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  • Articles  (6,693)
  • Blackwell Publishing Ltd
  • Cambridge University Press
  • Cell Press
  • 1995-1999  (4,823)
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  • 1925-1929
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  • Articles  (6,693)
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  • 1995-1999  (4,823)
  • 1980-1984  (1,870)
  • 1925-1929
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  • 1
    Electronic Resource
    Electronic Resource
    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: We consider the general problem of price discrimination with nonlinear pricing in an oligopoly setting where firms are spatially differentiated. We characterize the nature of optimal pricing schedules, which in turn depends importantly upon the type of private information the customer possesses–either horizontal uncertainty regarding brand preference or vertical uncertainty regarding quality preference. We show that as competition increases, the resulting quality distortions decrease, as well as price and quality dispersions. Additionally, we indicate conditions under which price discrimination may raise social welfare by increasing consumer surplus through encouraging greater entry.
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  • 2
    Electronic Resource
    Electronic Resource
    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: We model an internal labor market in which employee behavior and compensation are affected by the firm's financial position and the threat of hostile takeover or other exercise of shareholder “voice.” We show how good past performance can result in excessively generous promotion and pay decisions. While the threat of shareholder activism will remove this “slack,” activists optimally face a positive cost barrier, which in turn varies across firms. The cost barrier is higher when cooperation or “helping” between employees is more important, and is lower when employees receive efficiency wages due to an inability to “pay” for their jobs. Since the importance of helping is associated with pay compression and “flat” pay ladders, such firms should also exhibit a greater degree of management entrenchment.
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  • 3
    Electronic Resource
    Electronic Resource
    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: The literature on the incentives for R & D cooperation with spillovers typically deals only with the factors affecting cooperative profits. This paper focuses on the incentives to cheat and the stability of such cooperative agreements in a repeated game framework. It is shown that the stability of cooperation is influenced by the nature and magnitude of spillovers, relative to the nature and degree of product market competition. While cooperative profits are higher with large positive (exogenous, unintended) know-how spillovers, such as in fundamental research, our anslysis shows that it may be easier to sustain cooperation in areas with lower spillovers, such as applied research, because of the smaller incenfives to cheat on the initial agreement, at least when firms produce substitutes. Alternatively, the possibility of technology sharing (i.e., intended or endogenous spillovers), besides R&D coordination, not only increases cooperative profits but also reduces the incentives to defect from a cooperative equilibrium.
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  • 4
    Electronic Resource
    Electronic Resource
    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: In a moral hazard setting, we model the fact that the agent may get private signals about the final outcome of his effort before the public realization of this outcome. Actions affect both the distribution of the outcome and the quality of the agent's private information. We compare simple contracts, based on output only, with revelation contracts, based on output and messages about signals. Revelation contracts give the agent some discretionary power during the course of the relationship; they are optimal if and only if lowering effort does not increase the quality of private information in the sense of Blackwell (1953). In the context of managerial compensation schemes, the revelation contracts we analyze can be viewed as allowing the agent to exercise an option on the final profits before the realization of these profits. The theory thus provides an alternative justification of the widespread use of stock options in managerial compensation schemes, as opposed to compensation schemes that rely only on salary, bonus, and (restricted) stock plans.
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  • 5
    Electronic Resource
    Electronic Resource
    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
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  • 6
    Electronic Resource
    Electronic Resource
    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
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  • 7
    Electronic Resource
    Electronic Resource
    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: Analysis of seven wholesale and retail markets for long-distance telephone services since the AT & T divestiture indicates that service provider concentration declined in the later 1980s and then stabilized in the 2990–1993 period. In addition to this stability in market shares, a number of other conditions established since 1990 have been conducive to the development of market sharing rather than significant price competition. The most important of these conditions has been the tarifing process of the Federal Communications Commission by which MCI and Sprint replicate ATGT's price announcements. As market shares stabilized and became more equal, and as regulation formalized the price-setting process, the price-cost margins of the three large carriers increased and became more nearly identical. These results are consistent not with price competition but rather with emerging tacit collusion among AT&T, MCI, and Sprint.
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  • 8
    Electronic Resource
    Electronic Resource
    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: The Federal Communications Commission held its first auction of radio spectrum at the Nationwide Narrowband PCS Auction in July 1994. The simultaneous multiple-round auction, which lasted five days, was an ascending bid auction in which all licenses were offered simultaneously. This paper describes the auction rules and how bidders prepared for the auction. The full history of bidding is presented. Several questions for auction theory are discussed. In the end, the government collected $617 million for ten licenses. The auction was viewed by all as a huge success an excellent example of bringing economic theory to bear on practical problems of allocating scarce resources.
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  • 9
    Electronic Resource
    Electronic Resource
    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: This study examines the investment patterns of all large local exchange telephone companies in the United States over time. It identifies how different regulatoy environments have influenced the recent historical pattern of investment in modern infrastructure equipment. It focuses exclusively on the postdivestiture experience of local telephone exchange companies (LECs). It examines the growth of fiber-optic deployment and of complementary equipment associated with the modernization of today's information infrastructure. The study estimates the influence of different regulatory structures on infrastructure deployment by LECs. The study is unique in that if relates individual LEC investment patterns to LEC-specific regulatory, demographic, and economic characteristics. Thus, it isolates the contribution of state regulatory policies from that of other demographic and economic factors in the determination of infrastructure deployment at the state LEC rather than at the corporate level. Its main findings are as follows: First, price regulation (and, in particular, price caps) is a more potent regulatory mechanism than the standard earnings sharing scheme. Second, when associated with an earnings sharing scheme, price regulation is less effective in triggering infrastructure deployment than when it is implemented by itself. These results raise questions about the effectiveness of a popular regulatory instrument-earnings sharing schemes-and highlight the effectiveness of generic price-cap regulation. These results have implications for the design of regulatory policy at both the state and federal levels. In particular, given the importance currently being placed on the development of the information superhighway, regulatory emphasis should be focused more on price regulation than on regulating profits.
