Denominator Effect Research Articles

Survival of 2,991 Patients With Surgical Lung Cancer: The Denominator Effect in Survival

To evaluate the current staging system of lung cancer, taking into account different selection criteria for the studied population.A total of 2,991 consecutive patients with surgical lung cancer were prospectively compiled from 19 Spanish hospitals (Bronchogenic Carcinoma Cooperative Group of the Spanish Society of Pneumology and Thoracic Surgery) between 1993 and 1997.The Kaplan-Meier method was used to calculate survival at 5 years (S5) for each pathologic stage, and the log-rank test was used for comparison purposes. These studies were performed in the total group (population 1, n = 2,972); excluding operative mortality and small cell lung cancer cases (population 2, n = 2,697); excluding cases with induction therapy (population 3, n = 2,542); excluding cases with exploratory thoracotomy (population 4, n = 2,304); and, lastly, excluding cases with incomplete resection (population 5, n = 2082) [70% of the initial population].The global S5 was similar in populations 1, 2, and 3: 34% (95% confidence interval [CI] 32 to 36%), 37% (95% CI, 35 to 39%), and 38% (95% CI, 35 to 39%), but different from that of populations 4 and 5: 40% (95% CI, 39 to 43%) and 43% (41 to 45%), respectively. For pathologic stage I, pathologic stage II, and pathologic state IIIA (pIIIA), S5 was similar in the five reported populations. In pathologic stage IIIB (pIIIB), there were differences in S5 between populations 1, 2, and 3 (13 to 15%; 95% CI, 10 to 19%) and populations 4 and 5 (26 to 29%; 95% CI, 19 to 38%). In population 4, there was no significant prognostic difference between two specific stage groups, that is between pathologic stage IB (pIB) and pathologic state IIA (pIIA) [p = 0.70] and between pIIIA and pIIIB (p = 0.79); the pathologic T3N2M0 combination has a S5 (13%) lower than that for pIIIB (26%).The definition of the population that constitutes the denominator for the analysis of survival in surgical lung cancer is important in pIIIB. The inclusion or exclusion of cases without resection is the most important factor for the selection of such population. This study detected that there are no prognostic differences between pIB and pIIA, and between pIIIA and pIIIB.

Discussion—The Effect of Risk on Price Responses to Unexpected Earnings

Chambers, Freeman and Koch test to see whether earnings response coefficients (ERCs), or stock returns per unit of unexpected earnings, are increasing in total risk. They generate this prediction from a model in which the sensitivity of dividend expectations to earnings news increases in total risk. They document a strong positive relation between ERCs and total risk, after controlling for variation in systematic risk and persistence. They do not find the negative relation between ERCs and systematic risk that prior ERC research had predicted and documented.I examine in turn the two central questions that Chambers, Freeman and Koch pose: (a) Which kind of risk do ERCs reflect: systematic, idiosyncratic or both (total)? and (b) Is the relation between ERCs and risk positive, zero or negative? I argue that accounting researchers’ inability to find a relation between ERCs and systematic risk is no surprise, given that modern finance research cannot document a relation between systematic risk and stock returns. I point out recent empirical work suggesting that earnings news has both numerator and denominator effects. I argue that the many research design differences between the current paper and previous ERC papers make it difficult to evaluate how much measurement error or model misspecification contributes to the different findings. I review recent empirical and theoretical finance research on idiosyncratic risk to place the paper’s findings in a broader context. Finally, I suggest avenues for further research.

God and the global economy: religion and attitudes towards trade and immigration in the United States

Using the results of a national identity survey, we test the impact of religious affiliation on trade and immigration-policy preferences of U.S. residents while controlling for individual level of skill, political ideology, and other important demographic characteristics. Our results show that religion is an important determinant of international-policy preferences as individuals who are pre-Vatican II Catholic or members of a fundamentalist Protestant denomination are more likely to prefer policies that restrict imports and immigration. Religiosity, in contrast, has a separate effect of moderating attitudes toward immigration. In addition, we find evidence of denominational effects among African Americans in that members of fundamentalist denominations tend to favor policies that restrict imports while others do not, implying that statistical results commonly attributed to racial effects may actually be a religion effect. Valuable comments and insights were provided by Jim McGibany, participants of the Third Annual Conference on Religion, Economics, and Culture, and two anonymous referees.

