EXPRESS: Early Cost Realization and College Choice

2021 ◽  
pp. 002224372110263
Author(s):  
Haewon Yoon ◽  
Yang Yang ◽  
Carey K. Morewedge

We propose a formal tuition myopia model of the decision-making process by which students evaluate the financial costs and returns of college. In simulations, surveys, and experiments, we find that even when student loans defer payment of attendance costs until after graduation—the same moment when students can begin earning a salary that reflects their degree—students psychologically realize the financial costs of college much earlier. This early cost realization frames a majority of choices between any pair of colleges as an intertemporal tradeoff between a smaller short-term investment with smaller long-term returns (a low cost-low return college; LC-LR) and a larger short-term investment with larger long-term returns (a high cost-high return college; HC-HR). While a rational model based on projected future cash flows most often favors the HC-HR college, our model predicts a preference for the LC-LR college among students who are financially impatient and in choice pairs where the equilibrium between LC-LR and HC-HR options is at a low discount rate threshold. Our model of a life-altering financial decision that affects millions of students each year offers valuable insights for universities, policymakers, and non-profit organizations advocating for students to treat higher education as an investment decision.

Kybernetes ◽  
2019 ◽  
Vol 48 (8) ◽  
pp. 1894-1912
Author(s):  
Samra Chaudary

Purpose The paper takes a behavioral approach by making use of the prospect theory to unveil the impact of salience on short-term and long-term investment decisions. This paper aims to investigate the group differences for two types of investors’ groups, i.e. individual investors and professional investors. Design/methodology/approach The study uses partial least square-based structural equation modeling technique, measurement invariance test and multigroup analysis test on a unique data set of 277 active equity traders which included professional money managers and individual investors. Findings Results showed that salience has a significant positive impact on both short-term and long-term investment decisions. The impact was almost 1.5 times higher for long-term investment decision as compared to short-term decision. Furthermore, multigroup analysis revealed that the two groups (individual investors and professional investors) were statistically significantly different from each other. Research limitations/implications The study has implications for financial regulators, money managers and individual investors as it was found that individual investors suffer more with salience heuristic and may end up with sub-optimal portfolios due to inefficient diversification. Thus, investors should be cautious in fully relying on salience and avoid such bias to improve investment returns. Practical implications The study concludes with a discussion of policy and regulatory implications on how to minimize salience bias to achieve optimum and diversified portfolios. Originality/value The study has significantly contributed to the growing body of applied behavioral research in the discipline of finance.


2021 ◽  
Vol 58 (2) ◽  
pp. 1706-1717
Author(s):  
Krisada Sungkhamanee, Piyadhida Sungkhamanee

Investment decisions have great importance in different sectors of various countries and these decisions are the basis on which the outcomes of the investments are based. However, there might be certain factors that might lead to the incorrect long term and short term investment decisions. In this regard, the current study has been conducted with the core motive to explore the impact casted by the environment and potential factors i.e. salience and overconfidence on the long term investment decisions for accommodation business along with the moderation of a variable i.e. financial literacy. To fulfill this objective, the researcher has collected data from the investors of accommodation businesses in Thailand. The collected data has been subjected to different statistical techniques and tools for analysis purpose and the results have been obtained. The results obtained by the analysis of the collected data indicate that salience and overconfidence have significant impact on the long term investment decision. In addition, the moderating role of financial literacy has also been found as significant in the study. The results suggest that the investors of the accommodation business must consider the aspects of salience and overconfidence before taking any long term investment decision to avoid failure of the investment decision.    


2015 ◽  
Vol 54 (2) ◽  
pp. 79-96 ◽  
Author(s):  
Abdullah Muhammad Iqbal ◽  
Iram Khan ◽  
Zeeshan Ahmed

This study examines the incidence of earnings management around the time of the privatisation of State Owned Enterprises in Pakistan during 1991-2005. Using the modified Jones model and a sample of large privatisations (minimum US$1 million), it shows that the sampled firms experienced increase in earnings, decrease in cash flows, and increase in current discretionary accruals in the year prior to and/or in the year of privatisation. The SOEs used both short term and long term accruals to inflate reported earnings. These accruals were reversed in the post-privatisation period. These findings suggest that managers of the firms slated for privatisation were engaged in earnings management to inflate their firms‘ financial worth to maximise the privatisation proceeds. Hence, we cannot reject the incidence of earnings management during privatisations in Pakistan. The results imply that the investors should carefully evaluate the to-be-privatised firms and keep in view the possibility of earnings management by the SOEs. JEL Classification: G14, G34, G38, L33, M41 Keywords: Earnings Management, Privatisations, SOEs, Pakistan, Accruals


