Increasing attention has been focused, as of late, on the relatively low rate of rental housing starts and the increase in apartment conversions to condominium ownership. By some estimates, additions to owner–occupied housing stock since 1970 have occurred at twice the rate of addition to the rental stock, a pattern that has caused concern to some policymakers.

Erratum

Advocacy groups have responded to the lack of political solutions to some of the greatest problems we face—from climate change to armed conflicts—by lobbying for securities regulation that increases corporate transparency. They aim to incentivize corporations to address problems that lack other political solutions. I discuss what we can (and cannot) learn about the efficacy of reporting mandates from the findings in Darendeli et al. (2022) and related papers that stakeholders respond to greater availability of corporate social responsibility information. I support my arguments with evidence from mandatory conflict mineral disclosures—to date, the only related US securities regulation. Although stakeholder responses are likely necessary to incentivize changes in corporate behavior, they are insufficient to justify a mandate. A convincing justification must explain how reporting mandates lead to socially beneficial real effects, are best overseen by the Securities and Exchange Commission, and are less costly than alternative policy instruments. So far, proponents of reporting mandates have, at best, provided incomplete justifications. These circumstances are problematic given the current push for mandatory reporting related to issues such as climate change and workplace diversity.

This study examines whether and how the properties of corporate bond ratings change following Moody׳s and S&P׳s adoptions of the issuer-pay business model in the early 1970s. Regulators and debt market observers have criticized the issuer-pay model for creating an independence problem. However, the issuer-pay model allows for economic bonding between rating agencies and issuers through explicit contractual arrangements, which should improve the flow of nonpublic information. Using a difference-in-difference research design, I find that more optimistic ratings by issuer-pay rating agencies predict greater future profitability, differences between the ratings of issuer-pay and investor-pay rating agencies are associated with narrower secondary bond market bid-ask spreads, and that issuer-pay rating agencies become relatively more accurate and timely predictors of default compared to investor-pay agencies after the adoption of issuer-pay. These results reinterpret the recent findings of optimistic ratings by Jiang et al. (2012) as consistent with more informative bond ratings.

This study investigates whether abnormal returns can be earned using public information about firms’ domestic and foreign earnings. The results indicate that the market understates foreign earnings’ persistence. As a result, it is possible to construct a zero-investment hedge portfolio that consistently earns positive returns across years. A disproportionate fraction of the positive abnormal returns to the long position is concentrated in the few days surrounding the subsequent year's quarterly earnings announcement dates. Furthermore, the abnormal returns do not appear to persist beyond the subsequent year. The results are consistent with market mispricing, and not mis-estimated risk.

Weekly returns of stock portfolios exhibit substantial autocorrelation. Analytical studies suggest that nonsynchronous trading is capable of explaining from 5% to 65% of the autocorrelation. The varying importance of nonsynchronous trading in these studies arises primarily from differing assumptions regarding nontrading periods of stocks. We simulate the effects of nonsynchronous trading by sampling stock returns from a return generating process using transactions data to obtain the precise time of each stock's last trade. We find that simulated weekly portfolio returns exhibit autocorrelations that are roughly 25% that of their observed (CRSP) weekly returns.

Journal Article A Critique of Size-Related Anomalies Get access Jonathan B. Berk Jonathan B. Berk University of British Columbia Address correspondence to Jonathan B. Berk, Faculty of Commerce, University of British Columbia, 2053 Main Mail, Vancouver, BC V6T 1Z2. Search for other works by this author on: Oxford Academic Google Scholar The Review of Financial Studies, Volume 8, Issue 2, April 1995, Pages 275–286, https://doi.org/10.1093/rfs/8.2.275 Published: 28 May 2015

[This article argues that the size-related regularities in asset prices should not be regarded as anomalies. Indeed, the opposite result is demonstrated. Namely, a truly anomalous regularity would be if an inverse relation between size and return was not observed. We show theoretically (1) that the size-related regularities should be observed in the economy and (2) why size will in general explain the part of the cross-section of expected returns left unexplained by an incorrectly specified asset pricing model. In light of these results we argue that size-related measures should be used in cross-sectional tests to detect model misspecifications.]

[A testable single-beta model of asset prices is presented. If state variables have a long-run stationary joint density function, then the rate return on a very long-term default-free discount bond will be perfectly correlated with the representative investor's marginal utility of consumption. Thus, the covariance of an asset's return with the return on such a bond will be an appropriate measure of the asset's riskiness. The model can be, therefore, applied or tested even though the market portfolio or aggregate consumption may not be observable. It also is shown that the expected rate of return on a very long-term bond is equal to its variance. This proposition can be tested to determine whether state variables follow stationary processes.]

Major long-run swings in the U. S. stock market over the past century are broadly consistent with a model driven by changes in current and expected future dividends in which investors must estimate the time-varying long-run dividend growth rate. Such an estimated long-run growth rate resembles a long distributed lag on past dividend growth, and is highly correlated with the level of dividends. Prices therefore respond more than proportionately to long-run movements in dividends. The time-varying component of dividend growth need not be detectable in the dividend data for it to have large effects on stock prices.