Existing studies have argued that market-wide sentiment primarily affects individual noise traders. Contrary to this perspective, in this study, we find that financial analysts, who are sophisticated market participants, may be more vulnerable to sentiment than their peers. We predict that, due to analysts' preference for growth investing, their fair value estimations for growth stocks would be more upwardly biased by bullish market-wide sentiment than those of their market peers. We also predict that this biased estimation for growth stocks would lower the investment value of their recommendations. As is consistent with our predictions, we find that, especially during periods of bullish sentiment, analysts consider growth stocks to be undervalued, even though these stocks are in fact overvalued. In addition, recommended stocks experience poor relative return performance, especially after periods of bullish sentiment, and that this poor performance is not observed after controlling for growth factors.
We investigate the effects of opacity of information a firm discloses on stock price synchronicity and crash risk. We develop an analytical model in the presence of firm-specific information and market-wide information. Stock price synchronicity is predicted to increase with the opacity of firm-specific information. Our model also reveals that stock crashes are more frequent and more severe for the opaque firms. These predictions are confirmed empirically. Further, our model predicts that after a catastrophic event stock prices become synchronous with the market because of investors' limited attention, and hence the frequency and severity of a stock crash increase. We use the Great East Japan Earthquake as a representative catastrophe to examine these implications, and provide support for the model. Finally, we find that a stock price of a firm disclosing opaque information tends to be synchronous with the market, and hence experiences a more serious crash from the earthquake, which is consistent with the model.
Aided with unique “study log” data retrieved from e-learning, we directly measure daily homework progress to flexibly assess procrastination behavior of high school students, whose behavior is known to be susceptible to present-bias, one of the impediments for adolescents' studying. Specifically the homework is merely a non-binding goal. Our main findings are followings; first, the non-binding goal encourages considerable number of students to study more to achieve the goal. Second, mostly, the progress of the high achievers are quite intensive right before the deadline, particularly in Math for female. Finally, considerable number of high achievers study hard to try to meet the deadline without fine, even when they face with huge burdens as a result of their procrastination, or stress from the task. While the first and third findings suggest that the non-binding goal indeed assists students to exert strong effort to attenuate present-bias, the second finding shows that the exertion is procrastinated until right before the deadline, implying that present-bias preferences still have an explanatory power in the dynamics.
To examine the degree to which price fluctuations affect how individuals approach an intertemporal decision making problem, we conduct a laboratory experiment in which subjects spend their savings on consumption over 20 periods. In the control treatment, the commodity price is constant across all periods. In the small (large) price fluctuations treatment, the price rate of change is always 1% (20%). The rate of change of savings is always the same as the commodity price. Our main findings are threefold. First, the magnitude of misconsumption is significantly high in order of the control, small price fluctuation, and large price fluctuation treatments. Second, in the control treatment, the magnitude of misconsumption shrinks over time, whereas it gradually increases in the small and large price fluctuation treatments. Finally, regardless of the presence of price fluctuations, subjects exhibit under-consumption behavior and the presence of price fluctuations strengthens such a tendency.
Not very much is known about poverty in Japan. Until recently, official figures on the diffusion of income poverty among the population did not exist. The Japanese income poverty rate was first announced in October 2009, almost 40 years after the United States did so. Even less is known about multidimensional poverty and material deprivation. A new multidimensional poverty index, including food, clothing and other living conditions, has been in the making since 2012 but, to the best of our knowledge, no official measure exists as of today. What is the share of the population in non-income poverty? How many Japanese are unable to enjoy the minimum standards of living? And who are they according to demographic and social characteristics? These are some of the questions we answer in this paper. We base our analysis on aspects of material living conditions collected in the Quality of Life Survey in 2012 and 2013 conducted by the Economic and Social Research Institute (ESRI), Cabinet Office of Japan.
The main purpose of this paper is to examine the effects of worldviews on individual altruistic behaviors toward anonymous others, through experimental researches conducted in churches and universities in Korea, Japan and the US. The experiments were designed to compare the results between Christians and non-Christians and among the Koreans, Japanese and Americans. We found a significant correlation between the worldview and the amount of donation among Christians in Japan and Korea. Among Korean and Japanese Christians, those who believe in punishments for any bad behaviors are less likely to donate. One possible interpretation is that the punishment-related worldview might be correlated with the perception of the origin of suffering. If respondents believe that suffering is resulted from one's own irresponsible deeds, they would be less willing to make a charitable donation to anonymous others. It should be noted that the small size of our samples hinders from drawing concrete comparisons between Christians and non-Christians and between countries. Our overall estimation results should be interpreted as hinting that worldviews might affect a set of rules that determine individual altruistic decision.
This paper investigates how people's happiness depends on their current activities and time. For this aim, we conducted an hourly web survey, where 70 students reported their happiness every hour on a day every month from December 2006 to February 2008. This method is an extension of experience sampling method (ESM) in that it uses mobile phones and personal computers. Our newly method has the same merit of ESM that can measure real time happiness data and escape from reflection and memorial bias. Using our newly method, we can obtain diurnal happiness data of respondents and also grasp their behavior at each of their reporting time during 14 months. Analyzing the data of our survey, we found (a) happiness significantly depends on activities, hours, and months, (b) while most of the time-variation of happiness is attributed to time pattern of activities, happiness varies with hours in a day, even when activities are controlled. (c) while activities affect similarly both genders, there are gender gaps of diurnal happiness pattern, after controlling activities.
We use the data of 10,577 donations on an online fundraising platform and explore an answer for when a donor is more likely to be influenced by other donors. The important feature of this platform is that a fundraising page displays each amount of the previous individual donations in chronological order. In our empirical model, we construct variables to explain the information that a donor actually sees on the webpage. The main variables are the modal amount among the last five donations and their appearances along the sequence. We find that when a greater number among the last five donors make a same amount donation, it is more likely that a new donation is equal to that modal donation amount. However, we do not see this phenomenon when the last two continuous donors give in the same amount. These findings indicate that the last continuous three or more modal donations have significantly positive impacts on the likelihood that a new donation is equal to the modal amount.