Earthquake fatalities: the interaction of nature and political economy

In our theoretical model, we show that as per capita income decreases and the level of inequality increases, different segments of society are less likely to agree on the distribution of the burden of the necessary collective action, causing the relatively-wealthy simply to self-insure against the disaster while leaving the relatively-poor to its mercy. We then evaluate 269 large earthquakes occurring worldwide (1960-2002), taking into account other factors such as an earthquake's magnitude, depth and proximity to population centers. Using a Negative Binomial estimation strategy with both random and fixed estimators, we find strong evidence of the theoretical model’s predictions.Earthquake, Fatalities, Nature, Political economy

Managerial Stock Ownership As A Corporate Control Device: When Is Enough, Enough?

It has long been accepted that managerial stock ownership, beyond some range of possible entrenchment, can be an effective means of aligning the interests of professional managers with those of a firm’s outside owners to the benefit of firm performance. In this paper, we offer evidence on the effectiveness of managerial stock ownership as a corporate control device by analyzing the behavior of 81 thrift institutions operating over the six-year period, 1989-1994. Based on the estimation of stochastic cost and profit frontiers, as well as other performance measures, our results suggest that managerial stock ownership provides an effective corporate control device. However, this device is only effective as managerial holdings surpass about 33% of outstanding shares for improvements in cost efficiency and about 40% for profit efficiency

The Employment Impact of the Age Discrimination in Employment Act

This paper presents an empirical analysis of the macro employment effects of the federal Age Discrimination in Employment Act as amended. The results indicate mixed effects on the legislation on older workers and workers of traditional retirement age

The Employment Impact of the Age Discrimination in Employment Act

This paper presents an empirical analysis of the macro employment effects of the federal Age Discrimination in Employment Act as amended. The results indicate mixed effects on the legislation on older workers and workers of traditional retirement age

Managerial Stock Ownership As A Corporate Control Device: When Is Enough, Enough?

It has long been accepted that managerial stock ownership, beyond some range of possible entrenchment, can be an effective means of aligning the interests of professional managers with those of a firm’s outside owners to the benefit of firm performance. In this paper, we offer evidence on the effectiveness of managerial stock ownership as a corporate control device by analyzing the behavior of 81 thrift institutions operating over the six-year period, 1989-1994. Based on the estimation of stochastic cost and profit frontiers, as well as other performance measures, our results suggest that managerial stock ownership provides an effective corporate control device. However, this device is only effective as managerial holdings surpass about 33% of outstanding shares for improvements in cost efficiency and about 40% for profit efficiency

Natural Disasters and Foreign Direct Investment

The world’s population has witnessed the concurrence of two powerful global trends: an unprecedented growth in foreign direct investment (FDI) and an increase in natural disasters. Since investment decisions are based on an evaluation of expected risks and returns, we consider whether FDI decisions are influenced by natural disasters. We do so by considering the relation between FDI in 94 countries between 1984 and 2004 and the number of disasters striking those countries. Across a variety of empirical tests that control for two-way fixed effects we find natural disasters to be negatively and statistically significantly associated with a country’s FDI.

Earthquake fatalities : the interaction of nature and political economy

To say that the level of fatalities resulting from an earthquake is inversely related to a country\u27s per capita level of income is hardly novel. What makes our approach novel is that we relate fatalities to both per capita income and the level of inequality that exists within a country through their joint impact on the likelihood of collective action being taken to mitigate the destructive potential of quakes. We first develop a theoretical model which offers an explanation as to why, in some environments, different segments of society prove incapable of arriving at what all parties perceive to be an agreeable distribution of the burden of the necessary collective action, causing the relatively wealthy simply to self-insure against the disaster while leaving the relatively poor to its mercy. Following this, we test our theoretical model by evaluating 269 large earthquakes occurring worldwide, between 1960 and 2002, taking into account other factors that influence a quake\u27s destructiveness such as its magnitude, depth and proximity to population centers. Using a Negative Binomial estimation strategy with both random and fixed estimators, we find strong evidence of the theoretical model\u27s predictions. That is, while earthquakes themselves are natural phenomena beyond the reach of humankind, our collective inaction with respect to items like the creation and enforcement of building codes, failure to retrofit structures and to enact quake-sensitive zoning clearly plays a part in determining the actual toll that a given quake takes. And, it is through these and other examples of collective inaction that limited per capita income and inequality couple together with a given quake\u27s natural destructive power in determining the actual fatalities resulting from a quake.<br /