TY  - JOUR
AU  - Baker,Malcolm
AU  - Wurgler,Jeffrey
TI  - Appearing and Disappearing Dividends: The Link to Catering Incentives
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9995
PY  - 2003
Y2  - September 2003
UR  - http://www.nber.org/papers/w9995
L1  - http://www.nber.org/papers/w9995.pdf
N1  - Author contact info:
Malcolm Baker
Baker Library 261
Harvard Business School
Soldiers Field
Boston, MA  02163
Tel: 617/495-6566
Fax: 617/496-5271
E-Mail: mbaker@hbs.edu

Jeffrey Wurgler
Stern School of Business, Suite 9-190
New York University
44 West 4th Street
New York, NY  10012
Tel: 212/998-0367
Fax: 212/995-4233
E-Mail: jwurgler@stern.nyu.edu
AB  - We document a close link between fluctuations in the propensity to pay dividends and catering incentives. First, we use the methodology of Fama and French (2001) to identify a total of four distinct trends in the propensity to pay dividends between 1963 and 2000. Second, we show that each of these trends lines up with a corresponding fluctuation in catering incentives: The propensity to pay increases when a proxy for the stock market dividend premium is positive and decreases when it is negative. The lone disconnect is attributable to Nixon-era controls.
ER  -