Can't Buy Happiness
People with greater income tend to devote more time to work, community
and activities such as shopping and child care.
The more money you earn, the more time you are likely to spend working,
commuting and doing other compulsory activities that bring little pleasure,
according to new research by marketing professor Norbert Schwarz.
Schwarz and colleagues analyzed the link between money and happiness
in an article that appeared in the June 30 issue of Science.
They present new evidence showing that what they call "the focusing
illusion" affects how people respond when asked how happy or how
satisfied they are with their lives.
"When people consider the impact of any single factor on their well-being—not
only income—they are prone to exaggerate its importance," said
The researchers reviewed several possible reasons why income has a weak
effect on happiness, including their own explanation—as income rises,
people's time use does not appear to shift toward activities associated
with improved affect. More...
with Hard-to-Read Annual Reports Have Lower Earnings
There's a reason why some annual reports are difficult to read—they're
A new study by Feng Li, assistant professor of accounting,
shows that annual reports of firms with lower earnings are harder to read.
"Consistent with the motivation behind the plain English disclosure
regulation of the Securities and Exchange Commission, managers may be
opportunistically choosing the readability of annual reports to hide adverse
information from investors," Li said. "Firms with lower earnings
not only tend to file annual reports that are more difficult to read,
but a decrease in earnings from the previous year also results in annual
reports that are harder to read, compared with the previous year's reports."
Dating Games with Stock Options
Managers not only backdate, but forward-date, as well, say finance professors
M.P. Narayanan and H. Nejat Seyhun
the fallout from corporate accounting scandals has curtailed backdating
of stock options, it is still prevalent. In fact, executives also influence
their compensation by engaging in another kind of dating game—forward-dating.
When backdating, executives report to the Securities and Exchange Commission
that they received options from their corporate board on a date prior
to the actual time the board decision was made—if the stock price
was rising before the board decision date. More...