THE REAL OPTIONS PUZZLE FOR MICHIGAN TART CHERRY PRODUCERS

Capital budgeting decisions faced by tart cherry producers often challenge our traditional valuation techniques. Real Options Valuation (ROV) methods may be useful but assumptions of existing ROV approaches are restrictive and, in some cases, unrealistic. In this paper we assert that use of existing option pricing methods can not be justified. Instead, dynamic programming approach is more appropriate. We develop a multi-period model and use it to obtain an optimal orchard replacement policy. The model is applied to an example farm from Northwestern Michigan and the results provide the following messages. First, flexibility options can be estimated for individual tart cherry producers using the DP approach albeit, indirectly. Second, a farmer who uses the DP approach to develop contingency optimal replacement rules will be better off than one who uses an ad hoc standard replacement rule. Third, if the SW climate scenario shifts to NW Michigan, tart cherry orchard values may fall substantially with implications on the future of tart cherry production in that region, unless compensating price increases follow.Farm Management,

Older and Wiser? Birth Order and IQ of Young Men

While recent research finds strong evidence that birth order affects children's outcomes such as education and earnings, the evidence on the effects of birth order on IQ is decidedly mixed. This paper uses a large dataset on the population of Norway that allows us to precisely measure birth order effects on IQ using both cross-sectional and within-family methods. Importantly, irrespective of method, we find a strong and significant effect of birth order on IQ, and our results suggest that earlier born children have higher IQs. Our preferred estimates suggest differences between first-borns and second-borns of about one fifth of a standard deviation or approximately 3 IQ points. Despite these large average effects, birth order only explains about 3% of the within-family variance of IQ. When we control for birth endowments, the estimated birth order effects increase. Thus, our analysis suggests that birth order effects are not biologically determined. Also, there is no evidence that birth order effects occur because later-born children are more affected by family breakdown.

Under Pressure? The Effect of Peers on Outcomes of Young Adults

A variety of public campaigns, including the “Just Say No” campaign of the 1980s and 1990s that encouraged teenagers to “Just Say No to Drugs”, are based on the premise that teenagers are very susceptible to peer influences. Despite this, very little is known about the effect of school peers on the long-run outcomes of teenagers. This is primarily due to two factors: the absence of information on peers merged with long-run outcomes of individuals and, equally important, the difficulty of separately identifying the role of peers. This paper uses data on the population of Norway and idiosyncratic variation in cohort composition within schools to examine the role of peer composition in 9th grade on longer-run outcomes such as IQ scores at age 18, teenage childbearing, postcompulsory schooling educational track, adult labor market status, and earnings. We find that outcomes are influenced by the proportion of females in the grade, and these effects differ for men and women. Other peer variables (average age, average mother’s education) have little impact on the outcomes of teenagers.

Under Pressure? The Effect of Peers on Outcomes of Young Adults

A variety of public campaigns, including the “Just Say No” campaign of the 1980s and 1990s that encouraged teenagers to “Just Say No to Drugs”, are based on the premise that teenagers are very susceptible to peer influences. Despite this, very little is known about the effect of school peers on the long-run outcomes of teenagers. This is primarily due to two factors: the absence of information on peers merged with long-run outcomes of individuals and, equally important, the difficulty of separately identifying the role of peers. This paper uses data on the population of Norway and idiosyncratic variation in cohort composition within schools to examine the role of peer composition in 9th grade on longer-run outcomes such as IQ scores at age 18, teenage childbearing, postcompulsory schooling educational track, adult labor market status, and earnings. We find that outcomes are influenced by the proportion of females in the grade, and these effects differ for men and women. Other peer variables (average age, average mother’s education) have little impact on the outcomes of teenagers.Peer Effects, Education

Small Family, Smart Family? Family Size and the IQ Scores of Young Men

How do families influence the ability of children? Cognitive skills have been shown to be a strong predictor of educational attainment and future labor market success; as a result, understanding the determinants of cognitive skills can lead to a better understanding of children's long run outcomes. This paper uses a large dataset on the male population of Norway and focuses on one family characteristic: the effect of family size on IQ. Because of the endogeneity of family size, we instrument for family size using twin births and sex composition. IV estimates using sex composition as an instrument show no negative effect of family size; however, IV estimates using twins imply that family size has a negative effect on IQ. Our results suggest that effect of family size depends on the type of family size intervention. We conclude that there are no important negative effects of expected increases in family size on IQ but that unexpected shocks to family size resulting from twin births have negative effects on the IQ of existing children.

