Showing papers on "Proxy (statistics) published in 1995"

Why do Banks Disappear? The Determinants of U.S. Bank Failures and Acquisitions

Abstract: This paper seeks to identify the characteristics that make individual U.S. banks more likely to fail or be acquired. We use bank-specific information to estimate competing-risks hazard models with time-varying covariates. We use alternative measures of productive efficiency to proxy management quality, and find that inefficiency increases the risk of failure while reducing the probability of a bank's being acquired. Finally, we show that the closer to insolvency a bank is (as reflected by a low equity-to-assets ratio) the more likely is its acquisition.

The Effects of Cross-Sectional Scale Differences on Regression Results in Empirical Accounting Research

Abstract: This study investigates coefficient bias and heteroscedasticity resulting from scale differences in accounting levels-based research designs analytically and using simulations based on accounting data. Findings indicate that including a scale proxy as an independent variable is more effective than deflation at mitigating coefficient bias, even if the proxy is 95 percent correlated with the true scale factor. In fact, deflation can worsen coefficient bias. Also, deflation often does not noticeably reduce heteroscedasticity and can decrease estimation efficiency. White (1980) standard errors are close to the true ones in regressions using undeflated variables. Replications of specifications in three recent accounting studies confirm the simulation findings. The findings suggest that when scale differences are of concern, accounting researchers should include a scale proxy as an independent variable and report inferences based on White standard errors.

On the Validity of Using Census Geocode Characteristics to Proxy Individual Socioeconomic Characteristics

Abstract: Investigators of social differentials in health outcomes commonly augment incomplete micro data by appending socioeconomic characteristics of residential areas (such as median income in a zip code) to proxy for individual characteristics. However, little empirical attention has been paid to how well this aggregate information serves as a proxy for the individual characteristics of interest. We build on recent work addressing the biases inherent in proxies and consider two health-related examples within a statistical framework that illuminate the nature and sources of biases. Data from the Panel Study of Income Dynamics and the National Maternal and Infant Health Survey are linked to census data. We assess the validity of using the aggregate census information as a proxy for individual information when estimating main effects, and when controlling for potential confounding between socioeconomic and sociodemographic factors in measures of general health status and infant mortality. We find a general, but not universal, tendency for aggregate proxies to exaggerate the effects of micro-level variables and to do more poorly than micro-level variables at controlling for confounding. The magnitude and direction of these biases, however, vary across samples. Our statistical framework and empirical findings suggest the difficulties in and limits to interpreting proxies derived from aggregate census data as if they were micro-level variables. The statistical framework we outline for our study of health outcomes should be generally applicable to other situations where researchers have merged aggregate data with micro data samples.

Agreement between self reports and proxy reports of quality of life in epilepsy patients.

Abstract: Agreement between self reports and proxy reports of quality of life was examined in a sample of 292 patients with epilepsy and their designated proxies. Patients and proxies completed an 89-item Quality of Life Inventory (QOLIE-89), with the items rephrased for the proxy. Results reveal moderate correlations (product-momentr ranging from 0.29 to 0.56 for 17 multi-item scales) between self reports and proxy reports. Agreement was good for measures of function that are directly observable and relatively poor for more subjective measures. Mean scale scores were significantly different between patients and proxies for only five of 17 multi-item scales. Proxy respondents systematically reported better functioning than did patients in three scales assessing cognitive functioning (allp<0.001). By contrast, patients reported more positive health perceptions and less seizure distress than proxies. Patient educational attainment correlated inversely with degree of disagreement between patient and proxy reports for six of the 17 QOL scales and for the overall score. In addition, proxy educational attainment correlated positively with agreement for four scales. This study indicates that for group level comparisons, proxy respondents can be substituted for adults with epilepsy having low to moderate seizure frequency. However, for individual level assessments proxies should be used with caution.

Proxy Means Tests for Targeting Social Programs: Simulations and Speculation

Abstract: . ix Acknowledgments xi I. The Need for a Proxy Means Test 1 Means Tests . 1 Proxy Means Tests 3 II. Exploring the Algorithm through Simulation Experiments 5 Data and Country Descriptions 5 Methodology . 6 Which Variables Are Good Proxies for Income? 9 How Sensitive Are the Results to the Poverty Line? 16 Are the Outcomes Different for Rural and Urban Populations? 17 Do the Outcomes Improve Using Only the Poorest 50 Percent of the Population? 18 Do the Results Vary across Countries? 20 What Effect Does Distortion Have on Outcomes? 21 Summary and Conclusions 22 III. Chile's Program Experience with Proxy Means Tests 23 Basic Description 23 Technical Issues 24 Cost and Administrative Requirements 24 Program Experience with CAS 25 IV. Design Issues in Using Proxy Means Tests 27 Contrasting Scenarios 27 Factors to Consider 27 Annex I. Algorithms Compared 35 Annex II. Full Regression Results 41 References . 47