Individual, Congregational, and Denominational Effects on Church Members’ Civic Participation

Previous research demonstrates two aspects of religion that affect civic activity—church participation and religious conservatism. Conservative religious beliefs and membership in conservative denominations are often associated with low levels of civic activity while church participation is said to increase civic activity. This article advances the discussion of the relationship between religion and civic participation by introducing the congregational context. Data from the 1987 Church and Community Planning Inventory show that congregations vary in their members’ civic activity—congregational factors associated with conservative Christianity (high levels of biblical literalism and within‐church friendships) are strongly and negatively associated with church members’ activity in nonchurch organizations. At the individual level, the data show that education and participation in church activities other than religious services have particularly strong, positive effects on church members’ activity in nonchurch organizations. The findings demonstrate that a conservative congregational context limits church members’ activity in nonchurch organizations, potentially limiting their opportunities to build heterogeneous social networks and social capital that bridges church members to other people in their communities.

The Association between Changes in Interest Rates, Earnings, and Equity Values*

AbstractNumerous studies have documented that stock returns are negatively related to changes in interest rates, but there has been little corroborating research on the information in interest‐rate changes about the fundamentals that the stock market prices. The negative correlation is often attributed to changes in the discount rate, a denominator effect in a valuation model. However, there may also be a numerator effect on the expected payoffs that are discounted. This paper shows that changes in interest rates are positively related to subsequent earnings, but the change in earnings is typically not large enough to cover the change in the required return. Hence, the net (numerator and denominator) effect on equity value is negative, consistent with the results of the research on interest rates and stock returns.

Religion and preventative health care utilization among the elderly

Evidence supporting a relationship between religion and physical health has increased substantially in the recent past. One possible explanation for this relationship that has not received much attention in the literature is that health care utilization may differ by religious involvement or religious denomination. A nationally representative sample of older adults was used to estimate the effects of religious salience and denomination on six different types of preventative health care (i.e. flu shots, cholesterol screening, breast self-exams, mammograms, pap smears, and prostrate screening). Findings show that both men and women who report high levels of religiosity are more likely to use preventative services. Denominational differences show that affiliated individuals, especially those who are Jewish, are significantly more likely to use each type of preventative care than non-affiliated individuals. The results of this study open the door to further exploration of this potentially important, but relatively neglected, link between religion and health.

The Association between Changes in Interest Rates, Earnings, and Equity Values

Numerous studies have documented that stock returns are negatively related to changes in interest rates, but there has been little corroborating research on the information in interest rate changes about the fundamentals which the stock market prices. The negative correlation is often attributed to changes in the discount rate, a denominator effect in a valuation model. However, there may also be a numerator effect on the expected payoffs that are discounted. This paper shows that changes in interest rates are positively related to subsequent earnings, but the change in earnings is typically not large enough to cover the change in the required return. Hence the net (numerator and denominator) effect on equity value is negative, consistent with the results of the research on interest rates and stock returns.

Discussion of “The Differential Persistence of Accruals and Cash Flows for Future Operating Income versus Future Profitability”

Fairfield et al. (2003a, this issue) suggests that the accrual effect in Sloan (1996) is at least partly due to the fact that accruals signify an increase in (less-productive) net operating assets. Thus, the paper is a useful and thought-provoking reminder that accruals have both earnings and balance sheet effects. However, the impact of the empirical results is diminished by the lack of a convincing story that ties and grounds these results to other knowledge in the area. Sloan (1996) is an influential study, which documents a simple but important relation: the accrual portion of earnings is less persistent than the cash portion of earnings. In addition, Sloan finds that investors do not seem to fully appreciate the implications of accruals for future earnings, so that firms with high current accruals earn lower future stock returns. This study prompted a flurry of subsequent research which investigates the specific causes and explanations for this phenomenon. For example, Xie (2001) finds that the lower persistence of accruals is primarily due to the role of discretionary accruals, while Desai et al. (2002) argue that the accrual effect for stock returns is a variation on the ''value/glamor'' anomaly. Fairfield et al. (2003a, this issue), hereafter FWY, is another follow-up on Sloan (1996), which observes that the documented effects in accruals and cash flows concern variables scaled by some measure of investment (e.g., total assets). Thus, the documented lower persistence of scaled accruals could be due to one of two effects. First, it could be due to the lower persistence of unscaled accruals (a numerator effect), which is the commonly accepted explanation. Alternatively, FWY suggests that the lower persistence of scaled accruals could be due to the relation between accruals and growth in the investment base (a denominator effect). As the author points out, this alternative explanation seems promising because the concept of accruals is closely related to the concept of growth in assets. In fact, the commonly used balance sheet-based derivation of accruals reveals that the two concepts are at least somewhat mechanically related.

Are Uniform Solutions Focal? – The Case of International Environmental Agreements

The application of uniform solutions has several drawbacks, notably their lack of cost efficiency and their inability to guarantee individual rationality. A ‘proper’ specification of uniform solutions, however, reveals that uniform solutions that satisfy individual rationality always exist. When all countries hold private information about their own reduction costs, there only exists one solution that always satisfies individually rationality without use of side payments and the requirement of dominant strategy implementation: The solution that selects the smallest individually preferred uniform reduction which also give a theoretical explanation of the ‘lowest common denominator effect’.

