This paper tests whether geocaching, a real-world treasure hunt activity using GPS devices and clues provided by other participants, can be modeled as an addictive pursuit. Using over 36 million online activity logs posted by more than 675,000 users in 2010, we find strong evidence that the activity follows a pattern of rational addiction. The result has implications not only for this activity, but for a host of other social activities that increasingly blur the edges between online and real-world communities and activities.
The following article tests the wealth-building nature of derivatives usage in non-financial firms. Investigating 434 firms and employing univariate and multivariate tests, it uses both the fair values and notional values of firms’ derivatives contracts to determine whether derivatives usage enhances or destroys firm value.
The ultimate goal of any world-class swimmer is to break a record, and technology enables that accomplishment. Using 40 years of data at the individual, national and international level, we identify the quantitative impact that innovation has had on the number of record breaks. We find small but statistically significant impacts on both the number of breaks and the interval between breaks.
Water scarcity presents an obstacle to economic development in the western United States. Water right markets promote efficient allocation, helping states to derive the highest possible economic benefit from available resources, and allowing western water supplies to support new development and population growth. However, uncertainty surrounding water right market values threatens the ability of water markets to efficiently allocate water. To address this problem, we employ econometric analysis techniques to estimate the values market participants place on shares of ditch company water rights in Colorado’s South Platte basin. Our analysis demonstrates that ditch company share buyers value proximity, reliability, and flexibility.
The effect of spatial factors on competition and the price of gasoline have been sparsely explored by previous studies. Existing work examines how gasoline prices differ based on distance from the distribution site as well as how cost factors influence gasoline prices. Using market data from six midsized U.S. metro areas with similar isolation from neighboring retail markets, this paper examines the effects of location on retail price, while controlling for brand effects. Spatial regression analysis accommodates the potential of spatially correlated errors, and sensitivity analysis tests for several measures of retail location concentration. Results point to reproducible brand premiums and some location-based price differences, but also show the counterintuitive finding that areas with more market competition do not show significantly lower retail gas prices.
Using over 250,000 U.S. patent citations, we test whether knowledge transfers in the energy sector are sensitive to distance, and whether that sensitivity has changed over time. Controlling for self-citation by inventor, assignee and examiner, multivariate regression analysis shows that physical distance is becoming less important for spillovers with time.
Across the West, water transfers generate controversy. In Colorado’s Arkansas River basin urban growth and harsh farming conditions have led to water transfers from agricultural to urban uses. Much of this water left the Arkansas basin and was transferred north to the city of Aurora in the South Platte River basin. Several studies have shown that these transfers have had significant secondary economic impacts associated with the removal of irrigated land from production. In response, new methods of sharing water are being developed to allow water transfers that benefit both the farm and urban economies. One such project currently under study is the Arkansas Valley “Super Ditch”, a rotational crop fallowing plan based long-term water leasing designed to provide an annual supply of 31.6 Mm3. This paper analyzes the economic impacts of implementing the "Super Ditch" as a locally developed alternative to "buy and dry".
Water markets in the western United States have expanded over the last 40 years driven by two forces – population growth in the West and Southwest and limited development of new storage projects. Until 2008 house prices, home construction and population growth appeared to be locked in an ever-increasing upward trend. With little historical experience to the contrary, water market prices similarly appeared to be driven by real estate development. The collapse of the housing market in the last three years provides an opportunity to examine the connection between the real estate and water markets.
Following the legalization of abortion in the United States, scholars have studied its impact on a wide variety of factors including women’s educational choices and labor force decisions, abortion rates, and most controversially, crime. Economists have also investigated the determinants of state abortion restrictions across the United States, exploring the importance of demographic characteristics, locational availability, and the strength of interest advocacy groups. Notably absent from the existing literature is an examination of the impact of legalized abortion and the restrictions of its use on the decision to use oral contraceptives. Earlier work has established that states with more lenient laws regarding access to contraceptive services by minors have greater pill use, but the impact of the legal framework surrounding abortion restrictions has not been examined. The focus of this paper is an analysis of the possibility that variation in state abortion availability, proxied by legislation restricting a woman’s reproductive rights, may generate variation in the use of birth control pills. It is reasonable to expect that without the option of terminating a pregnancy (or in states where the cost of doing so is higher), that oral contraceptives would be more widely utilized. Our findings reveal that restrictions on abortion funding have a significant and positive impact on a woman’s decision to use the pill. In addition, women who live in states with higher abortion rates, a likely representation of the ease of terminating an unwanted pregnancy and proxy for the entirety of abortion restrictions, are less likely to use the pill. These results indicate that women are forward thinking when making their contraceptive decisions, at least relative to abortion legislation. If individuals are forward thinking enough such that legislation and policy governing the consequences for today's actions can affect today's decisions, then there are important policy implications for increasing health outcomes.
This series on the theory of financial management offers insight into the roles of stockholder wealth maximization, the risk-return tradeoff, and agency conflicts as they apply to major topics in finance. The current article investigates capital budgeting. Much literature addresses this topic, with a number of articles challenging mainstream theories, some investigating agency problems, and a few empirically testing the relationships taught in most managerial finance classrooms.
This series inspects the major topics in finance, reviewing the roles of stockholder wealth maximization, the risk-return tradeoff, and agency conflicts. The current article, devoted to dividend policy, also reviews the topic as presented in textbooks and the literature.
In this series, three key axioms—stockholder wealth maximization, the risk-return tradeoff, and agency conflicts—are applied to the major topics in financial management. The current article looks at mergers and acquisitions, reviewing the presumed motivations, the ethical challenges, and the literature dedicated to this financial activity.
Though linked, the relationship between legalized abortion and contraception use remains largely unexplored. This study seeks to fill this gap by examining young women’s contraceptive decisions and the additional costs, direct and indirect, imposed by restrictive abortion legislation and provider availability. Utilizing variation across U.S. state abortion restrictions on minors and different levels of provider availability we measure whether women under the age of 25 really are less careful in using contraception if abortions are less costly, in terms of both financial and opportunity cost. The effects of abortion restrictions for minors are largest and the most significant for women aged 18 and younger and the effect of these restrictions decrease in magnitude and significance gradually as women age. As expected, parental involvement increases the likelihood of young women using oral contraception. In the context of provider availability, we find results in the expected direction. As the percent of women in the state without a provider increases women are more likely to use the pill and when the provider to woman ratio increases costs of aborting are lower there is a negative effect on pill use. These results indicate that young women are forward thinking when making their contraceptive decisions, relative to the direct and indirect restrictions on abortion access. If individuals are forward thinking enough such that legislation and policy governing the consequences for today's actions can affect today's decisions, then there are important policy implications for increasing health outcomes.
We model the diffusion of economic knowledge using an epidemiological model of susceptible, exposed, infected, and recovered populations (SEIR). Treating bibliographic citations as evidence of contagion, we estimate the coefficients of a four-equation system simultaneously for each of 759 subfields of economics. Results show that some subfields grow endogenously much faster than others, and just over half have basic reproduction properties sufficient to ensure survival without the annual addition of new protégé scholars.