Classifying the secondary component of the binary star W Aquilae

AIMS: The object W Aql is an asymptotic giant branch (AGB) star with a faint companion. By determining more carefully the properties of the companion, we hope to better constrain the properties of the AGB star. METHODS: We present new spectral observations of the binary star W Aql at minimum and maximum brightness and new photometric observations of W Aql at minimum brightness. RESULTS: The composite spectrum near minimum light is predominantly from the companion at wavelengths $\lambda$ < 6000 $\AA$. This spectrum can be classified as F8 to G0, and the brightness of the companion is that of a dwarf star. Therefore, it can be concluded that the companion is a main sequence star. From this, we are able to constrain the mass of the AGB component to 1.04 - 3 $M_\odot$ and the mass of the W Aql system to 2.1 - 4.1 $M_\odot$ . Our photometric results are broadly consistent with this classification and suggest that the main sequence component suffers from approximately 2 mag of extinction in the V band primarily due to the dust surrounding the AGB component.Comment: 5 pages, 1 figure, research not

Why the Apple Doesn't Fall Far: Understanding Intergenerational Transmission of Human Capital

Parents with higher education levels have children with higher education levels. However, is this because parental education actually changes the outcomes of children, suggesting an important spillover of education policies, or is it merely that more able individuals who have higher education also have more able children? This paper proposes to answer this question by using a unique dataset from Norway. Using the reform of the education system that was implemented in different municipalities at different times in the 1960s as an instrument for parental education, we find little evidence of a causal relationship between parents' education and children's education, despite significant OLS relationships. We find 2SLS estimates that are consistently lower than the OLS estimates with the only statistically significant effect being a positive relationship between mother's education and son's education. These findings suggest that the high correlations between parents'and children's education are due primarily to family characteristics and inherited ability and not education spillovers.

Age-related changes to lumbosacral spinal cord motoneurons that modulate bladder and bowel functions in male C57BL/6 mice

Incontinence and sexual dysfunction are often increased in the aged human population. In rats and mice the pattern of micturition and faecal clearance also changes with ageing and is suggestive of bladder and bowel dysfunction

Are children 'normal'?

In his classic work on the economics of fertility, Becker (1960) suggests that children are likely “normal.” We examine this contention. Our first step is documenting an empirical regularity about the cross section of white married couples in the U.S.: when we restrict comparisons to households living in broadly similar locations (e.g., in expensive urban areas, or in rural areas), completed fertility is positively correlated with the husband’s income. Two alternative models rationalize the data—one in which children are “normal” and a second in which the observed pattern emerges solely as a consequence of rational sorting by households. In an effort to sort out causal effects, we undertake a rather specialized empirical exercise to analyze the localized impact on fertility of the mid-1970s increase in world energy prices—an exogenous shock that substantially increased men’s incomes in the Appalachian coal-mining region. We find that children are indeed “normal.”Demography

The role of location in evaluating racial wage disparity

A standard object of empirical analysis in labor economics is a modified Mincer wage function in which an individual's log wage is specified to be a function of education, experience, and an indicator variable identifying race. Researchers hope that estimates from this exercise can be informative about the impact of minority status on labor market success. Here we set out a theoretical justification for this regression in a context in which individuals live and work in different locations. Our model leads to the traditional approach, but with the important caveat that the regression should include location-specific fixed effects. Given this insight, we reevaluate evidence about the black-white wage disparity in the United States.Income distribution ; Wages ; Discrimination in employment