An Empirical Analysis of the Effect of Changes in Interest Rates on Accounting Rates of Return, Growth, and Equity Values

This paper examines whether the documented negative correlation between changes in interest rates and stock returns is also observed in the fundamentals on which equity values are based. The negative correlation is often attributed to changes in the discount rate, a denominator effect in a valuation model. However, there may also be a numerator effect on the expected payoffs that are discounted, and it is this effect that the paper examines. The paper documents the effect of changes in interest rates on accounting profitability and asset growth that are tied to expected dividends and value in the residual earnings valuation model. The effects of changes in both real and nominal interest rates are investigated so that the effects of changes in expected inflation (that has been the focus of much of the research on interest rates and stock returns) are isolated. Accordingly, the paper evaluates the Modigliani and Cohn conjecture that investors do not understand the effect of changes in expected inflation on firms. The results show that both real and nominal rates are positively related to subsequent profitability and growth, at least in the near term. So, increases in interest rates are followed by higher profitability and growth. However, the resultant increase in earnings is typically not large enough to cover the increase in the required return from the increase in the interest rate. So the overall effect on equity value is negative, consistent with the results of the research on interest rates and stock returns.

The Changing Impact of Religion on the Sexual and Contraceptive Behavior of Adolescent Women in the United States

This study examined the relationship between religion and adolescent sexual and contraceptive behaviors in the US. Data were obtained from the 1982 and 1988 Cycles of the National Survey of Family Growth among a sample of women 15-44 years of age. Models examined the determinants of risk of intercourse and contraceptive use only for women who were virgins at the start of the 4-year period preceding each survey. Findings indicate few religious differences in the likelihood of virginity retention among Whites in 1982. By 1988 there were large religious differences in risk of intercourse. White fundamentalists were able to reverse trends and increase the likelihood of retaining virginity. Among fundamentalist Blacks 50% were more likely to remain virgins regardless of time period. Denomination influenced contraceptive choice at first intercourse and the effects differed by race. White Catholics and fundamentalists were less likely to use any method at first intercourse than other religions. Most women who used a method relied on condoms at first intercourse. Fundamentalists were the most likely to use the pill. Black Catholics were more likely to use the pill and Blacks of other religions tended to use the condom. 62% of Whites and 60% of Blacks aged 15-19 years used contraception especially the pill at the most recent intercourse. 60% of White adolescents and only 46% of Blacks used contraception at first intercourse. Denomination or attendance had little effect on current contraceptive behavior among White teens. Findings suggest that the effects of denomination on the risk of intercourse and contraceptive use initially were not maintained after first intercourse.

Dependency, Disarticulation, and Denominator Effects: Another Look at Foreign Capital Penetration

Less developed countries desparately need capital to develop, but countries dependent on foreign capital face slower economic growth, higher income inequality, and possibly impaired domestic capital formation. These conclusions emerge from a reassessment of Glenn Firebaugh's broad critique of capital dependency research, which exposed an important error in earlier studies. The solution charts new theoreticall ground by factoring dependency effects into the differential productivity of foreign and domestic investment and the negative externalities from foreign capital penetration. The revised formulation is applied to cross-national analyses of economic growth, decapitalization, and income inequality. The findings consistently support capital dependency theory.

Religious Switching for Marriage Reasons

Religious mobility (“switching”) takes place across a terrain defined by the spaces between religious denominations, where distance is usually measured by divergent beliefs and social status differences. The odds of moving from one denomination to another are determined by the distance between them, i.e., how far apart they are theologically and socially. However, many Americans switch religions to harmonize their marriage. The question arises as to whether this represents a different kind of religious mobility. Are denominations as distant when arrayed theologically or socially as when arrayed on the criterion of switching for reasons of marriage? Using an item from the National Survey of Families and Households establishing whether or not a religious switch occurred for reasons of marriage, the effects of denomination of origin and denomination of destination on the odds of switching for either set of reasons are compared. Switching for reasons of marriage redraws the map, pulling certain denominations closer together and creating more distance between others. Switching for reasons of marriage is more powerfully influenced by destination denomination than denomination of origin.

The Variable Effects of Religiosity and Denomination on Adolescent Self-Reported Alcohol Use by Beverage Type

Homogeneous effects logistic regression is used to examine the effects of personal religiosity and denomination on adolescent self-reported frequency of alcohol use by beverage type. Survey data from a sample of 3,065 male and female adolescents in grades seven through twelve in three midwestern states are employed. The findings are somewhat consistent with a hypothesis generated from the different cultural images of alcoholic beverages. For adolescents, the use of beer and liquor are largely restricted to recreational purposes, while wine has both functional and recreational uses. Because purely recreational use of psychotropic substances violates religious standards of asceticism, the effects of religiosity on the use of beer and liquor should be stronger than on the use of wine. The results show that the effects of personal religiosity are weakest for use of wine, but are relatively identical for beer and liquor.