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  • 10
    Electronic Resource
    Electronic Resource
    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: The House and Senate of the United States Congress recently passed legislation that directs the FCC to establish a system for using auctions to allocate the use of radio spectrum for personal communications services. There is a unique and unprecedented set of issues that arise in this context, which are of interest to economists, industry analysts, regulators, and policymakers. We discuss these issues and evaluate their likely impact on the outcome of the spectrum auctions. In addition, we argue that there may be pitfalls in the auction procedure adopted by the FCC, and we discuss possible alternative procedures.
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  • 11
    Electronic Resource
    Electronic Resource
    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: Royalty payments from a franchisee to a franchisor serve as incentive for the franchisor to provide appropriate levels of quality and brand, name investment. However, since they also distort the service provided by the franchisee, we should expect relatively lower royalty rates in franchises that are primarily service-oriented. Casual examination of royalty rates across product-oriented and service-oriented franchises shows that the opposite is true, with service-type franchises enjoying higher royalty rates. We resolve this apparent puzzle. The basic argument we put forth is that in product-type franchises, a franchisor can charge a wholesale price on goods transferred to the franchisee, thus using an alternative instrument that also serves as an incentive for the franchisor. Moreover, in general, a franchisor will use both wholesale price and royalty to minimize distortions in retail price and service at the retail level. We then test the predictions of our model on different industries and find confirmation for the same.
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  • 12
    Electronic Resource
    Electronic Resource
    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: We examine the nature of incentive schemes between the principal and the risk-neutral agent in the presence of the agent's limited liability and ex ante action choice. We consider alternative schemes when a simple rental contract is infeasible due to the limited liability of the agent and study the effectiveness of a performance bonus scheme in achieving the first-best outcome. We also discuss some implications of such schemes in real practices.
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  • 13
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    Electronic Resource
    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: Recent theories of vertical integration based on incomplete contracts assume perfect competition on at least one side of the market. As a result, the make-or-buy choice has no redistributive effect and will reflect efficiency considerations only. This paper introduces imperfect competition into an otherwise standard model of a vertical relationship with noncontractable specific investments. We assume that there are a finite number of potential input suppliers with private information about their costs. We first show that a monopoly buyer of such inputs will often prefer to own the seller's assets even though it would be more efficient for the seller's assets not to be so owned. We then show that an increase in the number of potential partners on either side of the market reduces this inclination towards vertical integration. With perfect competition on either side of the market, the make-buy decision will reflect only efficiency considerations.
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  • 14
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    Electronic Resource
    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: This paper interprets private label marketing as a retailer instrument for overcoming the double-marginalization problem inherent in the distribution of well-known manufacturer brands. Retailers with some degree of market power carry private label substitutes for popular national brands in order to capture more profit from the vertical structures they share with brand manufacturers. The net effect of private label marketing is to improve the performance of distribution channels. After presenting a formal model and deriving analytical results, the paper gathers some empirical evidence that supports these results.
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  • 15
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    Electronic Resource
    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
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  • 16
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    Electronic Resource
    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: This paper studies the hypothesis that large firms have more bargaining power with suppliers than do small firms, using data from the cable television industry. Employing techniques from the “new empirical lo,” the effect of owner size on marginal costs is inferred from the effect of owner size on observable product market choices. In the cable industry, the downstream firms decide how many subscriptions of cable to sell and how many channels to offer in the cable package. lf large firms have lower costs than small firms, then large firms should be willing to supply more than small firms, at all prices. The effects of bargaining power are identified separately from the effects of scale economies by exploiting the structure of the cable industry. Scale economies, in the cable industry, are likely to stem from regional size, while bargaining power is likely to stem from national size. By controlling for regional size, estimates of the effect of owner national size on the willingness to supply cable subscriptions and to offer channels indicate that large downstream firms offer significantly more subscriptions and channels at all prices than do small downstream firms. These results provide some of the first systematic, industry-specific, evidence consistent with the bargaining-power hypothesis.
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  • 17
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    Electronic Resource
    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: The role of product warranty in segmentation of consumer durable product markets is highlighted. I demonstrate that consumer moral hazard and heterogeneity in product usage create variation in the valuation of product warranties by the different segments in the market. In this context, the firm, by offering a self-selecting menu of base warranty and extended warranties, satisfies the warranty demands of the various segments of the population. The consumer choice behavior prediction of the theory with regard to extended warranty is empirically validated with data from a survey of new car buyers.
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  • 18
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    Electronic Resource
    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: Research on durable goods has shown that because of a time inconsistency problem, a monopolist manufacturer prefers to rent rather than sell its product. We reexamine the relative profitability of renting versus selling from a marketing perspective. In particular, using a simple linear demand formulation, we assume a durable goods monopolist has to use downstream intermediaries to market its product. In contrast to the case of an integrated monopolist, we find that when the monopolist has to rely on intermediaries, then it prefers to go through an intermediary that sells rather than one that rents its product. Similarly, the intermediary that sells the product is more profitable than the intermediary that rents the product. However, if the monopolist can commit to a set of prices, then the intermediary that rents is more profitable than the intermediary that sells.
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  • 19
    Electronic Resource
    Electronic Resource
    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: Empirically validating and testing the specification of game theoretic models has received limited attention in the marketing literature. The authors provide an econometric framework for estimating the parameters of response functions when the observed data in the market place are the Nash equilibrium outcomes of an underlying dynamic duopoly game specification. Specifically, the estimation procedure accounts for the joint endogeneity of market shares and marketing efforts of market rivals using a system of simultaneous equations that included the market response function and the Nash equilibrium conditions. A formal statistical test is used to detect model misspecification. The empirical analysis is carried out using data from four product markets: pharmaceutical, soft drink, beer, and detergent. Comparisons are provided with conventional estimation of the response function parameters in which the equilibrium conditions are ignored in the estimation. Managerial implications of the empirical results are discussed.
