What Can We Learn About the Sensitivity of Investment to Stock Prices with a Better Measure of Tobin's q?

This paper examines the responsiveness of investment to q (i.e., the ratio of a firm's market value to the replacement cost of its assets) using data on a unique type of firm: Real Estate Investment Trusts (REITs). For REITs, we have high quality estimates of the net asset value of the firm that we use to create relatively accurate measures of Tobin's q. In addition, REITs have institutional features that mitigate some of the complications faced by previous studies. We have three main results. First, there is little evidence of a statistical link between REIT investment and a traditional accounting-based measure of q. Second, REIT investment is highly sensitive to estimates of q that are based on analysts' appraisals of asset value. A REIT whose NAV-based q ratio rises from 1.0 to 1.1 will increase its assets by 4.3 percent in the next year. Third, the difference between the appraisal-based measure of q and the traditional accounting based measure typically increases with the age of the firm's assets and varies across types of properties. These results suggest that measurement error in q can lead to appreciable downward biases in investment sensitivities, even in an industry that seems to meet many of the assumptions in Tobin's original paper, but that Tobin's investment model performs well with a better measure of q.Investment; Tobin's q; Real Estate Investment Trusts

What Can We Learn About the Sensitivity of Investment to Stock Prices with a Better Measure of Tobin's q?

This paper examines the responsiveness of investment to q (i.e., the ratio of a firm's market value to the replacement cost of its assets) using data on a unique type of firm: Real Estate Investment Trusts (REITs). For REITs, we have high quality estimates of the net asset value of the firm that we use to create relatively accurate measures of Tobin's q. In addition, REITs have institutional features that mitigate some of the complications faced by previous studies. We have three main results. First, there is little evidence of a statistical link between REIT investment and a traditional accounting-based measure of q. Second, REIT investment is highly sensitive to estimates of q that are based on analysts' appraisals of asset value. A REIT whose NAV-based q ratio rises from 1.0 to 1.1 will increase its assets by 4.3 percent in the next year. Third, the difference between the appraisal-based measure of q and the traditional accounting based measure typically increases with the age of the firm's assets and varies across types of properties. These results suggest that measurement error in q can lead to appreciable downward biases in investment sensitivities, even in an industry that seems to meet many of the assumptions in Tobin's original paper, but that Tobin's investment model performs well with a better measure of q.Investment; Tobin's q; Real Estate Investment Trusts

Do Stock Prices Really Reflect Fundamental Values? The Case of REITs

Real estate investment trust (REIT) stock prices deviate substantially from net asset values (NAV). Using REIT data since 1990, we find large positive excess returns to a strategy of buying stocks that trade at a discount to NAV, and shorting stocks trading at a premium to NAV. Estimated alphas from this strategy are between 0.9% and 1.8% per month, with little risk. Trading costs and short-sale constraints are not prohibitive and the results strengthen when we control for differences in liquidity or the extent of institutional ownership. We find that some variation in P/NAV makes sense, as premiums are positively related to recent and future NAV growth. However, there appears to be too much volatility in P/NAV, giving rise to potential profits from short-term mean reversion. The closed-end fund literature has some similar findings on stock price deviations from fundamental value, but compared to closed-end funds REITs are much larger and have much higher insider and institutional ownership. These differences suggest that REIT premiums and discounts reflect more than just small investor sentiment, which is a common explanation of why closed-end fund prices deviate from their fundamental value.

Lafora disease offers a unique window into neuronal glycogen metabolism

Lafora disease (LD) is a fatal, autosomal recessive, glycogen-storage disorder that manifests as severe epilepsy. LD results from mutations in the gene encoding either the glycogen phosphatase laforin or the E3 ubiquitin ligase malin. Individuals with LD develop cytoplasmic, aberrant glycogen inclusions in nearly all tissues that more closely resemble plant starch than human glycogen. This Minireview discusses the unique window into glycogen metabolism that LD research offers. It also highlights recent discoveries, including that glycogen contains covalently bound phosphate and that neurons synthesize glycogen and express both glycogen synthase and glycogen phosphorylase

Organizational Form and Insurance Company Performance: Stocks versus Mutuals

One unusual feature of the U.S. property-casualty insurance industry is the coexistence of stock and mutual companies. This paper explores the performance of these forms in the industry through a dynamic assessment of how mutual and stock insurance companies respond to differences in their underwriting environment. Agency theories suggest that the stock company may be more 'opportunistic' and less obligated to their insureds than mutuals. This article assesses the responses by stock and mutual firms to changes in the underwriting environment from 1984 to 1991, using measures of individual firms' performance, by state and by line, in eight different lines of insurance. Stock companies are more likely than mutuals to reduce their business in unprofitable situations, and have higher losses than mutuals for a given amount of premiums.

