The Relative Importance of Earnings and Book Value in Regulated and Deregulated Markets: The Case of the Airline Industry

This paper examines the valuation effects of earnings and book values on security prices of the airline companies under two different market structures: the regulated and the deregulated periods. In regulated markets, and under the cost recovery plus adequate rate of return on assets, security prices are highly aligned with book values of the respective companies. In the airline industry, regulation took the form of guaranteed routes and of subsidies to service rural areas. In addition, many airlines provide international service which was not subject to US regulations. These features give rise to the differential effect of both book values and earnings. In deregulated times, airline firms operate in highly competitive markets with large airline firms enjoying the benefits of economy of scale and service diversification. Thus, both the asset capitalization (book value) and operational efficiencies (earnings) would be major indicators in the market assessment of the firm\u27s future profitability and security price. The literature lacks empirical evidence in examining the relative importance of earnings and book values in regulated and deregulated markets, especially in an airline industry. This paper aims at extending the literature examining the valuation relevance of earnings and book value in the assessment of security prices in the airline industry. The empirical results of this paper support the predictions of differential impact of earnings and book value in explaining security prices of the airline firms in both economic structures

Market Revaluations of Foreign Listings’ Reconciliations to U.S. Financial Reporting GAAP

The Securities and Exchange Commission (SEC) requires foreign firms wishing to list their securities on the U.S. exchanges to convert their financial statements to U.S.-based generally accepted accounting principles (GAAP) in a reconciliation filing known as Form 20-F. This paper extends prior research analyzing the importance of the SEC requirement by examining the value relevance to U.S. capital markets of Form 20-F reconciliation information under two additional hypotheses related to: i) investors\u27 anticipation of the reconciliation, and ii) investors\u27 perception of foreign countries\u27 enforcement and reliability in applying local accounting rules. We argue that the information content of the Form 20-F reconciliation data is preempted (at least partially) on the date of foreign earnings announcements because of investor anticipation of these reconciliations. Therefore, only significant unanticipated reconciliations exhibit value relevance on the date of filing. In addition, investor perception of the reliability of the reconciliations and the degree of confidence in foreign authorities enforcing local GAAP also affect the value relevance of the reconciliation data. We hypothesize that reconciliations made by firms from countries with mature and developed capital markets should be more value relevant to U.S. investors. Our results show that both unexpected foreign earnings and anticipated reconciliations to U.S. GAAP are significantly associated with unexpected market returns during the week of earnings announcements. The region of the foreign country is also significantly associated with market returns. However, unexpected reconciliations are not significantly associated with unexpected market returns during the week of Form 20-F filing

Gravitational Waves from Extragalactic Inspiraling Binaries: Selection Effects and Expected Detection Rates

We examine the selection effects that determine how the population of inspiraling binary compact objects (BCOs) is reflected by those potentially observed with ground-based interferometers like LIGO. We lay the ground-work for the interpretation of future observations in terms of constraints on the real population and, correspondingly, binary star evolution models. To determine the extra-galactic population of inspiraling binaries we combine data on distance and blue luminosity from galaxy catalogs with current models of the galactic BCO mass distribution to simulate the physical distribution of binaries in the nearby universe. We use Monte Carlo methods to determine the fraction of binaries observable by the LIGO detectors from each galaxy as a function of the BCO chirp mass. We examine separately the role of source distance, sky position, time of detection, and binary system chirp mass on detection efficiency and selection effects relevant to the three LIGO detectors. Finally, we discuss the implications of the nearby geography of space on anticipated GW detection and compare our results to previous studies, which have assumed uniform galaxy volume density and fixed chirp mass for binary compact objects. From these considerations, actual BCO inspiral observations or significant upper limits on the coalescence rate anticipated in the near future by ground-based interferometers can be used to improve our knowledge of the galactic binary inspiral rate and to constrain models of radio pulsar characteristics and binary star evolution channels leading to neutron star or black hole binaries.Comment: 35 pages, including 12 figures. Revised following refereeing. Accepted for September publication in Ap

