The Union Relative Wage Effect for Academic Librarians

This note investigates the impact of labor unions on the starting salaries of academic librarians. Using data collected from members of the Association of Research Libraries (ARL) and employing standard ordinary least squares (OLS) and seemingly unrelated regressions techniques, the union relative wage gap was estimated annually over the 1989–1998 time period. Three important results were found. First, unionized academic librarians received a positive and significant union wage premium throughout most of the decade studied. Second, this wage premium declined in magnitude over time following the trend in the economy as a whole. Lastly, by the end of the sample period, the wage effect had disappeared and was no longer significantly different from zero.     

Experimental Test of a Q-Sort Procedure for Prioritizing R&D Projects

Abstract— In this study, fifteen managers and scientists experimented with the use of a Q-sort procedure for evaluating and prioritizing thirteen research projects. Q-sorting is a psychometric method for classifying items according to the opinions of a group of persons, and for evoking group consensus on these classifications. The procedure focuses on the rather natural individual opinion/group decision making process that must take place in project selection/evaluation. In general, the participants thought that Q-sorting was too imprecise to yield final decisions. However, progress was made toward organizational consensus, and the participants felt the procedure was valuable for facilitating scientist/scientist and the scientist-manager communications within the project evaluation process. It was therefore concluded that Q-sorting may be a valuable aid to the heuristic idea-exchange process that should accompany any formal project selection exercise. The results here suggest that Q-sorting may be a good procedure to facilitate the use of a mathematical project selection model.     

Debt-for-Equity Swaps under a Rational Expectations Equilibrium

This paper analyzes LDC debt-for-equity swaps under a rational expectations equilibrium. Under full information, the swap can never be strictly preferred by the LDC, the MNC, and the bank. Under the postulated informational asymmetry assumptions the same results obtain, leading to the “lemons” market in reverse. Under rational expectations, the swap can only occur if the loan is correctly valued relative to all private information in the economy. Given that some swaps do occur, future models must reflect the unique features of swaps.     

Regression-Based Tests of the Market Pricing of Accounting Numbers: The Mishkin Test and Ordinary Least Squares

The test developed in Mishkin [1983] (hereafter, MT) is widely used to test the rational pricing of accounting numbers. However, contrary to the perception in the accounting literature, the exclusion of variables from the MT's forecasting and pricing equations leads to an omitted variables problem that affects inferences about the rational pricing of accounting variables. Only if the omitted variables are rationally priced is their exclusion irrelevant. Failure to recognize this issue leads accounting researchers to employ the MT without appreciating how omitted variables affect the inferences they draw. We demonstrate that when additional explanatory variables are included in the MT, the rational pricing of accruals is not rejected. That is, the accrual anomaly documented in Sloan [1996] vanishes when additional explanatory variables are incorporated into the MT. We also show that in accounting research settings, where samples are large, ordinary least squares (OLS) is equivalent to the MT. As a result, accounting researchers should consider using OLS or be more explicit about the exact advantages of the MT over OLS in their research setting.