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  • 20
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    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: Private information creates a cost of operating a hierarchy, which becomes larger as the hierarchical distance between the information source and the decision maker increases. When information about a firm's capabilities is dispersed among the individuals in the firm, production is inefficient even though everyone behaves rationally. Because hierarchies need rents in order to function, a firm with a long hierarchy may not be viable in a competitive industry.
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  • 21
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    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: A dynamic model of product rivalry is developed for a market in which firms choose price and advertising intensity. The model, a state-space game, is implemented using data that consist of weekly price, sales, and promotional activity for four brands of saltine crackers sold by four chains of grocery stores in a small town. A number of questions can be asked of this data. First, is advertising predatory (merely changing market shares) or cooperative (shifting out market demand)? Second, are price and advertising own and cross-strategic complements or substitutes? And finally, do investments in stocks of goodwill and in price reductions make firms tough and aggressive or soft and accommodating?
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  • 22
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    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: Why are moving sales a successful and widespread phenomenon? How can it be optimal for a seller to disclose her low valuation for the item to be sold? We propose an explanation based on the “lemons problem” in bargaining with asymmetric information about quality. Disclosing a low valuation signals that there are significant gains from trade, so that trade takes place when it wouldn't otherwise, and all agents are made better off.
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  • 23
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    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: I present tests of a competitive rationale for price promotions. In a model with a population of informed and uninformed customers, price competition yields a static equilibrium in which each seller draws a price from a specified density function. Price data on coffee and saltine crackers products are used to test whether the sample of prices on each product could have possibly come from the theoretically specified density function. The results suggest that some markets are indeed consistent with the marginal distributions of prices predicted by the model. Furthermore, in the process of testing this rationale for price promotions, estimates are obtained for the marginal cost of each product, the number of competing goods, and the percentage of informed consumers. The resulting excess variability of these estimates across competing brands can also raise questions with respect to the empirical validity of the model.
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  • 24
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    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: We investigate why different states in the United States choose different regulatory plans in their telecommunications industry. We present a simple theoretical model and an empirical analysis of the issue. We find that a state is more likely to replace rate-of-return regulation with incentive regulation when: (1) residential basic local service rates have historically been relatively high; (2) allowed earnings under rate-of-return regulation in the state have been either particularly high or particularly low; (3) the state's leaders tend to come from both major political parties, rather than from a single party; (4) the state's urban population is growing relatively rapidly; and (5) the bypass activity of competitors in the state is less pronounced.
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  • 25
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    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: After the initial breakthrough in the research phase of R&D, a new product undergoes a process of change, improvement, and adaptation to market conditions. We model the strategic behavior of firms in this development phase. We emphasize that a key dimension to this competition is the innovation that leads to product differentiation and quality improvement. In a duopoly model with a single adoption choice, we derive endogenously the level and diversity of product innovations. We demonstrate the existence of equilibria in which one firm enters early with a low-quality product while the other continues to develop the technology and eventually markets a high-quality good. In such an equilibrium, no monopoly rent is dissipated and the later innovator makes more profits. Incumbent firms may well be the early innovators, contrary to the predictions of the “incumbency inertia” hypothesis.
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  • 26
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    Oxford, UK : Blackwell Publishing Ltd
    Journal of economics & management strategy 4 (1995), S. 0 
    ISSN: 1530-9134
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: This paper addresses the strategic commitment value of various price and nonprice vertical contracts. Assuming contract offers are sufficiently public to have strategic importance, we focus on commitment as a necessary and separable condition to be met. The analysis has two components. First, considering the relationship between a monopolist manufacturer and his imperfectly competing retailers, enforcement conditions necessary for alternative vertical contracts to have commitment value are identified in the static (reputation-free) context. It is shown that external help (i.e., enforcement by nonsignatories) is necessary for bilateral minimum resale price maintenance (price floors) and exclusive territory contracts to have commitment value, whereas maximum resale price maintenance (price ceilings) do not require such help (i.e., they are internally enforcing). Second, the paper provides an analysis of the U.S. case law and discusses the empirical validity of the “external enforcement” assumption that is shown to underlie recent proposals to make certain vertical restraints illegal.
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  • 27
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    Oxford, UK : Blackwell Publishing Ltd
    Review of income and wealth 41 (1995), S. 0 
    ISSN: 1475-4991
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: Using longitudinal data, 1 estimate the impact of redistribution on the welfare cost of income risk in Germany and the United States. The estimates account fully for behavior because individuals in each country have responded optimally to that country's policy. The results indicate that the welfare cost of income risk is 5.4 percent of disposable income in Germany, 8.5 percent in the U.S. Redistribution has reduced these risks from their pre-tax, pre-transfer levels by 43 percent in Germany, 21 percent in the U.S. The political importance of income security is evident in both countries, as risk relief often eliminates the net burden of redistributive taxes among middle-class households. The conclusions are robust across several models of income expectations.
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  • 28
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    Oxford, UK : Blackwell Publishing Ltd
    Review of income and wealth 41 (1995), S. 0 
    ISSN: 1475-4991
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: The 1993 System of National Accounts is a remarkable document, but the System also has some major imbalances and omissions. The present paper spells out four aspects of the SNA that require further development: (1) accounting for the costs of economic change; (2) delineation of information as an economic commodity; (3) overhaul of the methodology underlying input-output accounts; and, (4) consequences of the System's implicit use of compacted accounting. These developments can be incorporated in a Supplementary Document in the near future. We need not wait 25 years.
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  • 29
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    Oxford, UK : Blackwell Publishing Ltd
    Review of income and wealth 41 (1995), S. 0 
    ISSN: 1475-4991
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: Economic Council of Canada, Employment in the Service SectorDelaunay, Jean-Claude, and Jean Gadrey, Services in Economic Thought: Three Centuries of DebateGriliches, Zvi (ed.), Output Measurement in the Service Sectors
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  • 30
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    Review of income and wealth 41 (1995), S. 0 
    ISSN: 1475-4991
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: On average, poverty and income inequality increased in Latin America during the 1980s. Forty-six percent of the increase in poverty took place in the cities of Brazil alone, though part of this reflects the migration of poor rural inhabitants to urban areas. There is strong evidence that both income inequality and poverty mirrored the economic cycle, rising during recession and falling during recovery. Economies that grew (e.g. Colombia, Costa Rica) performed better with respect to poverty and income inequality than those that stagnated. In particular, countries that failed to stabilize effectively (e.g. Brazil, Peru) experienced substantial increases in poverty. Educational attainment has the greatest correlation with both income inequality and the probability of being poor. From a policy standpoint, there is a clear association between the provision of education, lessening of income inequality, and poverty reduction.
