We examine how the criteria for choosing estimation samples (peer firms) affect the ability to detect discretionary accruals, using several variants of the Jones (1991) model. Researchers commonly estimate accruals models in cross-section, and define the estimation sample as all firms in the same industry. We examine whether firm size performs at least as well as industry membership as the crit...

A decade ago in a paper, “Reassessing Discretionary Fiscal Policy,” published in the Journal of Economic Perspectives, I concluded that “in the current context of the US economy, it seems best to let fiscal policy have its main countercyclical impact through the automatic stabilizers ... It would be appropriate in the current circumstances for discretionary fiscal policy to be saved explicitly ...

This paper looks at whether sticky-price New Keynesian models with microfounded inertia can usefully describe US data. We estimate a range of models, considering specifications with either internal or external consumption habits, specifications containing Taylor-type rules or an optimal discretionary rule, and specifications where inflation is driven by movements in either the gap or real margi...

BACKGROUND Accountable care organizations (ACOs) seek to reduce growth in healthcare spending while ensuring high-quality care. We hypothesized that accountable care organization implementation would selectively limit the use of discretionary cardiovascular care (defined as care occurring in the absence of indications such as myocardial infarction or stroke), while maintaining high-quality care...

We consider a model of strategic information transmission in which a firm can communicate its quality to consumers through informative advertising. Our main result is that informative advertising claims can be credible even when the firm faces consumers with ex ante homogeneous preferences. A fundamental assumption of our model is that whether the product is available for purchase is independen...

The study is an effort to fiind out the impact of earnings management on dividend payout policy for two coutries that is Pakistan and China. A set of listed Companies in both of the countries have been investigated to analyze the relationship for the year 2003 to 2007 in Pakistan and 2001 to 2007 in China. Dividend policy has been measured by dividend payout. Whereas earnings management has bee...

This study examines the role of pre-IPO discretionary accruals in the valuation and underpricing of IPOs. We find that IPO offer price is unaffected whereas market closing price is positively associated with the levels of pre-IPO discretionary accruals for issuers with aggressively reported earnings. We also find that this relative over-valuation of managed earnings by the markets explains a po...

Using a sample of banks, this study examines the capital market pricing implications of three components of loan fair values. We find that the nondiscretionary component is priced on a dollar-for-dollar basis, the discretionary component is assigned a significantly larger multiple than the nondiscretionary component and the noise component is not priced. This implies that the relevance and reli...

The reduction in transportation costs when travelling with a low-cost airline (LCA) seems to have modified the composition of the trip budget. An understanding of expenditure composition when comparing LCA and legacy airline travellers is vital for destination marketers. Using micro official statistics data for air travellers to Spain in 2010 and the compositional data analysis (CODA) methodolo...