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AN NBER PUBLICATION ISSUE: No. 2, February 2006

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
Aggregate consumption may become more responsive to house prices as older homeowners become an increasing fraction of the population. Housing is the dominant component of wealth for the typical household in the United States or the United Kingdom, with residential property accounting for about 25 percent of aggregate household wealth in the United States in the late 1990s and for 35 percent of aggregate household wealth in the United Kingdom in the mid-1990s....

Research Summaries

Article
There are 'large gender differences in the propensity to choose competitive environments' and this needs to be taken into account in understanding why women are under-represented in many fields of work. The proportion of women in highly paid executive positions and in the professorial ranks of academic science and engineering is low relative to the proportion of women in the labor force. A number of explanations for this difference have been advanced. If women do not...
Article
The report-card effect on choice of HMO plan is entirely attributable to beneficiaries' responses to enrollee satisfaction scores (based on such factors as large parking lots and nice waiting rooms). Other reported quality measures, such as the mammography rate, did not affect enrollment. Consumer report cards are not a new phenomenon - many organizations evaluate the quality of products and services and publish such information for consumers. Governments too have...
Article
If the standard model accurately describes consumer behavior, then students buying a textbook should consider the by likelihood that a new edition will come out while the student is trying to sell the book. Chevalier and Goolsbee find that this is the case: students are less likely to purchase a textbook when the probability of a new edition arriving before the end of the semester is at its peak. In periods in which a book will certainly not be revised, book sales are...
Article
Individual investors in fact perform so poorly that one could use their mutual fund reallocations to predict future stock returns. It is a common practice for individual investors to shift money from one mutual fund to another in pursuit of better returns. In regard to future stock prices, however, Andrea Frazzini and Owen Lamont declare that such practice is nothing short of foolish. In Dumb Money: Mutual Fund Flows and the Cross-Section of Stock Returns (NBER...
Article
... regardless of the situation -- for example, in countries that have adopted sound economic policies or improved government institutions -- or the type of assistance involved, aid does not appear to stimulate growth over the short or long term. Challenging the simplistic but seductive view that increased assistance from rich countries is likely to put many poor countries on the path to prosperity, a new study on the impact of foreign aid finds "little evidence" that...

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