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  • 31
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    Review of income and wealth 41 (1995), S. 0 
    ISSN: 1475-4991
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: Health problems and physical and mental impairments can restrict the kind and amount of work that individuals can perform. Several studies have estimated the loss in earnings experienced by disabled/health-limited workers, but they do not examine the trend in this loss over time. The authors propose an alternative indicator of productivity loss that is more appropriate for inter temporal comparisons: “lost earnings capability”–the difference between the amount of money persons could potentially earn if they were free of disability/health limitations and the amount of money that they can actually earn given their limitations. The estimates indicate that the mean lost earnings capability per disabled/health-limited person grew over the period from 1973 to 1988, while the population with disabilities/health limitations fell. In 1973, lost earnings capacity totaled about 5.3 percent of Gross National Product (GNP); by 1988, the loss had fallen to about 4.5 percent of GNP as a consequence of the reduction in the number of people with limitations. Data are from the Current Population Surveys and the Survey of Income and Program Participation.
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  • 32
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    Oxford, UK : Blackwell Publishing Ltd
    Review of income and wealth 41 (1995), S. 0 
    ISSN: 1475-4991
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: Review Article on Industrial Efficiency in Six Nations
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  • 33
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    Review of income and wealth 41 (1995), S. 0 
    ISSN: 1475-4991
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: From 1980 to 1990 Portugal experienced a generalized liberalization of economic activity, due in large part to its 1986 integration in the European Union. This paper studies the changes in the Portuguese distribution of household income and expenditure during this period, using micro-data on household budgets and applying recent developments in statistical inference for Lorenz curves. We find a significant increase in six measures of welfare and an unambiguous decrease in the inequality of the respective distributions. Different explanations for the findings of decreased inequality are discussed.
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    Notes: Richard Burkhauser and Dallas Salisbury (Eds.), Pensions in a Changing EconomyJohn Williamson and Fred Pampel, Old Age in Comparative Perspective
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    Notes: The calculation of purchasing power parities and quantity comparisons for a given year provides interesting information about the relative importance of countries. However, it is necessary to make these estimates annually in order to enable users to apply these parities for international comparison of annual data expressed in national currency. The paper deals with the problems related to merging spatial comparisons and temporal volume and price movements for the countries of the European Community. For these countries full information was collected in 1975 and in 1980, whereas in the intermediate years some price data were collected and price indices at a detailed level have also been collected. First the theoretical problems of consistency between the spatial results and temporal indices are discussed. Because no immediate consistency can be obtained, several methods are proposed to achieve consistency, by estimating one unique set of spatial and temporal indices. The available information for the period 1975-80 has been used in order to test the numerical differences between two sets of parities and price indices over time. Besides theoretical reasons for inconsistency, it is also necessary to take into account errors in the price observations or in the price indices. The results presented in the paper should be considered as provisional and further work will be undertaken to obtain better insights into the inconsistency between these sets of data.
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    Notes: To know the size and development of the hidden or underground economy is important for policy making, mainly because the measures undertaken may be misdirected if they are based on biased official statistics. The hidden economy can be measured by considering indicators. The direct methods are based on voluntary surveys and on tax auditing and other compliance methods. The indirect estimation methods rely on the identification of residuals with respect to income and expenditures, as well as in the labor and money markets. The strengths and weaknesses of each of these measurement approaches are discussed and the resulting estimates of the size of the hidden economy are compared. A different approach to measurement is to look at the determinants leading to the existence and growth of the hidden economy. Finally, the method of “unobserved variables” allows the combination of the two approaches by simultaneously considering the determinants and indicators of the under- ground economy. The results show a considerable range of sizes for a given country and year. Though there is a broad range of size estimates, there is general agreement that the hidden economy's size has been growing for all countries over recent decades. Further progress in quantitative knowledge about the hidden economy requires the development of a theoretical model which analyses the interdependencies between the official private sector, the hidden economy, and the public sector.
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    Notes: Using data from the Luxembourg Income Study, I study the sensitivity of cross-national income poverty comparisons to the method in which poverty is measured. Absolute poverty comparisons that keep the purchasing power at the poverty line constant across countries lead to conclusions that differ from relative poverty comparisons in which the real value of the poverty line varies with average income. The absolute poverty ranking of countries also varies as the real value of the poverty line is lowered. Cross-national differences in household characteristics are largely irrelevant in explaining poverty differences.
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    Notes: Using longitudinal data which include real estate wealth, financial assets as well as consumer durables, changes in the distribution of wealth in Sweden are related to major changes in asset prices and in incentives to hold various assets in the 1980s and the beginning of the 1990s. Our analysis of the mobility of wealth indicates that decile mobility is higher in Sweden than in the U.S., while the analysis of who is gaining and who is loosing shows results similar to those of previous studies.
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    Notes: We demonstrate that the criteria put forward by Atkinson and Bourguignon (1987) can be satisfactorily applied to the analysis of poverty even when the demographic composition of society and the definition of poverty change over time. We show that they provide both sufficient and necessary conditions for any robust conclusions concerning the changes in welfare and poverty. We apply these criteria to a set of data tracking annual income distribution movements in France from 1977 to 1994. The Atkinson and Bourguignon criteria posit that recent changes in poverty are a function of macroeconomic fluctuations in activity.
