The prevalence of overweight and obesity has reached epidemic proportions in the United States. Nearly two-thirds of adult Americans are overweight or obese, and the prevalence of overweight among American children between the ages of 6 and 19 has tripled during the past 20 years, from 5 percent in 1980 to 15 percent in 2000. United States Surgeon General Richard Carmona calls obesity America's single biggest health problem. The evidence for the relationship between obesity and several chronic illnesses is becoming increasingly clear. Although changing behavior is difficult, growing recognition of the health impact and costs associated with overweight and obesity, combined with increased knowledge regarding effective prevention and treatment interventions, provide momentum for addressing this epidemic. However, reversing current trends will require a multifaceted public health approach.
Myriad genetic, social, and environmental factors contribute to overweight and obesity. The rapid increase in their rates in the United States, however, suggest that social and environmental influences have played the major role in contributing to the nation’s overweight and obesity problem. In particular, recent social and environmental trends that have likely affected weight levels include: decreased physical activity in daily lives, increased use of commercial food products, larger commercial food portions, and increasing prevalence of community design that does not support physical activity. Furthermore, a relationship between obesity and low socioeconomic status has long been documented.
The default free short term interest rate is one of the most commonly researched economic variables. It directly influences the short end of the term structure and, thus, has implications for valuing fixed income securities and derivatives. Furthermore, it is a general reference point for asset pricing on the basis that expected equilibrium returns on risky assets are expressed in terms of excess returns relative to the risk free rate.
Earnings management has become a topic of enormous interest to academics, practitioners, regulators, and the financial press in recent years. Executives are often said to face incentives to undertake earnings management on behalf of their firms, either in the form of accruals manipulations or by undertaking real activities in order to try to achieve earnings benchmarks. Most of the extant academic literature links these incentives for earnings management, directly or indirectly, to explicit contracts. By contrast, a recent survey of executives by Graham, Harvey and Rajgopal (2005) documents that more than three quarters of respondents consider upward mobility in the labor market to be more important than short-run compensation benefits in driving earnings management decisions.
This disconnect between the contract-based motivations underlying most prior academic studies and practitioners’ own representations of the considerations driving their behavior leads us to investigate the role of non-contractual career stage incentives over earnings management. We hypothesize and find that younger managers are less opportunistic in both accruals manipulations and in undertaking real activities to achieve earnings management objectives. Our results are robust across alternative empirical proxies for career stage and to controlling for other known factors affecting earnings management, including proxies for direct compensation-based incentives over earnings. Overall, our study provides evidence in support of the notion that non-contractual career stage concerns impact executives’ earnings management behavior.
