Philip L. Hersch

Determinants of automobile PAC contributions to house incumbents: Own versus rival effects *

This paper examines PAC contributions by the Big ThreeU.S. automakers and Japanese auto dealers to Houseincumbents. A regression model is estimated where PACcontributions are a function of a firms own ties toan incumbents district (as measured by firmemployment) and those of rivals. For the Big Three,own and U.S. rival effects are positive. Further, theresults do not indicate the presence of a free-ridereffect. Employment by a foreign subsidiary has no neteffect on U.S. contributions. For the Japanesedealers, Japanese plant employment has a positiveimpact on contributions, and that of the Big Three anegative.

Competition and the performance of hospital markets

This paper explores the relationship between competition and market performance for the primarily nonprofit industry, hospital services. A theoretical framework is adopted that assumes hospitals compete for physician affiliations on the basis of hospital price and resources provided. The model indicates that monopoly power leads to higher quality-adjusted hospital prices, resulting in a reduction in the level of hospital resources consumed. This reduction can occur through admissions, patient length of stay, or resources consumed per patient-day. A regression analysis reveals that all three are reduced as market concentration increases.

Additions to Corporate Boards: Does Gender Matter?

This paper examines the determinants of a firm adding a woman to its board of directors. Using panel data for a sample of large publicly held firms for the years 1990-1999, we find that the probability of adding a woman to a board in a given year is inversely related to the number of woman directors already on the board. Further the probability of adding a woman is substantially increased whenever a woman departs the board relative to the departure of a male outside director. Clearly then, gender is a factor in board hiring decisions. The evidence is mixed, however, as to whether gender became less of a decision factor in the latter part of the decade of the nineties. Lastly, the results suggest that the overall increase in female board representation during the past decade was due to a greater demand for diversity, rather than simply an increase in the pool of qualified female board candidates.

Forecaster Characteristics and Forecast Outcomes

Abstract Panel data drawn from The Wall Street Journal’s survey of economic forecasts were used to assess the impact of a forecaster’s institutional setting and professional experience on forecast accuracy and bias. Regression results indicate differences in forecaster characteristics have little effect on accuracy, but significantly affect the direction of bias in forecasting interest rates, the inflation rate, real GDP growth and the yen/dollar exchange rate.

Separation of ownership from control and the demand for corporate aircraft

Evidence is offered on the relationship between separation of ownership from control and managements profit-maximizing behavior. Various regression models, built around managerial equity holdings, are specified to capture managements consumption behavior via the ownership of executive aircraft. These aircraft are widely perceived as being the ultimate in managerial perquisites. The results indicate that both the probability of possessing a corporate executive fleet and the value of existing fleets decline as managerial equity holdings increase. These findings are consistent with the convergence of interests hypothesis, wherein managerial equity holdings strengthen the incentives for managers to maximize profit.

Does the NCAA coaching carousel hamper the professional prospects of college football recruits

College football recruits choose their schools partly for the opportunity to play for a specific coach. It is not unusual for the coach who recruited the player to leave before the end of the player’s career. This article investigates whether these departures affect a player’s National Football League (NFL) draft prospects. Regression results indicate that, for players drafted, a coaching change drops the average draftee’s position nearly two thirds of a round, potentially costing the player hundreds of thousands of dollars in guaranteed money. This harmful effect holds regardless of why the coach left, such as being fired or accepting a new position elsewhere.

Customer discrimination against black major league baseball pitchers reconsidered

The proposition that customer prejudices reduce attendance at major league baseball games with black starting pitchers is re-examined. In contrast to earlier studies, no such effect is found.

Executive compensation and executive contributions to corporate PACS

This paper estimates the determinants of the contributions made by top executives to their firms Political Action Committee (PAC). We find that executives personal PAC contributions (proxy for the interest of the firm) are positively related to his shareholdings, income and option holdings (proxies for the interests of the executive). Contributions are also higher for CEOs and board members. This is direct evidence that the structure of the contracts between the firm and management, especially compensation, aligns managers personal behavior with the interests of the firm.

Voter demand for fluoridated water: a tale of two c(av)ities

Government fluoridation of public water systems to promote dental health has long been advocated by many health associations, based on the findings of mainstream scientific studies. Despite this, fluoridation remains a controversial issue. Some in the public are antithetical to the science behind fluoridation while others view it as an infringement on individual choice. Voting data from referendums in two of the six largest US cities without fluoridated water (Portland, Oregon, and Wichita, Kansas) are used to examine the factors driving voter demand for and against fluoridation. Although regression analysis reveals differences between the cities, a strong commonality is greater support for fluoride coming from voting precincts with higher concentrations of college graduates. Additionally, even though advocates often laud water fluoridation as a relatively inexpensive way to extend dental health benefits to all children (regardless of income levels), presence of children in households surprisingly does not appear to translate into voter support. Lastly, after controlling for socio-economic factors, results suggest that opposition to fluoridation does not appear to come from the political centre, but from the libertarian right and environmental left.

Does General Manager Networking Affect Choice of Trade Partners in Major League Baseball

It is not unusual for baseball general managers (GMs) to have network ties to their potential trading partners, either to the other teams’ GMs or to the teams themselves. This article investigates whether these connections affect the degree of trading activity between specific team pairs. Estimates indicate that connections between GMs and commonalities between GMs enhance trade, although in absolute terms the effects are small. However, a GM simply having a professional tie to another team does not have any statistically significant effect. On the whole, our results are consistent with those found in the socioeconomic networking literature.