The role of human capital in economic growth: New results and alternative interpretations

Abstract: Recent empirical research on the empirics of growth has demonstrated that an augmented Solow model provides a fairly good description of cross-country data on output per worker. Re-estimating this model by using a proxy for the stock of human capital rather than a flow measure, I find a substantially higher share of human capital in income than MRW. Given the data at hand, this result does not seem to suffer from a simultaneous equation bias, and the MRW result does not seem to suffer from measurement error. Therefore, a modified augmented Solow model is suggested that can reconcile the competing empirical estimates. For an income share of physical capital of about 1/3, the implication of this new growth model is that the impact of human capital formation on output per worker is twice as high as the positive impact of physical capital formation and the negative impact of population growth. The MRW model is less optimistic in this respect: The impact of human and physical capital accumulation is predicted to be the same, and only half as large as the negative impact of population growth.

Intraschool Variation in Class Size: Patterns and Implications

Abstract: Economists attempting to explain the widening of the black-white wage gap in the late 1970's by differences in school quality have been faced the problem that recent data reveal virtually no gap in the quality of schools attended by blacks and whites using a variety of measures. In this paper, we re- examine racial differences in school quality. We begin by considering the effects of using the pupil- teacher ratio, rather than the school's average class size, in an education production function since the pupil-teacher ratio is a rough proxy, at best. Second, we consider the importance of using actual class size rather than school-level measures of class size. We find that while the pupil-teacher ratio and average class size are correlated, the pupil-teacher ratio is systematically less than or equal to the average class size. Mathematically, part of the difference is due to the intraschool allocation of teachers to classes. As a result, while the pupil-teacher ratio suggests no black-white differences in class size, measures of the school's average class size suggest that blacks are in larger classes. Further, the two measures result in differing estimates of the importance of class size in an education production function. We also conclude that school level measures may obscure important within-school variation in class size due to the small class sizes for compensatory education. Since black students are more likely to be assigned to compensatory education classes, a kind of aggregation bias results. We find that not only are blacks in schools with larger average class sizes, but they are also in larger classes within schools, conditional on class type. The intraschool class size patterns suggest that using within-school variation in education production functions is not a perfect solution to aggregation problems because of non-random assignment of students to classes of differing sizes. However, once the selection problem has been addressed, it appears that smaller classes at the eighth grade lead to larger test score gains from eighth to tenth grade and that differences in class size can explain approximately 15 percent of the black-white difference in educational achievement.

Determinants of the Choice of the Hostile Takeover Mechanism: An Empirical Analysis of Tender Offers and Proxy Contests

Abstract: This paper investigates the influence of target firm performance, capital structure, and ownership profile on the decision to pursue a hostile tender offer or, alternatively, a proxy contest. Empirically, firms with poorer financial performance are more likely to experience a proxy contest as opposed to a tender offer. Firms that are more highly leveraged and that tend to be management-controlled are more likely to be targets of proxy contests than of tender offers.

The Structure of Physical Health Status Comparing Proxies and Self-Respondents

Abstract: Because gerontological studies often need to rely on the use of proxy respondents, the comparability of proxy and self-respondents is of particular interest. However, it is often impossible to eval...

An Empirical Measure of the Real Rate of Interest

Abstract: The interest rate adjusted for expected inflation, the real rate of interest, is a key variable in macroeconomics. It is the price one pays for currently available resources expressed in terms of future resources. How does the real rate of interest behave? Despite the importance of this question, there is no generally available measure of the real rate of interest one can use to answer it. Economists who have studied the real rate have had to create their own series. The purpose of this article is to construct and make available a number of alternative empirical measures of the real rate of interest. As noted above, the real rate of interest is the difference between the observed market rate of interest and the inflation rate expected by the public. Expected inflation, however, is not directly observable. 1 In order to construct a real rate series, one must select a proxy for expected inflation. We examine two possibilities—inflation forecasts made by Data Resources Incorporated (DRI) and by the staff of the Board of Governors of the Federal Reserve System. The DRI forecasts are made monthly. Through 1978, the Board staff produced monthly forecasts. Thereafter, it produced them eight times per year. These forecast series, therefore, allow construction of real rate series that are observed frequently enough to study cyclical timing relationships. As an illustration of the usefulness of having a real rate series, we first review recent public debate over the typical level of the real rate. The main part of the article provides a defense of the plausibility of the real rate series constructed here and listed in the appendix. We compare forecasts of inflation from four different sources: the staff of the Board of Governors, DRI, the Michigan Survey of Consumers, and the Livingston Survey. We argue that the

Executive stock option compensation: The corporate reporting decision

Abstract: New regulations instituted in 1992 by the SEC require that estimates of the values of executive stock option grants now be included in proxy statement reports on senior executive compensation. We examine the character of firms' reporting choices under the new rules, from a large sample of the first round of proxy statements issued. We find that the majority of firms have elected a reporting approach that provides little additional information to investors, and appear at least in part to have done so because the alternative approach would have caused them to report above-average stock option compensation amounts for their executives.

