AN NBER PUBLICATION ISSUE: No. 5, May 2005

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
Countries in an intermediate range of political rights experience a greater risk of terrorism than countries either with a very high degree of political rights or than severely authoritarian countries with very low levels of political rights. After the terrorist attacks of September 11, 2001, politicians and policy experts drew a quick and intuitive line between terrorism and poverty. Much of the existing academic literature on conflict suggested that poverty...

Research Summaries

Article
Using a dataset of large U.S. companies from 1980 to 1994 and the CEOs' personal portfolio decisions as measures of overconfidence, they find that overconfident CEOs conduct more mergers and, in particular, more value-destroying mergers. How does the overconfidence of CEOs affect their corporations' performance? And how do investors perceive and react to CEO overconfidence? In two NBER Working Papers, authors Ulrike Malmendier and Geoffrey Tate examine the critical...
Article
Increases in the aggregate surplus of the trust funds are offset - perhaps completely - by reductions in the federal funds surplus. In fact, the trust fund surpluses result in enlarged deficits for the rest of the government. A critical question facing America is whether the assets in the federal trust funds will help future generations of workers finance the retirements of the baby boom generation. The 1983 Social Security Reforms (sometimes referred to as the...
Article
Mortality differences between insured and uninsured accident victims were larger at teaching hospitals, perhaps because they have more resources and 'provide costly, life-saving care to the insured.' Hospitals that received larger fractions of their budgets from public sources also showed treatment differences and slightly larger mortality differences than the full sample. As a group, people covered by health insurance generally are thought to spend about 40 percent...
Article
...cutting prices by 40 to 50 percent in the United States will lead to between 30 and 60 percent fewer R and D projects being undertaken in the early stage of developing a new drug. Relatively modest price changes, such as 5 or 10 percent, are estimated to have relatively little impact on the incentives for product development - perhaps a negative 5 percent. One of the main concerns of both business and Washington policymakers in recent years has been soaring health...
Article
Trends in marijuana use likewise suggest that the number of youths who use this substance rises as the real price falls, and vice versa. Heroin is uncommon among high school students, but cocaine use leaped from 5.6 percent of high school seniors in 1975 to 13.1 percent in 1985 at the same time that the real price of cocaine fell by approximately 64 percent. By studying data compiled over the past three decades, NBER Research Associate Michael Grossman determines that...

NBER periodicals, and newsletters are not copyrighted and may be reproduced freely with appropriate attribution.

See the Latest NBER Research
New Working Papers This Week