This lecture considers the case for consumer financial regulation in an environment where many households lack the knowledge to manage their financial affairs effectively. The lecture argues that ...financial ignorance is pervasive and unsurprising given the complexity of modern financial products, and that it contributes meaningfully to the evolution of wealth inequality. The lecture uses a stylized model to discuss the welfare economics of paternalistic intervention in financial markets, and discusses several specific examples including asset allocation in retirement savings, fees for unsecured short-term borrowing, and reverse mortgages.
Household Finance CAMPBELL, JOHN Y.
The Journal of finance (New York),
August 2006, Letnik:
61, Številka:
4
Journal Article
Recenzirano
Odprti dostop
The study of household finance is challenging because household behavior is difficult to measure, and households face constraints not captured by textbook models. Evidence on participation, ...diversification, and mortgage refinancing suggests that many households invest effectively, but a minority make significant mistakes. This minority appears to be poorer and less well educated than the majority of more successful investors. There is some evidence that households understand their own limitations and avoid financial strategies for which they feel unqualified. Some financial products involve a cross-subsidy from naive to sophisticated households, and this can inhibit welfare-improving financial innovation.
Forced Sales and House Prices Campbell, John Y.; Giglio, Stefano; Pathak, Parag
The American economic review,
08/2011, Letnik:
101, Številka:
5
Journal Article
Recenzirano
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This paper uses data on all house transactions in Massachusetts over the last 20 years to show that houses sold after foreclosure, or close in time to the death or bankruptcy of a seller, are sold at ...lower prices than other houses. Foreclosure discounts are on average at 27 percent of the value of a house. Moreover, foreclosures that take place within small local geographies of a house lower the price at which it is sold. Our preferred estimate is that a foreclosure at a distance of 0.05 miles lowers the price of a house by about 1 percent. JEL: D14, R31 PUBLICATION ABSTRACT
Over the past 20 years, protein engineering has been extensively used to improve and modify the fundamental properties of fluorescent proteins (FPs) with the goal of adapting them for a fantastic ...range of applications. FPs have been modified by a combination of rational design, structure-based mutagenesis, and countless cycles of directed evolution (gene diversification followed by selection of clones with desired properties) that have collectively pushed the properties to photophysical and biochemical extremes. In this review, we provide both a summary of the progress that has been made during the past two decades, and a broad overview of the current state of FP development and applications in mammalian systems.
Monomeric red and far-red FPs and indicators now perform nearly as well as the best green FPs (and indicators).
Reversible and irreversible photochromism in FPs can be exploited to increase optical resolution and improve contrast compared with traditional fluorescence microscopy.
Infrared FPs (IFPs) are becoming ever more useful as labels for various proteins that allow correct localization and whole-animal imaging. IFPs can serve as an additional fluorescent ‘color’ for simultaneous imaging with visible FP-labeled proteins.
Bacterial phytochrome (BphP)-based IFPs provide a new scaffold for engineering fluorogenic indicators, which are ideal to visualize spatiotemporal dynamics of cell signaling in vivo.
Small ultra-red FP (smURFP) is the brightest far-red nonprototypical FP (comparable with EGFP) and is extremely photostable. smURFP may prove particularly useful as a photostable FP for super-resolution imaging and as a FRET acceptor for biosensing applications.
The engineering of new fluorescent indicators that combine features of prototypical FP-based indicators with photochromic proteins can reveal the cellular maps of biochemical activities in super-resolution.
FPs can be used as optogenetic actuators to manipulate cellular and protein functions through chromophore-assisted light inactivation or light-controlled protein oligomerization.
In Search of Distress Risk CAMPBELL, JOHN Y.; HILSCHER, JENS; SZILAGYI, JAN
The Journal of finance (New York),
December 2008, Letnik:
63, Številka:
6
Journal Article
Recenzirano
Odprti dostop
This paper explores the determinants of corporate failure and the pricing of financially distressed stocks whose failure probability, estimated from a dynamic logit model using accounting and market ...variables, is high. Since 1981, financially distressed stocks have delivered anomalously low returns. They have lower returns but much higher standard deviations, market betas, and loadings on value and small-cap risk factors than stocks with low failure risk. These patterns are more pronounced for stocks with possible informational or arbitrage-related frictions. They are inconsistent with the conjecture that the value and size effects are compensation for the risk of financial distress.
A Model of Mortgage Default CAMPBELL, JOHN Y.; COCCO, JOÃO F.
The Journal of finance (New York),
August 2015, Letnik:
70, Številka:
4
Journal Article
Recenzirano
In this paper, we solve a dynamic model of households' mortgage decisions incorporating labor income, house price, inflation, and interest rate risk. Using a zero-profit condition for mortgage ...lenders, we solve for equilibrium mortgage rates given borrower characteristics and optimal decisions. The model quantifies the effects of adjustable versus fixed mortgage rates, loan-to-value ratios, and mortgage affbrdability measures on mortgage premia and default. Mortgage selection by heterogeneous borrowers helps explain the higher default rates on adjustable-rate mortgages during the recent U.S. housing downturn, and the variation in mortgage premia with the level of interest rates.
This paper studies the pricing of volatility risk using the first-order conditions of a long-term equity investor who is content to hold the aggregate equity market instead of overweighting value ...stocks and other equity portfolios that are attractive to short-term investors. We show that a conservative long-term investor will avoid such overweights to hedge against two types of deterioration in investment opportunities: declining expected stock returns and increasing volatility. We present novel evidence that low-frequency movements in equity volatility, tied to the default spread, are priced in the cross section of stock returns.
Goyal and Welch (2007) argue that the historical average excess stock return forecasts future excess stock returns better than regressions of excess returns on predictor variables. In this article, ...we show that many predictive regressions beat the historical average return, once weak restrictions are imposed on the signs of coefficients and return forecasts. The out-of-sample explanatory power is small, but nonetheless is economically meaningful for mean-variance investors. Even better results can be obtained by imposing the restrictions of steady-state valuation models, thereby removing the need to estimate the average from a short sample of volatile stock returns.
This paper investigates the efficiency of household investment decisions using comprehensive disaggregated Swedish data. We consider two main sources of inefficiency: underdiversification (“down”) ...and nonparticipation in risky asset markets (“out”). While a few households are very poorly diversified, most Swedish households outperform the Sharpe ratio of their domestic stock index through international diversification. Financially sophisticated households invest more efficiently but also more aggressively, and overall they incur higher return losses from underdiversification. The return cost of nonparticipation is smaller by almost one‐half when we take account of the fact that nonparticipants would likely be inefficient investors.
ABSTRACT
We build a cross‐sectional factor model for investors' direct stockholdings and estimate it using data from almost 10 million retail accounts in the Indian stock market. Our model identifies ...strong investor clienteles for stock characteristics, most notably firm age and share price, and for particular clusters of stock characteristics. These clienteles are intuitively associated with investor attributes such as account age, size, and diversification. Coheld stocks tend to have higher return covariance, inconsistent with simple models of diversification but suggestive that clientele demands influence stock returns.
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