Does layoff risk explain the firm-size wage differential?

Abstract: If less stable (and also less able) workers select themselves into small, unstable and lowpaying firms, predicted layoff risk of workers can be used as a proxy for heterogeneity of workers and should therefore be included in wage regressions. Doing this, one third of the size earnings premium can be explained.

Proxy Measurement of Adult Basic Skills: Lessons from Canada.

Abstract: v

Earnings Response Coefficient and Persistence: New Evidence Using Tobin's q as a Proxy for Persistence:

Abstract: Prior studies have documented that the earnings response coefficient is positively related to persistence and growth and negatively related to beta and the risk-free rate. Although these studies pr...

Method and system for proxy authorization

Abstract: PURPOSE: To provide a method and system for proxy authorization which attain a node which is permitted by an access requesting node to access resources safely as a proxy for the access request node. CONSTITUTION: A node A has a proxy request means 720 which transfers a 1st message including added secret information to a proxy node B after confirming the validity of a proxy node B substituting for its node A, a proxy request means 810 which holds the secret information of the 1st message received by the proxy node B through a proxy request means, and a proxy execution means 820 which allows the proxy node B to perform authorization with a node N by using the secret information; and the node B sends an access request to the node N as a substitute for the node A.

On Advancing Advance Directives: Why Should We Believe the Promise?

Abstract: In a recentissue of theArchives, Reilly et al 1 undertook to determine whether a simple educational intervention, namely, the mailing of an educational brochure describing advance directives and a copy of the New York State Health Care Proxy form, would encourage outpatients in a community to execute durable health care proxies. In this editorial, the terms proxy and advance directive (AD) will be used interchangeably. Reilly et al reported no notable increase in completed proxies among those who had received the educational intervention (13.3%) and those who did not (11.4%). However, the authors indicated three important predictors of patient proxy completion-older age, previous in-hospital discussion of cardiopulmonary resuscitation (CPR) related to ADs with the physician, and execution of a proxy by the patient's personal physician. Neither severity of illness nor admission to an intensive care unit seemed to be related to the execution of a proxy. The most

Proxy object recovery in an object-oriented environment

Abstract: A mechanism is described for protecting against invalid usage of proxy objects (449) after malfunction of a server and also for transparently re-creating proxy objects in a client of a client-server distributed processing system. A proxy class is used that has additional attributes indicating the name (455) of the target object in the server, an indication as to whether the name is presently valid (459) and an alternate pointer (457) to the target object. A proxy register object (155) in the client maintains pointers to all the proxy objects (449) which point to objects in the server. On malfunction of the server, and consequent invalidity of the proxy objects (449), the proxy register object (155) causes all proxy objects (449) to be refreshed.

Controlling for mental health in earnings equations: what do we gain and what do we lose?

Abstract: This paper examines the biases in estimating wage equations that may arise from measurement errors in various mental health indicators—two subjective proxies and one clinical assessment. The results suggest that a self-reported measure based on whether the individual reported missing school or work for mental-health-related reasons leads to the smallest measurement error bias in the coefficients of the explanatory variables in an earnings equation. Two specific results lead to this conclusion. For one, the variance of the random component of its measurement error is the smallest among the three indicators leading to the least biased estimates of the impact of mental health on wages. Second, systematic reporting biases which vary with the non-health regressors in a wage equation do not appear to exit in this measure. Consequently, this indicator follows the classical measurement error model. This implies that the coefficient estimates of the impact of non-health variables are always improved, in the sense of having a smaller bias, when this mental health proxy is included in the regression. The measurement error in a self-evaluation according to the scale of excellent, good, fair, or poor has the largest variance thus leading to a substantial understatement of the impact of mental health on earnings. This measure also contains significant reporting biases that vary with gender, race, and education—many of the non-health regressors in a wage equation. The measurement error variance in the simulated diagnostic measure analyzed in this paper is also large. Thus this proxy will yield poor estimates of the impact of mental health on earnings.

