The paper relates two phenomena in the stock market: the high return during the month of January and the apparent existence of widespread sales of stocks for tax purposes towards the end of the fiscal year. The findings suggest that, due to the tax‐induced sales, the price of many stocks over the last 35 years was temporarily depressed in December but recovered in the following January. This price recovery is a major contributor to the high returns observed in January. The tax effect is present in firms of all sizes but much more pronounced for small firms. The analysis also indicates that a more precise identification of the tax‐switch candidates may prove that the tax‐induced sales are, in fact, the sole contributor to the high January's returns.
This study analyzes the distribution of property crimes among small communities within a metropolitan area. We have tested whether a pool of criminals operating within a metropolitan area allocates its aggregate activity according to a rational pattern. The theoretical model based on utility maximization shows that, given a set of relatively reasonable assumptions, the number of offenses is positively related to the potential criminal gains and negatively related to police effectiveness. Community characteristics affect the level of criminal activity in each community, an hypothesis which is supported by the empirical results pre sented here. The concentration of wealth and commercial activities attracts crime, whereas the clearance rate deters crime.
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