Social influences on belief in creationism

This study uses correlation and regression analysis to examine two approaches to understanding belief in creationism and, by extension, an array of socially conservative attitudes: long‐term socialization and present community membership. Long‐term socialization gains clear support. There are independent effects of size of childhood hometown and having had a mother who played a traditional homemaker role (creationists tend to have come from smaller towns and to have had traditional mothers). There is fragmentary evidence of an independent effect of childhood denomination. However, there also is evidence of effects of present religious community membership in that there are differences between conservative Protestants and Christians from other denominations in predictors of beliefs. Among the latter, educational attainment has the strongest effect on scores on an index of creationist belief, but belief in the Bible has no effect. However, among conservative Protestants, education shows almost no effect at ...

Attitudes toward women and their work roles: Effects of intrinsic and extrinsic religious orientations

This study examined the effects of personal religious orientation, religious denomination, and gender on attitudes toward women and their work roles using a sample of 263 single undergraduate university students. Subjects with a high intrinsic religious orientation put significantly more emphasis on family than career in their anticipated general lifestyle relative to those with a low intrinsic religious orientation. Subjects with a high intrinsic religious orientation were also more likely to anticipate the female spouse spending less time in a profession during the children's early years. Males showed more traditional attitudes toward women than females, but there were no gender effects on measures of preferred general lifestyle, preferred child-care distribution, or preferred career involvement for the wife. Subjects belonging to mainline and conservative denomination did not differ significantly in their attitudes toward women or their work roles.

The Effects of Religion and Denomination on Earnings and the Returns to Human Capital

The effects of religious and denominational background on earnings and the returns to human capital are examined. When religious differences are constrained to be additive, apart from a Jewish differential, there is virtually no evidence that religious or denominational background affects earnings. This contrasts with Greeley's claims of sizable Catholic advantage. In separate earnings regressions we find that the marginal returns to Catholics from college education exceed those to similar Protestants. This offsets the disadvantage of lower precollege returns. Earnings differences between Protestant denominations appear to reflect the sorting of Protestants into denominations according to schooling and income.

Effects of religious denomination on sex differences in occupational expectations

The degree of difference between men and women in occupational expectations and attitude toward careers for married women are related to the degree of discrimination against women in religious denominations. Occupational expectations are scored along the dimension of masculinity. Discrimination against women is indicated by extent and timing of the ordination of women within the denominations for which subjects indicated a preference. Data are a subselection of 12,018 cases from a national sample of 189,733 first-time full-time entering college freshmen. The difference between women and men in masculinity of occupational choice and agreement with the attitude “Activities of married women are best confined to the home and family” are positively related to denominational discrimination against women.

On ‘spurious’ correlations in Rb-Sr isochron diagrams

A general null hypothesis for isotope geochemistry states that the isotopic composition of an element is independent of its concentration or any other geochemical property of the population. ‘Spurious’ correlations between the ratios 87Sr/ 86Sr and 87Rb/ 86Sr (orRb/Sr), due to the common denominator effect, may be ruled out because they contradict this null hypothesis. Mixing processes may be regarded as geochemical counterparts of the common denominator effect. In geochronological systems which satisfy the basic assumptions of the Rb-Sr isochron method observed correlations between Sr isotope abundance and Sr concentration must be secondary to the direct causal dependence of 87Sr/ 86Sr upon Rb/Sr ratios.

Artificial isochrons

The rubidium-strontium isochron procedure has proven to be a powerful tool in many geochemical studies. An isochron is said to exist if a plot of ( 87Sr/ 86Sr) versus ( 87Rb/ 86Sr) produces a linear trend with a large correlation coefficient. However, the variables selected to portray the isochron have the same denominator ( 86Sr) and Pearson long ago noted that a large correlation could be induced when such ratios are formed from uncorrelated numerators and denominators. A set of numerical experiments are described that illustrate the common denominator effects as applied specifically to rubidium-strontium systematics. For at least one previously published RbSr isochron it can be shown that the common denominator effect is capable of producing a correlation coefficient that is very nearly 1.000. However, it is also shown that, for the data sets analyzed, the common denominator effect can not produce a geologically meaningful isochron. The numerical approach to assessing the common denominator effect can be applied only to those sets of isotopic analyses in which 87Rb and 86Sr have been determined by isotope dilution techniques. For the many data sets in which only the ratios ( 87Sr/ 86Sr) and ( 87Rb/ 86Sr) have been determined the common denominator effect can neither be assessed nor dismissed as trivial.