of in ventory east and expected losses due to inoptimal decisions. It is also important that the forest owners are conscious about the sizes of these losses. Forthat reasonthere is a large econornical motivation for testing alternatives in inventory- and analysis methods

Eye movements during reading and their relationship to reading assessment outcomes in Swedish elementary school children

The characteristics of children’s eye movements during reading change as they gradually become better readers. However, few eye tracking studies have investigated children’s reading and reading development and little is known about the relationship between reading-related eye movement measures and reading assessment outcomes. We recorded and analyzed three basic eye movement measures in an ecologically valid eye-tracking set-up. The participants were Swedish children (n = 2876) who were recorded in their normal school environment. The relationship between eye movements and reading assessment outcomes was analyzed in using linear mixed effects models. We found similar age-related changes in eye movement characteristics as established in previous studies, and that eye movements seem to correlate with reading outcome measures. Additionally, our results show that eye movements predict the results on several tests from a word reading assess- ment. Hence eye tracking may potentially be a useful tool in assessing reading development

Social interaction at work

Stock market investment decisions of individuals are positively correlated with that of co-workers. Sorting of unobservably similar individuals to the same workplaces is unlikely to explain our results, as evidenced by the investment behavior of individuals that move between plants. Purchases made under stronger co-worker purchase activity are not associated with higher returns. Moreover, social interaction appears to drive the purchase of within-industry stocks; an investment mistake. Overall, our results suggest a strong influence of co-workers on investment choices, but not an influence that improves the quality of investment decisions

Peer effects at work: The common stock investments of co-workers

Stock market behavior of individual investors is highly correlated with stock market behavior of their co-workers. For example, a ten percentage point increase in the fraction of co-workers that purchase stocks in a given month is associated with a two percentage point increase in the likelihood of individuals making a purchase. The high correlation exists even after taking controlling for individual socio-demographic characteristics and for time, stock, zip code, and plant fixed effects. Using data on family relations and on residential zip code, we show that the high correlation is not driven by peer effects at the family or zip code level. Moreover, workplace peer effects appear to be strong relative to geographical peer effects