Packaging and distributing ecological data from multisite studies

Studies of global change and other regional issues depend on ecological data collected at multiple study areas or sites. An information system model is proposed for compiling diverse data from dispersed sources so that the data are consistent, complete, and readily available. The model includes investigators who collect and analyze field measurements, science teams that synthesize data, a project information system that collates data, a data archive center that distributes data to secondary users, and a master data directory that provides broader searching opportunities. Special attention to format consistency is required, such as units of measure, spatial coordinates, dates, and notation for missing values. Often data may need to be enhanced by estimating missing values, aggregating to common temporal units, or adding other related data such as climatic and soils data. Full documentation, an efficient data distribution mechanism, and an equitable way to acknowledge the original source of data are also required

Techniques development for whale migration tracking

Effort leading to the completion of development and fabrication of expansible whale harnesses and whale-carried instrument pods is described, along with details of the gear. Early preparative effort for a January-February 1974 field expedition is reported

Secret-Sharing for NP

A computational secret-sharing scheme is a method that enables a dealer, that has a secret, to distribute this secret among a set of parties such that a "qualified" subset of parties can efficiently reconstruct the secret while any "unqualified" subset of parties cannot efficiently learn anything about the secret. The collection of "qualified" subsets is defined by a Boolean function. It has been a major open problem to understand which (monotone) functions can be realized by a computational secret-sharing schemes. Yao suggested a method for secret-sharing for any function that has a polynomial-size monotone circuit (a class which is strictly smaller than the class of monotone functions in P). Around 1990 Rudich raised the possibility of obtaining secret-sharing for all monotone functions in NP: In order to reconstruct the secret a set of parties must be "qualified" and provide a witness attesting to this fact. Recently, Garg et al. (STOC 2013) put forward the concept of witness encryption, where the goal is to encrypt a message relative to a statement "x in L" for a language L in NP such that anyone holding a witness to the statement can decrypt the message, however, if x is not in L, then it is computationally hard to decrypt. Garg et al. showed how to construct several cryptographic primitives from witness encryption and gave a candidate construction. One can show that computational secret-sharing implies witness encryption for the same language. Our main result is the converse: we give a construction of a computational secret-sharing scheme for any monotone function in NP assuming witness encryption for NP and one-way functions. As a consequence we get a completeness theorem for secret-sharing: computational secret-sharing scheme for any single monotone NP-complete function implies a computational secret-sharing scheme for every monotone function in NP

3D Printing of Advanced Biocomposites on Earth and Beyond

Human exploration off planet is severely limited by the cost of launching materials into space and re-supply. Thus materials brought from earth must be light, stable and reliable at destination. Using traditional approaches a lunar or Mars base would require either transporting a hefty store of metals or heavy manufacturing equipment and construction materials for in situ extraction; both would severely limit any other mission objectives. Long-term human space presence requires periodic replenishment, adding a massive cost overhead. Even robotic missions often sacrifice science goals for heavy radiation and thermal protection. Biology has the potential to solve these problems because it can replicate and repair itself, and do a wide variety of chemical reactions including making food, fuel and materials. Synthetic biology can greatly enhance and expand life's evolved repertoire. Using natural and synthetically altered organisms as the feedstock for additive manufacturing could one day make possible the dream of producing bespoke tools, food, smart fabrics and even replacement organs on demand. To this end our lab has produced a proof-of-concept bioprinter with nearly one-cell resolution. Genetically engineering yeast cells to secrete bioproducts subsequent to printing allows the potential to make biomaterials with a fine microstructure. Imagine a production system that, at a few micron scale resolution, can add mollusk shell for compressive strength per unit mass, spider silk or collagen for tensile strength per unit mass, and potentially biologically-deposited wires. Now imagine what new products can be enabled by such a technology, on earth or beyon

Socioeconomic indicators of health inequalities and female mortality: a nested cohort study within the United Kingdom Collaborative Trial of Ovarian Cancer Screening (UKCTOCS)

Evidence is mounting that area-level socioeconomic indicators are important tools for predicting health outcomes. However, few studies have examined these alongside individual-level education. This nested cohort study within the control arm of the United Kingdom Collaborative Trial of Ovarian Cancer Screening (UKCTOCS) assesses the association of mutually adjusted individual (education) and area-level (Index of Multiple Deprivation-IMD 2007) socioeconomic status indicators and all-cause female mortality