Economics Insights @ CBS

We revisit the firm value and pricing implications of the negative screening of sin stocks. Unlike prior work, we find that institutional ownership and valuations related to sin stocks are not different from those of other stocks after controlling for differences in fundamentals between sin and non-sin stocks. Sin stocks do not differ in the likelihood of exiting the public market, the cost of raising new equity, and in the announcement returns around negative ESG news relative to non-sin stocks, casting further doubt on whether negative screening hurts sin stocks.

Emergency Departments (EDs) typically have multiple areas where patients of different acuity levels receive treatments. In practice, different areas often operate with fixed nurse staffing levels. When there are substantial imbalances in congestion among different areas, it could be beneficial to deviate from the original assignment and reassign nurses. However, reassignments typically are only feasible at the beginning of 8-12-hour shifts, providing partial flexibility in adjusting staffing levels.

Recently, defaults have become celebrated as a low-cost and easy-to-implement nudge for promoting positive outcomes, both at an individual and societal level. In the present research, we conducted a large-scale field experiment (N = 32,508) in an educational context to test the effectiveness of a default intervention in promoting participation in a potentially beneficial achievement test. We found that a default manipulation increased the rate at which high school students registered to take the test but failed to produce a significant change in students’ actual rate of test-taking.

This paper recasts the consumption asset pricing model in terms of observable accounting outcomes by recognizing accounting principles that connect those outcomes to consumption and the risk to consumption. The model prompts the construction of a pricing factor from observed accounting information. The factor performs well relative to extant factors in explaining cross-sectional returns. Further, it delivers out-of-sample expected returns that forecast the actual returns and the forward betas that investors actually experience.