The Accuracy of CAPM Proxies for Estimating a Firm's Cost of Equity

Abstract: In estimating a firm's cost of equity with the CAPM the standard procedure is to proxy the market portfolio by a share index. Since this index is not the market portfolio this may give rise to a bias in estimating the firm's cost of equity. This paper investigates this bias and concludes that it will arise if the factor coefficients are not proportional to those of the index. Even moderate departures from this proportionality condition may produce significant bias.

Necessity of Using Intermediate Outcomes to Proxy Long Term Effects

Abstract: The objective of medicaI care is to improve patient health. There is increasing recognition of the importance of measuring the outcomes of care (mortality, morbidity, functional status and cost) to assess the value of medicaI interventions)I,2] However, assessment of health outcomes is complex. The assessment of long term healthcare outcomes is especially problematic, posing methodological, logistical and practical difficulties. This paper discusses some of the problems encountered in attempting to assess medicaI interventions that primarily affect long term health outcomes. The identification of circumstances under which proxies are necessary and appropriate, the role of short and intermediate term effects as proxies for long term outcomes, and how to best use such information are addressed.

The Inevitability of Mortality? Evaluating Alternatives to the SMR

Abstract: Study Objectives - (i) To develop a non-mortality based proxy for relative needs for health care among regional populations. (ii) To compare this proxy with a mortality-based proxy for population relative needs. (iii) To evaluate the additional value of a proxy based on a combination of non-mortality and mortality based proxies. Design - Estimation of the relative odds of levels of self-assessed health by selected socioeconomic variables using population survey data. Application of the estimates to regional populations to calculate socioeconomic-based population ‘scores’. Comparison of the correlations of socioeconomic indicator (SEI) scores, standardized mortality rates (SMR) and combined indicator scores with regional populations’ self-assessed health levels. Setting - The province of Quebec, Canada. Coverage - The populations of the 15 health regions in Quebec. Main outcome measure: Performance of proxy indicators in explaining variations in self-assessed health levels among regions’ populations. Results - Variations in SEI scores among regions explain 37% of the observed variation in self-assessed health, 4% more than the level of variation explained by SMR scores. A weighted combination of both mortality and socio-economic based proxies explains 56 per cent of variation in self-assessed health. Conclusions - Justification of ‘deprivation weights’ in population-based resource allocation formulae should be based on empirical support concerning the performance of such weights as proxies for relative levels of need among populations. The SEI developed in this study provides a closer proxy to the self-assessed health of the populations under study than the SMR. The superior performance of the combined indicator suggests that the development of social deprivation indicators should be viewed as a complement to, as opposed to substitute for mortality-based measures in needs-based resource allocation exercises.

Education, training and earnings in Australia and Britain

Abstract: One of the key topics in the empirical education and training literature at the present time concerns how one correctly measures the causal impact of education and training on earnings. The central issue concerns how one appropriately controls for the fact that education and training outcomes are not randomly assigned across the population. Education and training outcomes are endogenous, being the result of individual choices, attributes and circumstances. Estimates of the returns to education and training which ignore this endogeneity may be biased. These biases arise because of correlation between unobserved individual characteristics such as ability or family attributes which determine education and training outcomes as well as wages. This thesis uses panel data from the Australian Longitudinal Survey (ALS), Australian Youth Survey (AYS) and British National Child Development Survey (NCDS) to estimate the economic returns to different types of education and training in Australia and Britain. These particularly rich data sets allow us to directly compare the advantages and disadvantages of the different estimation techniques which been devised to deal with the endogeneity of education and training. In particular we compare instrumental variable, fixed effect and proxy methods. Instrumental variable techniques require us to identify at least one variable which affects education or training, but not wages controlling for education and training. Fixed effect methods assume that the unobserved individual attributes are fixed (over time or within families) and use econometric models which difference out this fixed effect. Proxy methods require access to data which has explicit proxies for things like ability or family attributes. The data used in this thesis allows us to exploit each of these techniques. We find that education and training confer significant wage advantages on individuals. The actual size of the estimated returns, however, depends on the estimation procedure used. The results we obtain suggest that standard estimates which do not correct for the endogeneity of education and training generally underestimate the returns to education and training for both men and women in Australia and Britain. The thesis also examines gender wage differentials and looks at the role education and training plays in explaining these differences. We find that gender wage differentials generally decrease with education. We also find that part of the observed difference in the wages of men and women is due to the fact that men receive more work related training than women once in work.

The accuracy of capm proxies for estimating a firm's cost of equity

Abstract: In estimating a firm's cost of equity with the CAPM the standard procedure is to proxy the market portfolio by a share index. Since this index is not the market portfolio this may give rise to a bias in estimating the firm's cost of equity. This paper investigates this bias and concludes that it will arise if the factor coefficients are not proportional to those of the index. Even moderate departures from this proportionality condition may produce significant bias.