Window Dressing, Data Mining, Or Data Errors: A Re-Examination Of The Dogs Of The Dow Theory

We re-examine the Dow dividend yield anomaly to ascertain if data errors create the superior returns of the trading rule.  Empirical testing, using both parametric and nonparametric methods, suggests that the trading rule outperforms the index.  Additionally, data errors are not the drivers of superior trading rule returns.  Moreover, the Chow breakpoint test of structural stability suggests that neither window dressing nor data mining explain this phenomenon.  Finally, a turn of the year formation date fails to explain superior trading rule returns, further mitigating the data mining explanation

Characterizing the tropospheric ozone response to methane emission controls and the benefits to climate and air quality

Reducing methane (CH4) emissions is an attractive option for jointly addressing climate and ozone (O3) air quality goals. With multidecadal full-chemistry transient simulations in the MOZART-2 tropospheric chemistry model, we show that tropospheric O3 responds approximately linearly to changes in CH4 emissions over a range of anthropogenic emissions from 0–430 Tg CH4 a−1 (0.11–0.16 Tg tropospheric O3 or ∼11–15 ppt global mean surface O3 decrease per Tg a−1 CH4 reduced). We find that neither the air quality nor climate benefits depend strongly on the location of the CH4 emission reductions, implying that the lowest cost emission controls can be targeted. With a series of future (2005–2030) transient simulations, we demonstrate that cost-effective CH4 controls would offset the positive climate forcing from CH4 and O3 that would otherwise occur (from increases in NOx and CH4 emissions in the baseline scenario) and improve O3 air quality. We estimate that anthropogenic CH4 contributes 0.7 Wm−2 to climate forcing and ∼4 ppb to surface O3 in 2030 under the baseline scenario. Although the response of surface O3 to CH4 is relatively uniform spatially compared to that from other O3 precursors, it is strongest in regions where surface air mixes frequently with the free troposphere and where the local O3 formation regime is NOx-saturated. In the model, CH4 oxidation within the boundary layer (below ∼2.5 km) contributes more to surface O3 than CH4 oxidation in the free troposphere. In NOx-saturated regions, the surface O3 sensitivity to CH4 can be twice that of the global mean, with >70% of this sensitivity resulting from boundary layer oxidation of CH4. Accurately representing the NOx distribution is thus crucial for quantifying the O3 sensitivity to CH4

Stratospheric aerosol - Observations, processes, and impact on climate

Interest in stratospheric aerosol and its role in climate have increased over the last decade due to the observed increase in stratospheric aerosol since 2000 and the potential for changes in the sulfur cycle induced by climate change. This review provides an overview about the advances in stratospheric aerosol research since the last comprehensive assessment of stratospheric aerosol was published in 2006. A crucial development since 2006 is the substantial improvement in the agreement between in situ and space-based inferences of stratospheric aerosol properties during volcanically quiescent periods. Furthermore, new measurement systems and techniques, both in situ and space based, have been developed for measuring physical aerosol properties with greater accuracy and for characterizing aerosol composition. However, these changes induce challenges to constructing a long-term stratospheric aerosol climatology. Currently, changes in stratospheric aerosol levels less than 20% cannot be confidently quantified. The volcanic signals tend to mask any nonvolcanically driven change, making them difficult to understand. While the role of carbonyl sulfide as a substantial and relatively constant source of stratospheric sulfur has been confirmed by new observations and model simulations, large uncertainties remain with respect to the contribution from anthropogenic sulfur dioxide emissions. New evidence has been provided that stratospheric aerosol can also contain small amounts of nonsulfate matter such as black carbon and organics. Chemistry-climate models have substantially increased in quantity and sophistication. In many models the implementation of stratospheric aerosol processes is coupled to radiation and/or stratospheric chemistry modules to account for relevant feedback processes

Tobin\u27s q, Agency Conflicts, and Differential Wealth Effects of International Joint Ventures

This article examines announcement effects of 240 international joint ventures (IJVs) undertaken by US firms to ascertain their impact on shareholders\u27 wealth. The objective is to ascertain whether the mixed results of announcement effects reported in the literature can be explained. Theory suggests that IJVs would result in differential stock price reactions due to firm-specific characteristics. Therefore, it is hypothesized that IJVs would elicit a positive stock price reaction, on average. Also, it is hypothesized that this reaction should be greater for high Tobin\u27s q firms and for low free cash flow firms. Empirical analysis reveals that firm-specific characteristics do influence announcement effects and suggests that these factors may explain the mixed announcement effects documented in the literature

Are N + 1 Heads Better Than One? The Case of Mutual Fund Managers

Recent studies find that mutual funds exhibit differential and persistent performance which is frequently attributed to superior managerial decision making. We extend the literature by examining the impact of the fund\u27s management structure on performance outcomes. Specifically, we examine directly whether superior outcomes, in terms of risk-adjusted returns, may be explained by behavioral decision making theory that asserts that teams make better decisions than individuals. Empirical results are consistent with the classical decision making theory and the efficient market hypothesis