2016 ◽  
Vol 2 (1) ◽  
pp. 54
Author(s):  
Dian Yudo Palupi ◽  
Farida Ratna Dewi ◽  
R. Dikky Indrawan

Economic growth and public welfare are the reason of regional autonomy regulation policy (UU No 22 year 1999). The policy allows regional economic resources managed by regional government to achieve its goal. One of the regional government strategies is investment strategy, which in this case investing in banking industry. The purposes of the study are 1) to identify the investment regulation on regional government 2) to identify the Bank BJB business and investment environment 3) to identify the comparison of investment feasibility on Bank BJB versus other banks 4) to identify the position of Stock Share A series owned by XYZ at Bank BJB. The data collection methods are using structured interview, in depth interview, field survey and literature study. The analysis tools are using institutional analysis, SWOT analysis and financial analysis. Institutional analysis showed XYZ regional government investment management is limited to regulation as follow 1) long term capital (stock share) investment limited only at BUMD (e.g. Bank BJB) 2) short term investment e.g. saving and deposit is limited only at healthy and feasible bank, and government bond which has small risk exposure. The financial analysis also showed the increasing performance of BJB Earning per Share (EPS) and Return on Equity (ROE) from 2006 until 2010. The SWOT analysis support other analysis that BJB Bank position in financial industry is suitable for long term and short term investment for XYZ regional government. Base on explanation above, the conclusions are the autonomy regulation limited XYZ regional government to invest as shareholders in A series (stock share) or B series (stock share) at BJB Bank only, and for short term investment is limited only at healthy and feasible bank, and government bond which has small risk exposure.


2008 ◽  
Vol 2 (1-2) ◽  
pp. 103-105
Author(s):  
Lari Hadelan

The major prerequisite of successful entrepreneurship venture is quality of decision-making process. Decision in investment is the most important financial decision. It is a part of both long-term business planning process and strategic business definition. Using available investment appraisal methods, entrepreneur should make positive or negative investment decision. Within the development of the economic theory and the practice many of methods made decision-making process rational and gave the scientific and practical base for successful project evaluation.


2018 ◽  
Vol 31 (3) ◽  
pp. 129-151 ◽  
Author(s):  
Carolyn B. Levine ◽  
Michael J. Smith

ABSTRACT This study addresses the effect of clawbacks on earnings management (EM). In a two-period model, the manager can report truthfully or distort an interim report using either accrual or real EM. The principal can make short-term payments based on a manipulable accounting signal and long-term payments based on unmanipulable cash flows. The strength of the clawbacks determines the likelihood that the manager's compensation is reclaimed when the interim report was managed. Stronger clawback provisions may result in (1) a substitution between accrual and real earnings management, or (2) earnings management when no earnings management was optimal with weak clawbacks, and (3) lower expected profits for the principal. Numerical analysis suggests that strong clawbacks do not reduce aggregate earnings management. JEL Classifications: J33; M48; M52; G38. Data Availability: All data are simulated.


2020 ◽  
Vol 15 (1) ◽  
pp. 1-2 ◽  
Author(s):  
Michele Perniola ◽  
Pier Paolo Roggero ◽  
Michael D. Casler ◽  
Davide Cammarano ◽  
Michele Rinaldi

