ItemMilitary Spending and the Fear Hypothesis(2024-02-25) Isomitdinov, HasanThis paper analyzes the relevance of the fear hypothesis on military expenditures by accounting for the distance to a potential threat country. We find little evidence of increasing military spending based on the proximity of threatening nations. Instead, we find that membership in organizations such as NATO does have a statistically significant mitigating effect on military spending. ItemMulti-Site Bundling of Drought Tolerant Maize Varieties and Index Insurance(Wiley, 2020) Awondo, Sebastain N.; Kostandini, Genti; Setimela, Peter; Erenstein, Olaf; University of Alabama Tuscaloosa; University of Georgia; CGIAR; International Maize & Wheat Improvement Center (CIMMYT)Drought Tolerant Maize Varieties (DTMV) and Rainfall Index Insurance (RII) are potential complements, though with limited empirical basis. We employ a multivariate spatial framework to investigate the potential for bundling DTMV with a simulated multi-site and multi-environment RII, designed to insure against mild, moderate and severe drought risk. We use yield data from on-farm trials conducted by the International Maize and Wheat Improvement Center (CIMMYT) and partners over 49 locations in Eastern and Southern Africa spanning 8 countries and 5 mega-environments (dry lowland, dry mid altitude, wet lower mid altitude, low wetland and wet upper mid altitude) in which 19 different improved maize varieties including DTMV were tested at each location. Spatially correlated daily rainfall data are generated from a first-order two-state Markov chain process and used to calibrate the index and predict yields with a hierarchical Bayes multivariate spatial model. Results show high variation in the performance and benefits of different bundles which depend on the maize variety, the risk layer insured, and the type of environment, with high chances of selecting a sub-optimal and unattractive contract. We find that complementing RII with a specific DTMV produces contracts with lower premiums and higher guaranteed returns especially in dry lowland increasing the chances of scaling up RII within this environment. ItemFood Insecurity amid the COVID-19 Pandemic: Food Charity, Government Assistance, and Employment(University of Toronto Press, 2021) Men, Fei; Tarasuk, Valerie; University of Toronto; University of Alabama TuscaloosaTo mitigate the effects of the coronavirus disease 2019 (COVID-19) pandemic, the federal government has implemented several financial assistance programs, including unprecedented funding to food charities. Using the Canadian Perspectives Survey Series 2, we examine the demographic, employment, and behavioural characteristics associated with food insecurity in April-May 2020. We find that one-quarter of job-insecure individuals experienced food insecurity that was strongly associated with pandemic-related disruptions to employment income, major financial hardship, and use of food charity, yet the vast majority of food-insecure households did not report receiving any charitable food assistance. Increased financial support for low-income households would reduce food insecurity and mitigate negative repercussions of the pandemic. ItemThe long-term effects of cancer survivorship on household assets(BMC, 2020) Pak, Tae-Young; Kim, Hyungsoo; Kim, Kyoung Tae; Sungkyunkwan University (SKKU); University of Kentucky; University of Alabama TuscaloosaBackground Less is known about the impact of cancer on household assets and household financial portfolio during which cancer survivors face higher mortality risk. Economic theory predicts that cancer survivors would deplete their wealth in such a way that meets immediate financial needs for treatment and that hedges the risk of anticipated medical expenses associated with recurrence. Building upon this prediction, we examine long-term changes in household assets in response to cancer diagnosis among middle-aged and elderly Americans (age >= 50). Results Using the 2000-2014 waves of the Health and Retirement Study, we estimated the household fixed effects regression that regresses household assets on time elapsed since cancer diagnosis (<= 2 years, > 2 but <= 4 years, > 4 but <= 6 years, and > 6 but <= 8 years). Regression estimates were adjusted for demographic characteristics, general health condition, employment outcomes, and household economic attributes. Household assets were measured by total net worth as well as the amount of savings held in each asset category. The loss of household assets attributable to cancer was estimated to be $125,832 in 2015 dollars per household with a cancer patient. This change came from statistically significant reductions in investment assets, miscellaneous savings, real estate equity, and business equity, and increases in unsecured debt. We also found 17.2-28.0% increases in cash and cash-equivalent assets from + 2 years since diagnosis through the rest of the study periods. The accumulation of cash was observed for both the well-insured group (multiple coverages) and those with limited insurance (single coverage). Conclusions The results showed evidence of both asset depletion and precautionary accumulation of liquid assets among cancer survivors, which reduces risk exposure of household financial portfolio. Our findings highlighted that household asset is an important