This paper tests a new hypothesis that bank managers issue public debt, at least in part, to convey positive, private information and refrain from issuance to hide negative, private information. This “positive selection” hypothesis is tested against the traditional “adverse selection” hypothesis. We find evidence for “positive selection,” using ratings migrations, equity returns, bond issuance, and balance sheet data for US bank holding companies. The results add to our understanding of “market discipline” in monitoring bank holding companies and also inform upon how proposed regulatory requirements that banking organizations frequently issue public debt might augment “market discipline.”

This paper formulates and estimates a dynamic programming model of optimal educational financing decisions. The main purpose of the paper is to measure the effect of short-term parental cash transfers, received during school, on educational borrowing and in-school work decisions, and on post-graduation lifetime earnings. The estimated parameters of the model imply that parental cash transfers do not significantly influence post-graduation lifetime earnings. Long-term factors such as family background and prior human capital investments are more important. Parental cash transfers do, however, significantly determine the decision to borrow or work during school and the level of lifetime consumption. Copyright 2004, Wiley-Blackwell. (This abstract was borrowed from another version of this item.)

In early 1991, the Dutch pig-industry was struck by the so-called mystery swine disease. Large-scale laboratory investigations were undertaken to search for the etiological agent. We focused on isolating viruses and mycoplasmas, and we tested paired sera of affected sows for antibodies against ten known pig viruses. The mycoplasmas M. hyosynoviae, M. hyopneumoniae, and Acholeplasma laidlawii, and the viruses encephalomyocarditis virus and porcine enterovirus types 2 and 7 were isolated from individual pigs. An unknown agent, however, was isolated from 16 of 20 piglets and from 41 of 63 sows. This agent was characterised as a virus and designated Lelystad virus. No relationship between this virus and other viruses has yet been established. Of 165 sows reportedly afflicted by the disease, 123 (75 per cent) seroconverted to Lelystad virus, whereas less than 10 per cent seroconverted to any of the other virus isolates or to the known viral pathogens. Antibodies directed against Lelystad virus were also found in pigs with mystery swine disease in England, Germany, and in the United States. We conclude that infection with Lelystad virus is the likely cause of mystery swine disease.

Are there agglomeration economies in crime? The positive correlation between city size and crime rates is well-known. This paper establishes a positive relationship between youth cohort size and marijuana use rates. It further demonstrates a negative association between youth cohort size and marijuana prices, youth drug possession arrest rates, and both overall and youth sales arrest rates. Cohort size affects demand by lowering possession arrest probabilities, but this factor explains less than 10 percent of the relationship. The main effect shown here, accounting for at least a quarter of the relationship, is on the supply of marijuana. Larger youth cohorts yield thicker drug markets that, through lower sales arrest risk and informational economies, generate cost-savings in drug distribution.