The Italian Society of Agronomy (SIA) has changed the Editor in Chief and the Editorial board of the Italian Journal of Agronomy (IJA). The new Editorial board is being integrated with new expertise and includes three Associate editors: Michael D. Casler from USDA-ARS, USA, Davide Cammarano from Purdue University, USA and Michele Rinaldi from Council for Agricultural Research and Economics, Italy, the former co-editor. The Editorial board is redeveloping the Journal with a more pro-active publishing policy, that is consistent to the changing editorial demand of agronomy scientists worldwide. The international scientific publishing industry is facing a sharp transition, pulled by the increasing demand of rapid publication in the publish-or-perish or highly-cited paradigm and pushed towards full open access publishing by research funders and end-users. Minimizing the time between manuscript submission and paper publication is threatening the quality of the peer-review process, which is constrained by time pressure on highly qualified scientists, who end up being overloaded with reviews and editorial duties. The open access scientific journal industry is struggling between increasing the impact factor/cite score of the journals and maximizing the number of published articles, which is directly proportional to the publisher’s business. This is generating an increasing number of open access scientific publications worldwide: +75% between 2008-10 and 2015-17 in the ‘Agronomy and crop science’ subject category (Source: Scopus) while the non-open access publications in the same domain and time span increased by only +27%. This situation and the evolution of long term open-theme research funding schemes into short-term projectified finalized research funding programs are deeply influencing the topics of research in Agronomy. Long term agronomic facilities and field scale research are becoming rare and are often being replaced by short-term easily-published studies. However, international scientific exchanges are facilitating the development of permanent regional and global networks of researchers (e.g. AgMip, Global Research Alliance) that are developing unprecedented long-term research efforts on global issues around agronomy, involving hundreds of post-docs and young researchers worldwide. In this developing context, the Italian Journal of Agronomy, own by the Italian Society of Agronomy, a non-profit scientific organization, is developing a new editorial policy to contribute to the progress of agronomic science through an open-access, low-cost and authoritative scientific literature space, with particular attention to young scientists. There are number of reasons why an agronomy scientist should publish an article in the Italian Journal of Agronomy, including: i) to get a rapid and careful peer review assessment of the submissions by an authoritative editorial board with specific expertise in Agronomy and receive careful support on how to address major revisions when required; ii) to ensure maximum visibility for published articles through the open access system; iii) to contribute to the agronomic scientific literature through an open access Scopus/WOS scientific Journal owned by a non-profit scientific society at a fair price; iv) to compete for the SIA grants and prizes for best articles or best reviewers of the year. The new editorial policy of IJA includes a more pro-active publishing strategy aiming at widening the arena of international scientists contributing to the journal’s scope, including invited papers and special conditions for the publication of special issues on cutting-edge agronomy topics, promotion of the journal during scientific conferences and events, rewarding of the best articles and peer-reviewers contributing to the journal’s development. IJA is solely focused on the free diffusion of agroecosystem science, not on any other business: we trust that authors and readers will appreciate that IJA’s editorial board members work toward this mission without compensation and that the article fee is necessary only to cover the publisher’s net costs. We are very grateful to the past and new Editorial board and all peer reviewers for their invaluable contribution to the development of our Journal. Michele Perniola, President of the Italian Society of Agronomy Pier Paolo Roggero, Editor in ChiefMichael D. Casler, Associate EditorDavide Cammarano, Associate EditorMichele Rinaldi, Associate Editor


2019 ◽  
Vol 38 (12-13) ◽  
pp. 1442-1462 ◽  
Author(s):  
Zakary Littlefield ◽  
David Surovik ◽  
Massimo Vespignani ◽  
Jonathan Bruce ◽  
Weifu Wang ◽  
...  

Tensegrity-based robots can achieve locomotion through shape deformation and compliance. They are highly adaptable to their surroundings, and are lightweight, low cost, and physically robust. Their high dimensionality and strongly dynamic nature, however, can complicate motion planning. Efforts to date have primarily considered quasi-static reconfiguration and short-term dynamic motion of tensegrity robots, which do not fully exploit the underlying system dynamics in the long term. Longer-horizon planning has previously required costly search over the full space of valid control inputs. This work synthesizes new and existing approaches to produce dynamic long-term motion while balancing the computational demand. A numerical process based upon quasi-static assumptions is first applied to deform the system into an unstable configuration, causing forward motion. The dynamical characteristics of the result are then altered via a few simple parameters to produce a small but diverse set of useful behaviors. The proposed approach takes advantage of identified symmetries on the prototypical spherical tensegrity robot, which reduce the number of needed gaits but allow motion along different directions. These gaits are first combined with a standard search method to achieve long-term planning in environments where the developed gaits are effective. For more complex environments, the various motion primitives are paired with the fall-back option of random valid actions and are used by an informed sampling-based kinodynamic motion planner with anytime properties. Evaluations using a physics-based model for the prototypical robot demonstrate that modest but efficiently applied search effort can unlock the utility of dynamic tensegrity motion to produce high-quality solutions.


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