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    Notes: This study focuses on the role of foreign-born households in Canada's asset market. An empirical analysis of wealth accumulation is conducted for a large sample of Canadian households circa 1977–84. This study period reflects a change in Canada's immigration policy which resulted in immigration Rows switching from Europe to Asia. A life-cycle framework is used to examine wealth accumulation behaviour of the foreign-born vis-à-vis Canadian-born households. The empirical results confirm the existence of an inverted ‘U’-shaped wealth-age profile for both Canadian and immigrant households. However, the 1977 results show that the rate of wealth accumulation is higher for the immigrant household than the Canadian-born household in pre-retirement years, while the 1984 results reveal the opposite. After retirement, the rate of wealth dissipation is slower for Canadians than for foreign-born households. Only the 1984 results indicate that public social security wealth displaces household savings for both the Canadian-born and the foreign-born by a small amount. Finally, an immigrant household exhibits a stronger transfer motive within a family than a Canadian-born household regardless of year tested.
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    Notes: This paper investigates the importance of increases in the productivity of producing capital in estimates of the profit rate decline which occurred in the United States during the period 1950–90. We find that, when profit rate measures take into account the increasing productivity of producing capital stock (as measured by the embodied labor required to produce it), the observed decline is about one-half that found using conventional measures of profit. This finding has important implications for interest rate and investment policies.
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    Notes: At the first residential conference of the Institute for Fiscal Studies, which was held at St. Edmund Hall, Oxford, in September 1983, Mr Stewart Bates, QC, spoke on the implications of the decision of the House of Lords in the case of W. T. Ramsay Ltd v CIR. A report of those proceedings was held over until the decision of the House of Lords in the case of Furniss, v Dawson was known. The following report is based upon Mr Bates' address and the comments of Mr Stephen Oliver, QC, Mr John Avery Jones and Mr Adrian Shipwright who spoke at a lunchtime seminar convened by the IFS on 9 March 1984 to consider the decision in Furniss v Dawson. This report does not reflect the opinions of the IFS, which has no corporate views.
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    Notes: This paper discusses, and measures the quantitative impact of, a number of conceptual issues relating to the household saving rate data in the National Accounts of Japan. It finds that Japan's seemingly high household saving rate is biased due to the exclusion of capital transfers and real capital gains, the valuation of depreciation at historical cost rather than at replacement cost, the use of a residual measure of financial saving rather than Flow of Funds Accounts data thereon, and the treatment of expenditures on consumer durables as consumption rather than as saving, but that the biases are to a considerable extent mutually offsetting. It also finds that the Japan-U.S. gap in household (personal) saving rates is due largely to conceptual differences and deficiencies and that household saving in Japan consists primarily of financial saving (net lending), meaning that most of it is available to finance investment in other sectors of the economy and/or abroad.
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    Notes: The paper argues for the use of scanner data from EPOS systems for use in the compilation of consumer price indices. A number of methods of calculating micro-indices from such data are outlined. Scanner data for colour television sets in the U.K. are used as an example. The Tornqvist chained index is used as a benchmark against which alternative formulations, including those based on representative products, can be judged, the errors often being substantial. The paper argues for the use of scanner data, illustrates methods of compiling micro-indices and points to the potential for serious errors from conventional methods.
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    Notes: Recent economic research has suggested that Medicaid long-term insurance may reduce the personal savings levels of elderly citizens. This analysis shows that the opposite behavior, due to welfare aversion, actually happens. Barring any behavioral effects, personal wealth and income alone should determine the length of time an individual must stay in a nursing home until spend-down occurs. Wealth and income data from two different samples of the elderly are used to predict the distribution of time until spend-down, which is then compared with the actual distribution of the time until spend-down among residents of nursing homes. Contrary to expectations, it appears that the elderly receive transfers to avoid Medicaid eligibility. This result cannot be explained away by sample selection, demographics, or uncertainty about prices. One implication of this result is that Medicaid could expand eligibility by raising the asset limit without dramatically increasing expenditures or the number of residents who spend-down.
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    Notes: What are the implications of the historically observed economic policy instability in Latin American countries (LACs) for macroeconometric testing? Two pressing restrictions on the econometrician using time-series of LACs arise: time-varying parameters and time-varying specifications. Such an instability also has profound impacts on time-series measurements of national accounts at constant prices. This, together with the “second best methodology” used in LACs for computing real GNP, implies that LACs figures on GNP growth reflect growth in gross production rather than in value added. LACs time-series for private consumption are unreliable. Crucial data set constraints in LACs further complicate the task for the econometrician.
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    Notes: The purpose of this paper is to analyse income differences betweeen Catholic and Protestant families in Northern Ireland (NI) using Family Expenditure Survey micro-data. The paper's first conclusion is that there is much greater inequality within the Catholic and Protestant communities than there is between them. It's second conclusion, based upon econometric analysis of data for full-time employees, is that the lower mean income of Catholics, relative to Protestants, could be entirely explained in terms of different rates of reward attached to a given set of labour market characteristics.
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    Notes: Several economists have recently suggested that the national product should be adjusted for the value of environmental damages. In this paper we look at some of the difficulties one encounters when the correcting formulae derived from simple theoretical models are transferred to applied national accounting. In particular, the paper is concerned with the question of whether a corrected national income measure will actually provide relevant information for policy-makers.It is shown that a “green national product” will be very difficult to interpret. In general, it may not give any indications of the necessity of imposing stronger environmental policy actions. Nor does it indicate the hypothetical state of the economy after a change in environmental efforts.
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    Notes: Using data on regional money stocks, a variant of Fisher's (1911) quantity theory of money identity, and a technique first suggested by Doblin (1951) and Friedman (1961), this paper presents the first consistently-based estimates of real GDP in each of the seven British colonies of Australasia for the period 1861–1991. Examination of the historical pattern of growth in the regional economies of Australasia has not previously been undertaken, due in particular to the dearth of data on aggregate incomes for the colonies (later states) of Australia. The data calculated here reveal the historical pattern of the domination of New South Wales, Victoria and New Zealand in real Australasian GDP, and the shrinkage of the cross-sectional dispersion of real per capita GDP in the seven colonies over this 13 1-year period.