The relation between star formation, morphology and local density in high redshift clusters and groups

We investigate how the [OII] properties and the morphologies of galaxies in clusters and groups at z=0.4-0.8 depend on projected local galaxy density, and compare with the field at similar redshifts and clusters at low-z. In both nearby and distant clusters, higher-density regions contain proportionally fewer star-forming galaxies, and the average [OII] equivalent width of star-forming galaxies is independent of local density. However, in distant clusters the average current star formation rate (SFR) in star-forming galaxies seems to peak at densities ~15-40 galaxies Mpc^{-2}. At odds with low-z results, at high-z the relation between star-forming fraction and local density varies from high- to low-mass clusters. Overall, our results suggest that at high-z the current star formation (SF) activity in star-forming galaxies does not depend strongly on global or local environment, though the possible SFR peak seems at odds with this conclusion. We find that the cluster SFR normalized by cluster mass anticorrelates with mass and correlates with the star-forming fraction. These trends can be understood given a) that the average star-forming galaxy forms about 1 Msun/yr in all clusters; b) that the total number of galaxies scales with cluster mass and c) the dependence of star-forming fraction on cluster mass. We present the morphology-density (MD) relation for our z=0.4-0.8 clusters, and uncover that the decline of the spiral fraction with density is entirely driven by galaxies of types Sc or later. For galaxies of a given Hubble type, we see no evidence that SF properties depend on local environment. In contrast with recent findings at low-z, in our distant clusters the SF-density relation and the MD-relation are equivalent, suggesting that neither of the two is more fundamental than the other.(abr.)Comment: 21 pages, 14 figures, accepted for publication in Ap

Judgments of learning index relative confidence, not subjective probability

The underconfidence-with-practice (UWP) effect is a common finding in calibration studies concerned with judgments of learning (JOLs) elicited on a percentage scale. The UWP pattern is present when, in a procedure consisting of multiple study-test cycles, mean scale JOLs underestimate mean recall performance on cycle 2 and beyond. Although this pattern is present both for items recalled and unrecalled on the preceding cycle, to date research has concentrated mostly on the sources of UWP for the latter type of items. The present study aimed at bridging this gap. In three experiments, we examined calibration on the third of three cycles. The results of Experiment 1 demonstrated the typical pattern of higher recall and scale JOLs for previously recalled items compared to unrecalled ones. More important, they also revealed that even though the UWP effect was found for both items previously recalled once and twice, its magnitude was greater for the former class of items. Experiments 2 and 3, which employed a binary betting task and a binary 0/100% JOL task, respectively, demonstrated that people can accurately predict future recall for previously recalled items with binary decisions. In both experiments, the UWP effect was absent both for items recalled once and twice. We suggest that the sensitivity of scale JOLs, but not binary judgments, to the number of previous recall successes strengthens the claim of Hanczakowski, Zawadzka, Pasek, and Higham (2013) that scale JOLs reflect confidence in, rather than the subjective probability of, future recall

How special are Brightest Group and Cluster Galaxies?

We use the Sloan Digital Sky Survey to construct a sample of 625 brightest group and cluster galaxies (BCGs) together with control samples of non-BCGs matched in stellar mass, redshift, and color. We investigate how the systematic properties of BCGs depend on stellar mass and on their privileged location near the cluster center. The groups and clusters that we study are drawn from the C4 catalogue of Miller et al. (2005) but we have developed improved algorithms for identifying the BCG and for measuring the cluster velocity dispersion. Since the SDSS photometric pipeline tends to underestimate the luminosities of large galaxies in dense environments, we have developed a correction for this effect which can be readily applied to the published catalog data. We find that BCGs are larger and have higher velocity dispersions than non-BCGs of the same stellar mass, which implies that BCGs contain a larger fraction of dark matter. In contrast to non-BCGs, the dynamical mass-to-light ratio of BCGs does not vary as a function of galaxy luminosity. Hence BCGs lie on a different fundamental plane than ordinary elliptical galaxies. BCGs also follow a steeper Faber-Jackson relation than non-BCGs, as suggested by models in which BCGs assemble via dissipationless mergers along preferentially radial orbits. We find tentative evidence that this steepening is stronger in more massive clusters. BCGs have similar mean stellar ages and metallicities to non-BCGs of the same mass, but they have somewhat higher alpha/Fe ratios, indicating that star formation may have occurred over a shorter timescale in the BCGs. Finally, we find that BCGs are more likely to host radio-loud active galactic nuclei than other galaxies of the same mass, but are less likely to host an optical AGN. The differences we find are more pronounced for the less massive BCGs.Comment: Replaced with slightly modified version accepted by MNRAS. 28 pages, 25 figures. Version with full resolution figures available at http://www.mpa-garching.mpg.de/~anja/bcgs_avdl.pd

