Who Chooses Defined Contribution Plans?

This paper provides new evidence on what types of individuals are most likely to choose a defined contribution (DC) plan over a defined benefit (DB) plan. Making use of administrative data from the State Universities Retirement System (SURS) of Illinois, we study the decisions of nearly 50,000 new employees who make a one-time, irrevocable choice between a traditional DB plan, a portable DB plan, and an entirely self-managed DC plan. Because the SURS-covered earnings of these employees are not covered under the Social Security system, their choices provides insight into the DB vs. DC preferences of individuals with regard to a primary source of their retirement income. We find that a majority of participants fail to make an active decision and are thus defaulted into the traditional DB plan after 6 months. We also find that those individuals who are most likely to be financially sophisticated are most likely to choose the self-managed DC plan, despite the fact that, given plan parameters, the DC plan is inferior to the portable DB plan under reasonable assumptions about future financial market returns. We discuss both rational and behavioral reasons that might explain this finding.

Economic Performance in Alberta Dairy: An Application of the Mimic Model

Dairy production at the farm-level is undergoing a rapid transformation in preparation for more open competition in the future. However, the means by which dairy farms can best improve their economic performance is of some question. Using measures of allocative, technical, and overall efficiency as indicators of a latent "performance" variable, this study specifies and estimates a multiple-indicator, multiple-cause (MIMIC) model of Alberta dairy production. Variables thought to "cause" performance include herd size, milk yield, breeding and veterinary expense, capital-to-labour ratio, concentrate-to-forage ratio, and operator experience. The results show that gains in performance may be made through increased capital intensity, greater spending on breeding and herd health, and, albeit marginally, through increased milk yields. Despite current trends toward larger dairy herds, this may not be a fruitful avenue for future improvements in dairy efficiency.Livestock Production/Industries,

Cost and Efficiency in Alberta Dairy Production

This study investigates the relationships between farm size, milk yield, cost of production, and technical efficiency in the Alberta dairy industry. Estimates of a stochastic production frontier are obtained with two alternative methods; an iterative "average frontier: (AF) procedure and a maximum-likelihood composed error (CE) term method. An index of technical efficiency is calculated for every herd in the sample, with the AF method resulting in an average efficiency ratio of 85 percent, and the CE method producing an average efficiency ratio of 83 percent. Regressions of production cost on milk output, herd size, and efficiency are used to test for the effects of size economies, yield economies, and technical efficiency on production cost. These results suggest that herd expansion, on average, would lower the average cost of production throughout the province. Romain and Lambert use a similar method in a study of Quebec and Ontario dairy farmers which shows a limited potential to exploit economies of herd size. While not a formal test of the similarity of the two industries, the results of this study indicate a significant difference between the optimal structure of dairy production in Alberta and Quebec. Such regional differences will have important implications for the possible reapportionment of the national milk market, whether by regulatory or free-market mechanisms.Livestock Production/Industries,

Is a Bird in Hand Worth More than a Bird in the Bush? Intergenerational Transfers and Savings Behavior

This paper provides new evidence on the decomposition of aggregate household wealth into life-cycle and transfer wealth. Using the 1998 Survey of Consumer Finances, it finds that transfer wealth accounts for approximately one-fifth to one-quarter of aggregate wealth, suggesting a larger role for life-cycle savings than some previous estimates. Despite the smaller aggregate size of transfer wealth, its concentration among a small number of households suggests that it can still have an important effect on the savings decisions of recipients. Estimates suggest that past receipts of transfer wealth reduce life-cycle savings by as much as dollar-for-dollar, while expected future transfers do not produce such a crowd-out effect.

Dynamic Data Structures for Document Collections and Graphs

In the dynamic indexing problem, we must maintain a changing collection of text documents so that we can efficiently support insertions, deletions, and pattern matching queries. We are especially interested in developing efficient data structures that store and query the documents in compressed form. All previous compressed solutions to this problem rely on answering rank and select queries on a dynamic sequence of symbols. Because of the lower bound in [Fredman and Saks, 1989], answering rank queries presents a bottleneck in compressed dynamic indexing. In this paper we show how this lower bound can be circumvented using our new framework. We demonstrate that the gap between static and dynamic variants of the indexing problem can be almost closed. Our method is based on a novel framework for adding dynamism to static compressed data structures. Our framework also applies more generally to dynamizing other problems. We show, for example, how our framework can be applied to develop compressed representations of dynamic graphs and binary relations

Board composition, process, and activism: evidence within American firms

This study provided an empirical test of the effects of compositional and process variables on board activism. The attributes examined were functional area knowledge, independence, duality, and effort norms. The findings from this study provided support for the positive relationships between both functional area knowledge and effort norms and board activism. The strong relationship between effort norms and activism indicates the importance of process variables in board research and the need for additional research using process variables in a board context giving further insight into board activism and governance. Additionally, the relationship between functional area knowledge and board activism highlights how boards ability to meet cognitive demands is critical in board performance. These results as well as future research directions are examined in the discussion.board activism, board governance, board attributes, strategic management.