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    Notes: Income inequality is examined using the Panel Study of Income Dynamics and a consistent decomposition analysis. I only use inequality measures that satisfy the Principle of Transfers, have the property that a ceteris paribus increase in inequality within any subgroup increases overall inequality, and are independent of the scale of income and population. Decompositions are carried out by family size and by age of head for several definitions of income and income recipient. Whilst changing the time unit over which income is measured has a substantial impact on inequality, the effect of removing the between-age-group component of inequality is relatively slight.
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    Notes: This paper discusses Austria's experiences in connection with the 1980 round of the UN International Comparison Project, in which comparisons were first made within regions and the regions then linked. Austria played a dual role, as (a) the linking country between Group I (the European Community) and Group II (selected middle and eastern European countries), and (b) the base country for Group II. The paper consists of two principal parts. The first part reports, at the 3-digit commodity level, on the success achieved in finding comparable items, both within Group II and between Austria and Group I. The second part discusses a number of methodological problems that were encountered in carrying out the comparison. Chief among these was the treatment of social services that are marketed in some countries and provided free of charge or at nominal prices in others. Other questions touched upon include the treatment of output for own consumption, rents, drugs and medicines, and tourist expenditures.
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    Notes: Lack of a conceptual basis for measuring human capital investment in health has hampered efforts to expand national accounting systems to include human capital investment. This paper presents a conceptual basis for developing estimates of this health investment, an estimation methodology consistent with the conceptual basis, and preliminary estimates for the United States for 1952-78.While much work remains to be done before comprehensive estimates of investment in health are achieved, it is clear that previous estimates based on answers to the question, “What improves health?” have included some inappropriate expenditures while excluding others that should be included.The conceptual basis presented here leads to a methodology for separating health care costs (not the costs of illness) into maintenance and gross investment. Gross investment can be further separated into net investment and the sum of damages and depreciation but empirical implementation of this step is not attempted here.
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    Notes: This paper describes the construction of an accounting matrix for the world economy in 1977, cast along similar lines to SNA National Accounts, but one in which trade flows replace inter-industry flows as intermediate demand. The matrix distinguishes ten regions. Institutional accounts are presented for three of these, the European Community, North America and Japan. This matrix is used to provide the basis of a linear model in which average propensities to import and consume are replaced by estimated marginal propensities. Use is made of standard estimates of the income effects of terms of trade changes in order to distinguish substitution from income effects in the model, and a means is suggested for separating the full as well as the impact effects of a terms of trade change into income and substitution effects. The estimated import equations are used to derive estimates of regional growth rates compatible with external balance in each region. Multiplier matrices are calculated from the model showing regional interdependence of the world economy reflecting the pattern of trade which is identified in the marginal propensities to import.The effects of various aid policies are calculated using the model. It is shown that the cost of aid to any region is radically altered by taking into account the feedback effects of changes in demand. A policy of tied aid pursued by EEC, North America and Japan can actually lead to an improvement in Japan's balance of payments position. Finally the effects of movements in relative prices are illustrated by means of two examples.
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    Notes: In this paper, we present a new model of UK public finances which aims to shed light on recent problems of forecasting the PSBR. The main elements of public spending are treated as endogenous variables which rise in line with GDP over the medium term. Also, the cyclical response of public borrowing to rises in the level of economic activity is more muted when growth is export-led than when it is consumer-led. These two features go a long way towards explaining the rapid deterioration of public finances in the early 1990s and the slow pace of improvement since 1993. JEL classification: C53, E62, H62.
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    Notes: This paper considers the distributional effects of imposing additional excise duties on energy products according to carbon content. The assumed duties escalate from 1999 to 2010 and achieve levels reducing CO2 emissions by 10 per cent below baseline by 2010 for 11 EU member states. By 2010, real personal disposable incomes are 1.6 per cent above baseline and employment is 1.2 per cent above, assuming that the change is tax-revenue-neutral. The study concludes that the changes will be weakly regressive for nearly all the member states in the study if revenues are used to reduce employers’ taxes and strongly progressive if they are given back lump-sum to households. JEL classification: C53, D12, H22, Q48.
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  • 79
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    Fiscal studies 19 (1998), S. 0 
    ISSN: 1475-5890
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: Competition is being extended into residential utility markets world-wide; the European directives on telecoms, electricity and gas will extend choice throughout the European Union by the turn of the century. In the UK, the Privatisation Acts not only changed the ownership of utilities, but imposed a duty on the regulators to encourage competition. It is the introduction of competition, actual and potential, that has been the main force behind changing the relative prices charged to different consumers, particularly in the residential market. We use household-level data to identify the distributional impact, particularly on vulnerable households and those for whom regulators have special responsibilities. We find a mixed outcome, with some vulnerable households, especially pensioners, adversely affected: we suggest potential compensation mechanisms that could improve welfare by enabling the benefits of competition in these industries supplying essential services to be gained without harming the most vulnerable households. JEL classification: D40, 118.
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    Fiscal studies 19 (1998), S. 0 
    ISSN: 1475-5890
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: This article describes the methods used by the Treasury and other government departments for making forecasts of the public finances. A highly detailed approach is required because of the Treasury's budgetary role, but the aggregated results are subjected to careful ‘top-down’ checks. Forecasts have a necessary role in fiscal policy. But they are subject to large margins of error, and should be presented and used with caution. JEL classification: E6, H1, H6.
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  • 81
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    Fiscal studies 19 (1998), S. 0 
    ISSN: 1475-5890
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    Topics: Economics
    Notes: A recurring issue in indirect tax design — most obviously, but not only, for goods traditionally subject to heavy excises — is the appropriate balance between specific and ad valorem taxation. Recent work has developed new perspectives on the issue, which is also one of the oldest in the formal study of public finance. This paper provides a broadly non-technical account of the central considerations that arise in choosing the balance between specific and ad valorem taxation, reviewing and somewhat extending the lessons of theory and experience. There emerge clear presumptions as to the relative effects of the two kinds of tax on such attributes as price, profits, product quality and variety. But the socially optimal balance between them is likely to be quite sensitive to the characteristics of the market at issue. JEL classification: h21, H22.
