Economics Insights @ CBS

We acknowledge that the behavior of the OSHA and EPA is complex and cannot be explained by simple capture theories, we nonetheless find ample evidence of OSHA and EPA actions that unnecessarily exacerbate or even artificially create indirect effects for political purposes (what we call enforcement asymmetries). Furthermore, despite mounting evidence of the inefficiency of OSHA and EPA, Congress has continued to be uninterested in adequate monitoring of regulatory effect, much less in regulatory reform.

This paper studies the relation between Value Line's successful record in predicting relative stock price movements and the firm size effect. The data suggest little direct relation between the two phenomena. Value Line tends not to rank small firm stocks, and small firm stocks that are ranked are more likely to receive a low rank than large firm stocks. Within each size-sorted quintile of the market, the mean payoffs on costless positions constructed according to Value Line's recommendations are positive.

The authors propose a likelihood-ratio test of the hypothesis that the minimum-variance frontier of a set of K assets coincides with the frontier of this set and another set of N assets. They study the relation between this hypothesis, exact arbitrage pricing, and mutual fund separation. The exact distribution of the test statistic is available. The authors test the hypothesis that the frontier spanned by three size-sorted stock portfolios is the same as the frontier spanned by thirty-three size-sorted stock portfolios.