Dark Knights Rising: The Aurora Theater and Newtown School Massacres and Shareholder Wealth

Purpose

This study analyzes the stock price impact of the Aurora theater and Newtown (Sandy Hook) school massacres on both domestic (US) and foreign theater operators and US gun manufacturers in an effort to document the economic effects of these tragedies.

Methods

The well-established “event study” methodology from the fields of economics and finance is employed to assess the impact of the shootings on the affected companies after controlling for risk and overall market movements.

Results

The Aurora theater shooting resulted in striking declines for Cinemark (the targeted theater) as well as major US competitors, but had no impact on overseas theater chains. Smith & Wesson (maker of the gun used in Aurora) showed no response, whereas Ruger (a competitor) exhibited large gains. Both Smith & Wesson and Ruger plunged after the Newtown shooting, although neither made the weapons used in the shooting.

Conclusions

Contrary to prior research on workplace homicides, the results show that random mass shootings have profound effects on targeted companies. In addition, the results suggest the presence of a very strong “contagion effect” (where negative events affecting one company impact others in the same industry). The negative responses of both publicly-traded US firearms manufacturers to the Newtown shooting suggests a “sea-change” in the debate over gun ownership in the US.     

Political Communication and Agroterrorism

This article reports results of a survey on consumer perceptions about agroterrorism conducted in October and November of 2004. As part of a more general survey the authors asked respondents who the most likely perpetrator of an agroterrorist attack would be. Of American consumers, 47.52% believed that the most likely attack would come from a state-sponsored terrorist organization or government, 23.47% from a non-state–sponsored terrorist organization, and only 14.46% for domestic terrorism. The article argues that at the time of the survey these perceptions of risk were at odds, in terms of history and the conventional wisdom, which would place higher likelihoods first on domestic terrorism, then foreign non-state–sponsored terrorism, and then foreign state–sponsored terrorism. These results are explored in detail using a combination of cross tabulation and PROBIT analysis and find that a key variable (among others) in risk perception is political affiliation. The article then discusses the role of political communication via the Iraq War and Al Qaeda to explain the results.     

Designing property rights for water: mediating market,government, and corporation failures

Recent decades have seen an acceleration in public concern about the allocation of increasingly scarce water supplies. There are many reasons for this concern, such as growth in urban populations. In this article, we focus on how surface water’s special qualities (the combination of spillovers, rent-seeking behavior, and common pool resources) complicate the assignment of property rights in any legal framework. These characteristics make specific market structures necessary in order to efficiently allocate rights. The state usually designs those structures. Yet, just like markets can fail, so can governments fail to effectively allocate those rights. So designers often turn to quasi-judicial conservancy boards as a second-best solution. We argue that those boards may themselves fail through a form of “corporation failure.” We address these three types of failures, and offer an analysis of two cases that suggests that the likelihood conservancy boards will suffer from corporate failure depends on the actions of the boards and outside stakeholders (like governments).

Die jüdischen Friedhöfe in Österreich: Zuständigkeiten aus völkerrechtlicher und verfassungsrechtlicher Sicht

Mit dem Washingtoner Abkommen ist Österreich eine Verpflichtung eingegangen, zusätzliche Unterstützung zur Restaurierung und Erhaltung jüdischer Friedhöfe in Österreich zu leisten. Über Umfang und Adressat dieser Verpflichtung herrscht seither Streit. Der vorliegende Beitrag versucht eine juristische Würdigung des Abkommens und empfiehlt für seine Umsetzung eine politische Einigung zwischen Bund und Ländern.