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  • 82
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    Fiscal studies 19 (1998), S. 0 
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    Topics: Economics
    Notes: 〈blockFixed type="quotation"〉‘No-one ever got rich by passing up golden opportunities and that's exactly what a personal pension offers you. Why?Because one of the beauties of saving for your retirement is that the government actually gives you money — and lots of it — to encourage you … you get back every penny of the income tax you pay on the money you invest.’ Small print: ‘the value of the tax benefit depends on how much tax you pay’.Virgin advertisement, The Guardian, 17 September 1997.〈section xml:id="abs1-1"〉〈title type="main"〉AbstractGovernment support of private (occupational and personal) pensions through tax relief is an important element in the UK's retirement income system. However, the current tax relief system is regressive, lacks transparency and is difficult to control. This paper argues that it should be replaced by a cost-neutral matching-grant or tax-credit scheme. Such a scheme would embody the ‘partnership’ idea implicit in much government policy in this area, but would be much more progressive, more open and more accountable than existing arrangements. The argument is illustrated through a comparison of the cost and distributional impact of the current system with those of an alternative tax-credit scheme. JEL classification: H55.
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  • 83
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    Fiscal studies 19 (1998), S. 0 
    ISSN: 1475-5890
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    Topics: Economics
    Notes: This paper investigates the scope for housing wealth to alleviate poverty among Britain's older population by modelling the potential effect of equity-release schemes on the net incomes of older homeowners using data from the 1993–94 and 1994–95 Family Expenditure Surveys. We find that for the older population in general, the potential impact of equity release on poverty is limited by the positive association between homeownership and income in later life. The scope for equity release to enhance incomes is restricted mainly to the oldest age-groups where life expectancy is short. However, it is at these oldest ages that incomes are lowest and although we estimate that equity release cannot provide much benefit to those in the greatest poverty, the additions to income that equity release could bring to some of the oldest homeowners are not insignificant. JEL classification: D31, H55, 132, J14.
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  • 84
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    Fiscal studies 19 (1998), S. 0 
    ISSN: 1475-5890
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: This paper considers the magnitude of the human capital investment required to offset the increase in the inequality in labour earnings in the US economy since 1979. It considers the ineffectiveness of government training policies, the effectiveness of private sector training and the conflict between economic efficiency and the work ethic. It also considers revisions of the tax code. The importance of the distinction between the long view and the short view in analysing human resource policies is emphasised. JEL classification: J24, I28, H40.
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  • 85
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    Fiscal studies 19 (1998), S. 0 
    ISSN: 1475-5890
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    Topics: Economics
    Notes: This paper uses data from the two waves of the UK Retirement Survey to present a detailed descriptive analysis of the retirement behaviour of older men. The main motivation for doing this is the fall in the employment rates of older men over the last 20 years. A comparison of the labour market behaviour of men with and without an occupational pension suggests that increases in the coverage and levels of occupational pensions may not be enough to explain the long-term trends in labour market behaviour, but that there are important differences in the retirement experiences of the two groups. JEL classification: J26.
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  • 86
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    Fiscal studies 19 (1998), S. 0 
    ISSN: 1475-5890
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    Topics: Economics
    Notes: Expectations regarding the future state of the public finances are vital for public policy formation. The UK experience has been that forecast of the PSBR have been beset with problems since the mid-1980s. Independent assessments of the accuracy and plausibility of public finance forecasts are an important check on government forecasts and serve to increase public debate over government finance issues. We examine the success of various possible methods available to those outside government. JEL classification: E6, H1, H6.
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  • 87
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    Review of income and wealth 41 (1995), S. 0 
    ISSN: 1475-4991
    Source: Blackwell Publishing Journal Backfiles 1879-2005
    Topics: Economics
    Notes: Using a good inequality index, and data on personal income and cost-of-living estimates for the period 1981–90, interstate inequality in “nominal” and “real” personal income per capita is compared. Four points are noted. First, inequality in real income is smaller than that in nominal income. Second, while the nominal-income inequality shows the well-known increase over the 1980s, real-income inequality declined during the period. Third, inequality patterns in the wage and the non-wage components of income are somewhat different. Last, even the nominal-income inequality indicates a decline in the early 1990s.
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  • 88
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    Review of income and wealth 41 (1995), S. 0 
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    Topics: Economics
    Notes: This study presents a series of matrices of the capital stock disaggregated both by branch of origin and by branch of destination for the years 1985 to 1988 for Italy. The tables, whose dimensions are 23 × 23, were constructed using the perpetual inventory method and are based on disaggregated time series of gross capital formation provided by Istat (Italian Statistical Institute). The tables refer to both gross and net capital (with straight-line depreciation) and have been tested on alternative hypotheses for the average expected service lives of capital goods and their survival functions.
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  • 89
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    Review of income and wealth 41 (1995), S. 0 
    ISSN: 1475-4991
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    Topics: Economics
    Notes: This paper presents some estimates of international trade in banking services. We use IMF data on assets and liabilities of both domestic banks and non-banks with foreign banks, and of foreigners with the domestic banking system to construct measures of the volume of transactions on which banking intermediation services are provided across national borders. We then use estimates of the spread between borrowing and lending rates for depositors and borrowers with the financial institutions involved to estimate the value of international flows of intermediation services. Estimates are presented for 1982–84 and 1991–93 for the U.S., the U.K., and Canada.
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  • 90
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    Review of income and wealth 41 (1995), S. 0 
    ISSN: 1475-4991
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    Topics: Economics
    Notes: In this paper, we define environmental protection (EP) activities in the context of an input-output (I-O) framework. The U.S. I-O table is adjusted to separate inputs purchased by various economic sectors to abate pollution. We use I-O concepts and the I-O matrix adjusted for EP activities to derive a matrix of inputs to EP activities, which is independent of the matrix of inputs to traditional economic activities. This matrix is the basis for deriving measures of the economic importance of EP activities, including the size of EP activities relative to GNP and direct employment and indirect employment attributable to EP activities.
