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Research and Publications - Department of Economics, Finance & Legal Studies

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Browsing Research and Publications - Department of Economics, Finance & Legal Studies by Subject "Business, Finance"

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    Evaluating Life Expectancy Evaluations
    (Routledge, 2018) Bauer, Daniel; Fasano, Michael V.; Russ, Jochen; Zhu, Nan; University of Alabama Tuscaloosa; Ulm University; Pennsylvania State University; Pennsylvania State University - University Park
    The quality of life expectancy estimates is one key consideration for an investor in life settlements. The predominant metric for assessing this quality is the so-called A-to-E ratio, which relies on a comparison of the actual to the predicted number of deaths. In this article, we explain key issues with this metric: In the short run, it is subject to estimation uncertainty for small and moderately sized portfolios; and, more critically, in the long run, it converges to 100% even if the underwriting is systematically biased. As an alternative, we propose and discuss a set of new metrics based on the difference in (temporary) life expectancies. We examine the underwriting quality of a leading U.S. life expectancy provider based on this new methodology.
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    Minimum Wage Changes across Provinces in China: Average Treatment Effects on Employment and Investment Decisions
    (MDPI, 2021) Luo, Ji; Henderson, Daniel J.; Nankai University; University of Alabama Tuscaloosa; IZA Institute Labor Economics
    We exploit data from the China Household Finance Survey to examine the impact of changes in the minimum wage on employment and investment decisions. We are able to non-parametrically identify the average treatment effect on the treated via exogenous variation in the minimum wage across provinces. We find that changes in the minimum wage had no adverse effects on employment (in terms of days worked per month or hours worked per work day) but found evidence that changes in the minimum wage impacted the percentage of families that had a bank account, a family in a rural area owned their home, and whether families (whose highest level of education was primary school) planned to purchase a home.