Self-Esteem and Earnings Recent research in economics suggests a positive association between self-esteem and earnings. A major problem in this literature is that from simple cross-sectional wage regressions it is not possible to conclude that self-esteem has a causal impact on earnings. While classical measurement error leads to an attenuation bias, reverse causality and omitted variable are l...

The widespread use of accounting information by investors and financial analysts to help value stocks creates an incentive for managers to manipulate earnings in an attempt to influence short-term stock price performance. This paper examines the role of earnings management in affecting a firm’s cost of capital. Using an agency model with multiple firms whose cash flows are correlated, we demons...

This paper uses Australian data from the Negotiating the Lifecourse Project (1996/97) to investigate the impact of marriage on men’s and women’s earnings. We extend earlier earnings research and investigate whether the effect of marriage is constant for men and women at different points on the conditional earnings distribution by using robust and quantile regression techniques. We find no assoc...

Conditions in the market for lawyers have been remarkably turbulent over the course of the last forty years, both in terms of the size of the legal industry and the earnings of attorneys. Similarly, law school demand has been in a state of constant flux, oscillating between cycles of boom and bust. This study examines the appeal of law school over the same period, using administrations of the L...

Some scholars have attributed earnings differences among locations to labor market conditions (“place effects”) whereas others have focused on the skill level of residents (“person effects”). We estimate a variety of selection models in an effort to detect differences in labor market conditions while controlling for differences in skill levels. We maintain the assumption that there are no barri...

We find that on average an announcement of rising unemployment is “good news” for stocks during economic expansions and “bad news” during economic contractions. Thus stock prices usually increase on news of rising unemployment, since the economy is usually in an expansion phase. We provide an explanation for this phenomenon. Unemployment news bundles two primitive types of information relevant ...

We examine whether rational investor responses to information uncertainty explain properties of and returns to accounting-based trading anomalies. We proxy for information uncertainty with two measures of earnings quality: the standard deviation of the residuals from a Dechow and Dichev [2002] model relating accruals to cash flows, and the absolute value of performanceadjusted abnormal accruals...

This paper describes a graphical procedure that was used to select the length and placement of the announcement period, the number of securities in the comparison portfolio, and the length of the comparison period for an event study involving over 16,000 earnings announcements. The literature does not suggest a single “best” methodological approach for an event study. Plotting information conte...