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  • 91
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    Review of income and wealth 41 (1995), S. 0 
    ISSN: 1475-4991
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    Topics: Economics
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  • 92
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    Review of income and wealth 41 (1995), S. 0 
    ISSN: 1475-4991
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    Topics: Economics
    Notes: This paper presents results of an examination of poverty in Poland in the 1980s. The individual welfare measure is expenditure on consumption per equivalent adult. Household equivalence scales are estimated using a quasi-exact scales trans logarithmic model. Four poverty indices are calculated. These are intended to capture the following aspects of poverty: (1) incidence, (2) relative deprivation, acid (3) social ability to eliminate poverty by income transfers. The study revealed significant changes in poverty during the investigated period, from 9 to 30 percent with persistent poverty resulting for pensioners, farmers and low educated persons.
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  • 93
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    Review of income and wealth 41 (1995), S. 0 
    ISSN: 1475-4991
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    Topics: Economics
    Notes: We provide an alternative axiomatization of Sen's (1976) poverty measure. We derive the measure from the general definition of a poverty measure by using a version of Sen's rank order axiom, and a substantially weaker form of his normalization axiom. These two axioms, together with a continuity axiom, lead uniquely to the measure suggested by Sen (1976).
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  • 94
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    Review of income and wealth 30 (1984), S. 0 
    ISSN: 1475-4991
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    Topics: Economics
    Notes: This paper compares the growth accounting approaches to aggregate productivity measurement and analysis of three major researchers: E. F. Denison, D. W. Jorgenson, and J. W. Kendrick. The investigetors are compared in terms of their treatment of a number of crucial elements, including measurement of output and of capital and labor inputs (including composition or quality changes), total factor productivity growth, economies of scale, and intensity of demand (for output). Judged by the standard of the neoclassical economic theory of production-the only generally accepted basis for input aggregation-Denison departs significantly from the production theory framework in his measurement of output and capital input, Kendrick to some degree in his measure of capital input, and Jorgenson not at all. The effects of these departures are illustrated with reference to the recent productivity slowdown. The probable near-term future utility of growth accounting methods for productivity analysis is assessed, and some related econometric modeling issues are noted.
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  • 95
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    Review of income and wealth 30 (1984), S. 0 
    ISSN: 1475-4991
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    Topics: Economics
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  • 96
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    Review of income and wealth 30 (1984), S. 0 
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    Topics: Economics
    Notes: This article reviews the problems involved in updating the results of international comparisons, in terms of an analytic framework focusing upon the sources of differences between various forms of extrapolation and direct comparisons. The factors identified as important are conservation of prices of the base period and weight inconsistency. The reliability of updating is undoubtedly affected by the length of the period over which the data are extrapolated. A program of regular benchmark comparisons at approximately five-year intervals with updating for the intervening years is attractive, since it permits checking by forward and backward interpolation. Where there are large deviations, however, averaging is not an acceptable solution.
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  • 97
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    Review of income and wealth 30 (1984), S. 0 
    ISSN: 1475-4991
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    Topics: Economics
    Notes: Index number accuracy is affected by formula specification and sampling error. The authors argue that an index formula should be “ideal” and “exact” (with reference to the range of economically plausible aggregator functions) to be economically justified. These indices are invariant in the homothetic case, as well as in certain non-homothetic scenarios. Empirically, based on foreign trade data for Egypt from 1885-1961, the set of economically justified indices are virtually identical, supporting the theoretical argument that “instrumental error” or “formula variance” should be a negligible factor contributing to index number error. In a discussion of sampling error, on the other hand, the authors criticize earlier work and propose an upper and lower bound. Using the same data, these limits imply that sampling error may be a serious problem for many indices.
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  • 98
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    Review of income and wealth 30 (1984), S. 0 
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    Topics: Economics
    Notes: The United Nations (SNA) and the Canadian (CSNA) Systems of National Accounts treat interest as a factor return to capital. The difficulties arising from the use of this concept cast doubt upon the basic premise. For example if the usual method of measuring value added by the summation of primary inputs is applied to industries mainly engaged in the lending of money, the results show negative production. This has led to the necessity of imputing bank interest in order to avoid negative income originating in the banking industry. Arguments are being put forward to extend this practice to certain other financial non-bank areas as well to offset the negative product emerging with increasing frequency as a result of higher levels of interest transactions.The proposed alternative is based on the contention that interest paid and received for the borrowing and lending of money should be treated in the same manner as the purchase and sale of other services. For the production accounts, for example, this would mean that interest paid by business would be treated as an intermediate expense of the paying industry and as revenue of the receiving industry. The adoption of this approach would therefore eliminate the need for the imputation of banking services and clear up the ambiguities encountered in treating interest on the public and consumer debt, issues which are also not unrelated to the present treatment of interest.
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  • 99
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    Review of income and wealth 30 (1984), S. 0 
    ISSN: 1475-4991
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    Topics: Economics
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  • 100
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    Review of income and wealth 30 (1984), S. 0 
    ISSN: 1475-4991
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    Topics: Economics
    Notes: The present investigation is the first attempt to calculate gross capital stocks for 19 industries which together cover the whole Austrian economy. A production-oriented concept of capital formed the basis of the investigation; the estimation procedure follows that of C. Almon et al. In contrast to the traditional perpetual-inventory methods, Almon's modified estimation technique combines the advantages of differentiated cumulation containing a logistical retention function with relatively moderate requirements with respect to investment data. A thorough description of this estimation technique is given in the third section of the paper, combined with a number of comparative model calculations. These demonstrate very clearly that capital stock figures calculated according to the Almon method rarely deviate from those found with the help of the traditional inventory method, which requires considerably more information and uses more complicated calculation procedures. Finally, the sectorally disaggregated capital stock estimates calculated according to the Almon method are presented with some interpretative remarks.
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