Phosphino-Triazole Ligands for Palladium-Catalyzed Cross-Coupling

Twelve 1,5-disubtituted and fourteen 5-substituted 1,2,3-triazole derivatives bearing diaryl or dialkyl phosphines at the 5-position were synthesized and used as ligands for palladium-catalyzed Suzuki–Miyaura cross-coupling reactions. Bulky substrates were tested, and lead-like product formation was demonstrated. The online tool SambVca2.0 was used to assess steric parameters of ligands and preliminary buried volume determination using XRD-obtained data in a small number of cases proved to be informative. Two modeling approaches were compared for the determination of the buried volume of ligands where XRD data was not available. An approach with imposed steric restrictions was found to be superior in leading to buried volume determinations that closely correlate with observed reaction conversions. The online tool LLAMA was used to determine lead-likeness of potential Suzuki–Miyaura cross-coupling products, from which 10 of the most lead-like were successfully synthesized. Thus, confirming these readily accessible triazole-containing phosphines as highly suitable ligands for reaction screening and optimization in drug discovery campaigns

The ESO Distant Cluster Sample: galaxy evolution and environment out to z=1

The ESO Distant Cluster Survey (EDisCS, P.I. Simon D.M. White, LP 166.A-0162) is an ESO large programme aimed at studying clusters and cluster galaxies at z=0.4-1. How different is the evolution of the star formation activity in clusters, in groups and in the field? Does it depend on cluster mass and/or the local galaxy density? How relevant are starburst and post-starburst galaxies in the different environments? Is there an evolution in the galaxies' structures, and if so, is this related to the changes in their star formation activity? These are some of the main questions that have been investigated using the EDisCS dataset.Comment: to appear in The Messenger, issue June 200

Disentangling Direct from Indirect Co-Evolution of Residues in Protein Alignments

Predicting protein structure from primary sequence is one of the ultimate challenges in computational biology. Given the large amount of available sequence data, the analysis of co-evolution, i.e., statistical dependency, between columns in multiple alignments of protein domain sequences remains one of the most promising avenues for predicting residues that are contacting in the structure. A key impediment to this approach is that strong statistical dependencies are also observed for many residue pairs that are distal in the structure. Using a comprehensive analysis of protein domains with available three-dimensional structures we show that co-evolving contacts very commonly form chains that percolate through the protein structure, inducing indirect statistical dependencies between many distal pairs of residues. We characterize the distributions of length and spatial distance traveled by these co-evolving contact chains and show that they explain a large fraction of observed statistical dependencies between structurally distal pairs. We adapt a recently developed Bayesian network model into a rigorous procedure for disentangling direct from indirect statistical dependencies, and we demonstrate that this method not only successfully accomplishes this task, but also allows contacts with weak statistical dependency to be detected. To illustrate how additional information can be incorporated into our method, we incorporate a phylogenetic correction, and we develop an informative prior that takes into account that the probability for a pair of residues to contact depends strongly on their primary-sequence distance and the amount of conservation that the corresponding columns in the multiple alignment exhibit. We show that our model including these extensions dramatically improves the accuracy of contact prediction from multiple sequence alignments