source of liquidity to finance cancer care and to absorb the expected expenditure risk associated with cancer recurrence. We also showed that health insurance provides limited coverage of health risks associated with cancer. ItemThe Able Worry More? Debt Delinquency, Financial Capability, and Financial Stress(Springer, 2022) Xiao, Jing Jian; Kim, Kyoung Tae; University of Rhode Island; University of Alabama TuscaloosaResearch on the link between debt and financial stress is emerging. This study was one of the first attempts to examine the association between debt delinquency and financial stress and the moderating role of financial capability in the association. Delinquencies in three types of debts were examined: (a) mortgage, (b) credit card, and (c) student loan. With data from the 2018 U.S. National Financial Capability Study, multivariate regression results showed that payment delinquencies of mortgage, credit card and student loans were positively, while financial capability was negatively associated with financial stress. Further, surprisingly, the results implied that among consumers with debt delinquencies, financial capability may increase financial stress. If both financial capability's direct and interactive effect were considered, financial capability may decrease financial stress at much smaller rates than those without debt delinquencies. The situation was the worst among consumers with multiple delinquencies, in which the potential net effect of financial capability on financial stress was positive. The results of this study have implications for consumer financial service practices. ItemThe Social and Economic Impact of Covid-19 on Family Functioning and Well-Being: Where do we go from here?(Springer, 2022) Andrade, Claudia; Gillen, Martie; Molina, Jose Alberto; Wilmarth, Melissa J.; Instituto Politecnico de Coimbra (IPC); University of Florida; University of Zaragoza; University of Alabama TuscaloosaA growing body of research demonstrates that COVID-19 has had a profound impact on family functioning and well-being in a range of countries. The fear and uncertainty of the health risks, in addition to the stress from ensuing restrictions and constraints on everyday life caused major disruptions, impacting the financial, emotional, and physical well-being of adults and children alike. In this report, we summarize the current literature on the impact of COVID-19 disruption to family functioning and economic well-being as a context for this special issue. Our findings indicate that while the pandemic may have caused a reallocation of intra-familial tasks, a large gender disparity remains regarding the proportion of domestic work and childcare. The pandemic disproportionally impacted lower-income families, families from ethnic minority and vulnerable groups, and women. Finally, the financial impacts of the emergence in Spring of 2020 have strained family relationships, although the effects depend to a large extent on quality of the relationships and family well-being before COVID-19. To address the long-term bidirectional effects of the pandemic on family well-being and the well-being of the global economy calls for research that crosses disciplinary divides. ItemSkint: Retirement? Financial Hardship and Retirement Planning Behaviors(Springer, 2022) Fan, Lu; Stebbins, Richard; Kim, Kyoung Tae; University of Missouri Columbia; University of Alabama TuscaloosaThis study used data from the 2018 National Financial Capability Study to investigate the association between financial hardship and retirement planning behaviors. Results from logistic regressions showed that respondents with high difficulty making ends meet were more likely to calculate retirement needs and more likely to own a non-employer sponsored retirement plan. The perceived over-indebtedness was positively associated with owning an employer-sponsored account while negatively associated with owning a non-employer-sponsored account. Financial fragility was associated with a lower likelihood of calculating retirement needs and having a retirement account. The results of additional generational analyses revealed that the difficulty making ends meet and the perceived over-indebtedness showed different patterns with retirement planning behavior across three generations. In contrast, financial fragility showed consistent and negative associations with the retirement planning behaviors across generations. ItemMeasuring higher order ambiguity preferences(Springer, 2018) Baillon, Aurelien; Schlesinger, Harris; van de Kuilen, Gijs; Erasmus University Rotterdam; Erasmus University Rotterdam - Excl Erasmus MC; University of Alabama Tuscaloosa; Tilburg UniversityWe report the results from an experiment designed to measure attitudes towards ambiguity beyond ambiguity aversion. In particular, we implement recently-proposed model-free preference conditions of ambiguity prudence and ambiguity temperance. Ambiguity prudence has been shown to play an important role in precautionary behavior and the mere presence of ambiguity averse agents in markets. We observe that the majority of individuals' decisions are consistent with ambiguity aversion, ambiguity prudence and ambiguity temperance. This finding confirms the prediction of many popular (specifications of) ambiguity models and has important implications for models of prevention behavior.