Negotiating the Korea-United States Free Trade Agreement

Difficult and sensitive issues will command the attention of US and Korean officials as they negotiate a bilateral free trade agreement (FTA). The United States will have to put long-standing US barriers to Korean exports of textiles, apparel, and steel on the table and resolve problems with South Korean access to the US visa waiver program. In turn, South Korea will have to open new opportunities for US goods and services, including autos, beef, and rice. Such a deal will pose a stiff political challenge for Korean officials. However, they will be under pressure in any event to reform their farm programs--either in the context of a final deal in the WTO talks or in response to Chinese initiatives in the region, which Korea will need to match. Both Korea and the United States also have important foreign policy interests in the FTA, particularly enhanced security on the Korean peninsula. South Korea would like the FTA to promote the policy of constructive engagement with North Korea, which the former has been pursuing by extending trade preferences to goods produced in the Kaesong industrial complex in North Korea. However, such a request would put the entire negotiation in jeopardy since the US Congress would reject preferences for the North Korean regime.

Short-term Osteoclastic Activity Induced by Locally High Concentrations of Recombinant Human Bone Morphogenetic Protein–2 in a Cancellous Bone Environment

Study Design. An experimental study investigating osteoclastic activity induced by rhBMP-2 in sheep. Objective. To examine the effects of increasing local rhBMP-2 concentration on osteoclastic response and peri-implant bone resorption. Summary of Background Data. Level I clinical studies have established the safe and effective volume and concentration of rhBMP-2 delivered on an absorbable collagen sponge. However, peri-implant bone resorption appearing as decreased mineral density has been observed radiographically in rare instances after implantation of rhBMP-2 on an absorbable collagen sponge (rhBMP-2/ACS). Methods. Bilateral corticocancellous defects were created in the distal femora of 30 adult sheep. Combinations of rhBMP-2/ACS implant volume (V) (1V = normal fill or 2V = overfilled) and rhBMP-2 solution concentration (⤫) (1 ⤫ normal concentration or 3.5 ⤫ = hyperconcentrated) resulted in local rhBMP-2 concentrations of 0⤫, 1⤫, 2⤫, 3.5⤫, and 7⤫ the estimated effective concentration for this model. Faxitron radiography, quantitative CT, histology, and quantitative histomorphometry were conducted in a blinded fashion to analyze the effect of the treatments. Results. At 1 week, the normal fill-normal concentration implants (1⤫) produced the least transient osteoclastic activity resulting in limited peri-implant resorption. Overfilledhyperconcentrated implants (2⤫, 3.5⤫) demonstrated moderate resorption zones. Overfilled-hyperconcentrated implants (7⤫) demonstrated extensive osteoclastic activity and marked resorption. Results at 4 and 8 weeks revealed dense osteoid and bone in the voids with progressive bony healing. Control defects showed no osteoclastic activity with little to no bony healing. Conclusion. Increasing the local rhBMP-2 concentration by overfilling the defect with rhBMP-2/ACS or hyper-concentrating the rhBMP-2 solution on the absorbable collagen sponge led to a concentration-dependent osteoclastic resorption of peri-implant bone. The osteoclastic effect was transient, and progressive healing took place over the 8-week survival period

Why Do Institutional Plan Sponsors Hire and Fire their Investment Managers?

This paper examines the investment allocation decisions of pension plans, endowments, foundations, and other institutional plan sponsors. The experience and education of plan sponsors and the environment (both regulatory and agency) of the institutional market suggests that institutional investors rely less on past performance and use diffe rent criteria when evaluating performance compared to mutual fund investors. Institutional investors are expected to be less concerned with total returns and more considerate of benchmark-adjusted excess returns, and the consistency with which they are delivered, over longer time horizons. An examination of asset and account flows for actively-managed U.S. equity products is largely consistent with these expectations. The consistency with which managers deliver positive or negative active returns relative to the S&P500 over multiple horizons, without regard to the magnitude of these returns, plays a key role in determining the flow of assets among investment products. Style benchmarks play a larger role in determining account movements, which is found to employ more criteria than asset moves. However, total return is also considered, as the magnitudes of a one-year loss and 3 and 5-year total returns are found to be incremental factors in plan sponsors’ allocation decisions. One explanation for this result is the principal-agent arrangement faced by plan sponsors. Although the sponsors may be more sophisticated than the typical retail investor, their clients, investors and the investment board, may not be. Plan sponsors may minimize job risk by hiring and firing managers based on excess returns with incremental allocations based on total returns, thereby satisfying both their mandate and their clients. It is also found that smaller and older products capture relatively greater flows.pension plans, endowments, foundations

Models of verbal working memory capacity: What does it take to make them work?

Theories of working memory (WM) capacity limits will be more useful when we know what aspects of performance are governed by the limits and what aspects are governed by other memory mechanisms. Whereas considerable progress has been made on models of WM capacity limits for visual arrays of separate objects, less progress has been made in understanding verbal materials, especially when words are mentally combined to form multiword units or chunks. Toward a more comprehensive theory of capacity limits, we examined models of forced-choice recognition of words within printed lists, using materials designed to produce multiword chunks in memory (e.g., leather brief case). Several simple models were tested against data from a variety of list lengths and potential chunk sizes, with test conditions that only imperfectly elicited the interword associations. According to the most successful model, participants retained about 3 chunks on average in a capacity-limited region of WM, with some chunks being only subsets of the presented associative information (e.g., leather brief case retained with leather as one chunk and brief case as another). The addition to the model of an activated long-term memory component unlimited in capacity was needed. A fixed-capacity limit appears critical to account for immediate verbal recognition and other forms of WM. We advance a model-based approach that allows capacity to be assessed despite other important processing contributions. Starting with a psychological-process model of WM capacity developed to understand visual arrays, we arrive at a more unified and complete model