Short sellers face unique risks, such as the risk that stock loans become expensive and the risk that stock loans are recalled. We show that short‐selling risk affects prices among the cross‐section of stocks. Stocks with more short‐selling risk have lower returns, less price efficiency, and less short selling.

Initial yields on both AAA‐rated and non‐AAA rated mortgage‐backed security (MBS) tranches sold by large issuers are higher than yields on similar tranches sold by small issuers during the market boom years of 2004 to 2006. Moreover, the prices of MBS sold by large issuers drop more than those sold by small issuers, and the differences are concentrated among tranches issued during 2004 to 2006. These results suggest that investors price the risk that large issuers received more inflated ratings than small issuers, especially during boom periods.

The standard analysis of corporate governance assumes that shareholders vote in ratios that firms choose, such as one share‐one vote. However, if the cost of unbundling and trading votes is sufficiently low, then shareholders choose the ratios. We document an active market for votes within the U.S. equity loan market, where the average vote sells for zero. We hypothesize that asymmetric information motivates the vote trade and find support in the cross section. More trading occurs for higher‐spread and worse‐performing firms, especially when voting is close. Vote trading corresponds to support for shareholder proposals and opposition to management proposals.

We examine the effects of a quasi-experimental unconditional household income transfer on child emotional and behavioral health and personality traits. Using longitudinal data, we find that there are large beneficial effects on children's emotional and behavioral health and personality traits during adolescence. We find evidence that these effects are most pronounced for children who start out with the lowest initial endowments. The income intervention also results in improvements in parental relationships which we interpret as a potential mechanism behind our findings.

Financial investment behavior is highly correlated between parents and their children. Using Swedish data, we find that the decision of adoptees to hold equities is associated with the behavior of both biological and adoptive parents, implying a role for both genetic and environmental influences. However, we find that nurture has a stronger influence on the share of financial assets invested in equities and on portfolio volatility, suggesting that financial risk‐taking is substantially environmentally determined. The parental investment variables substantially increase the explanatory power of cross‐sectional regressions and so may play an important role in understanding cross‐sectional heterogeneity in investment behavior.

After the publication of “School Choice: A Mechanism Design Approach” by Abdulkadiroglu and Sonmez (2003), a Boston Globe reporter contacted us about the Boston Public Schools (BPS) system for assigning students to schools. The Globe article highlighted the difficulties that Boston’s system may give parents in strategizing about applying to schools. Briefly, Boston tries to give students their firstchoice school. But a student who fails to get her first choice may find her later choices filled by students who chose them first. So there is a risk in ranking a school first if there is a chance of not being admitted; other schools that would have been possible had they been listed first may also be filled. Valerie Edwards, then Strategic Planning Manager at BPS, and her colleague Carleton Jones invited us to a meeting in October 2003. BPS agreed to a study of their assignment system and provided us with micro-level data sets on choices and characteristics of students in the grades at which school choices are made (K, 1, 6, and 9), and school characteristics. Based on the pending results of this study, the Superintendent has asked for our advice on the design of a new assignment mechanism. This paper describes some of the difficulties with the current mechanism and some elements of the design and evaluation of possible replacement mechanisms. School choice in Boston has been partly shaped by desegregation. In 1974, Judge W. Arthur Garrity ordered busing for racial balance. In 1987, the U.S. Court of Appeals freed BPS to adopt a new, choice-based assignment plan. In 1999 BPS eliminated racial preferences in assignment and adopted the current mechanism.

Returns to Education: Evidence from U.K. Twins by Dorothe Bonjour, Lynn F. Cherkas, Jonathan E. Haskel, Denise D. Hawkes and Tim D. Spector. Published in volume 93, issue 5, pages 1799-1812 of American Economic Review, December 2003

The thesis of this symposium, organized by James Bicksler, was that while finance theory will surely inform practitioners, it seems appropriate to pay some attention to the opposite flow: practitioners can inform theory. Contributors include a distinguished group of practitioners with extensive backgrounds in economics, and economists with extensive public policy experience: Martin Feldstein, Robert Glauber, David Mullins, and Steven Wallman. Their topics range from privatizing social security, to managing market crashes, to the regulatory agency cost problem, to regulatory constraints in a technologically advanced world.

The thesis of this symposium, organized by James Bicksler, was that while finance theory will surely inform practitioners, it seems appropriate to pay some attention to the opposite flow: practitioners can inform theory. Contributors include a distinguished group of practitioners with extensive backgrounds in economics, and economists with extensive public policy experience: Martin Feldstein, Robert Glauber, David Mullins, and Steven Wallman. Their topics range from privatizing social security, to managing market crashes, to the regulatory agency cost problem, to regulatory constraints in a technologically advanced world.