Should a household buy a home? Using data from 16 developed countries spanning 1870 to 2020, this study provides a resounding affirmative answer. Contrary to popular expert advice, homeownership enhances life cycle wealth by up to 9% and welfare by up to 23%, compared to all-equity investment strategy. Homeownership reduces wealth portfolio risk and improves wealth equality, though it comes at the cost of lower working-life wealth and curtailed financial asset holdings. Gains are heterogeneous: Low-income (high-income) households gain more in wealth (welfare), and home purchase during periods of moderately low interest rates and high housing prices maximizes these benefits.

Using labor skill demand disclosed in job postings as a proxy for firms' growth strategies, we find that similar growth strategies increase the likelihood of two firms merging. In particular, a firm is more likely to become a target as its labor skill demand becomes more similar to that of its potential acquirer. Similar growth strategies ameliorate post-merger integration challenges in facilitating merger deals. Following the merger, the combined firm continues hiring the same skills, consistent with the growth strategy persisting. These types of mergers experience more synergies and superior operating performance.

We use multi-class machine learning classifiers to identify the stocks that outperform or underperform other stocks. The resulting long-short portfolios achieve annual Sharpe ratios of 1.67 (value-weighted) and 3.35 (equal-weighted), with annual alphas ranging from 29% to 48%. These results persist after controlling for machine learning regressions and remain robust among large-cap stocks. Machine uncertainty, as measured by predicted probabilities, impairs the prediction performance. Stocks with higher machine uncertainty experience lower returns, particularly when human proxies of information uncertainty align with machine uncertainty. Consistent with the literature, such an effect is driven by the past underperformers.

The SEC has limited resources that it can dedicate to investigating firms. Which type of firm is the SEC more likely to suspect of potential wrongdoing? We show that firms receiving a “red flag” for misconduct (e.g. comment letters, restatements, whistleblower reports) are less likely to experience an SEC investigation if they have a large fraction of women directors. These firms are also less likely to experience enforcement by the SEC. We address endogeneity by showing that these results are particularly pronounced when the US government changes to a Democratic administration (which we show is more focused on board gender diversity) from a Republican administration. Results are particularly large among smaller firms for which public information is more limited, and thus, the potential for bias is larger. Our findings imply that regulators' decisions on whether to open an investigation, and the outcomes of these investigations, are influenced by regulators' biases and beliefs on how each gender (of directors) carries out its role.

Using hand-collected data on founder CEOs and SEC investigations obtained via the Freedom of Information Act, we find that founder-CEO firms are 29% more likely to face SEC investigations, yet these investigations rarely lead to accounting and auditing release enforcement actions. CEO attributes—power, risk-taking, and visibility—drive this heightened scrutiny, reflecting the SEC's use of academically motivated variables and fraud-deterrent strategies. These findings align with the SEC's focus on CEO accountability and highlight the role of CEO characteristics in shaping regulatory oversight.

This paper investigates whether and how short sellers influence the U.S. Securities and Exchange Commission's (SEC) decision to initiate investigations. We find that higher short interest is significantly associated with an increased likelihood of SEC investigations, suggesting that the SEC relies on short sellers as information intermediaries in its enforcement process. Further analyses reveal that this relation is more pronounced when the SEC's fraud detection capacity is constrained or when firm-level information uncertainty is high. The SEC's reliance on short sellers extends to the issuance of comment letters, highlighting the short seller's broader influence on regulatory oversight. Our results are robust to instrumental variable estimation (Kaporff and Lou, 2010) and Oster's (2019) test for omitted variable bias. Taken together, our results underscore the critical role that informed market participants, particularly short sellers, can play in shaping regulatory attention.

Campbell and Shiller (1988b, a) show thatTherefore, if payout growth is not predictable, the payout-price ratio decides returns and the returns must be predictable. Using 150-year data from 16 developed countries across bond, equity, and housing markets, I study this implication using the payout-price ratios, i.e., coupon price, dividend price, and rent price. None of the 48 country-asset combinations shows consistent in-sample and out-of-sample performance with positive utility gain for the mean-variance investor. However, 14 (5) countries have predictable payout growth in the equity (housing) markets. Cochrane (2008, 2011, 2020) argues that the dividend predictability and the return predictability form a joint hypothesis, and the denial of time series predictability does not hold if we reject the hypothesis that the dividend growth is predictable. Contrary to Cochrane's finding, the VAR simulation using data from all the countries in the past 150 years does not reject the null that the dividend growth is predictable and thus the joint hypothesis test provides weak support to return predictability.