Sustainable Asset Growth and the Accounting Rate of Return in Not–For–Profit Organizations: Theory and Evidence

Parties needing to monitor the financial performance of not–for–profit (NFP) organizations have traditionally relied upon financial ratios of accounting data. This practice can lead to misleading inferences about profitability in relation to organizational needs, since accounting rates of return are potentially poor proxies for economic rates of return. In this paper we show how to compensate for the imprecision of the accounting rate of return through the use of a simple interpretive rule based on the finding that accounting and economic rates of return are on the same side of the growth rate. According to our rule, the accounting rate of return must exceed the asset growth rate in order to sustain growth with internally–generated cash flow. Logistic regressions are used to test the rule's ability to predict sustainable asset growth in a sample of NFP hospitals. The findings not only validate the rule, but also show that the rule exploits all usable information contained in the accounting rate of return     

Agricultural policy adjustments in the Korean rice economy

A political preference function is used to endogenize government actions in a simultaneous equation model for South Korean rice policy. The effects of economic changes on rice pricing decisions through estimated political weights are tested to improve our understanding of policy adjustments in that country and open the way for further research in East Asia.     

A simple continuous measure of credit risk

This paper introduces a simple parameterization for the risk-neutral default probability distributions for risky firms that are easily computed from quoted bond prices. The corresponding expected times to default have a particularly simple form and are proposed as a measure for credit risk. Being continuous in nature, times to default provide a much finer measure of risk than those provided by ratings agencies. Comparison with the ratings provided by Moody's and the distance to default measures calculated using the Merton [Merton, R. (1974). On the pricing of corporate debt: the risk structure of interest rates. Journal of Finance, 2(2), 449-470] model shows that the highest rank correlation is found between the proposed time to default measure and Moody's ratings.     

Downsizing an Agricultural Field Experiment Alters Economic Results: A Case Study

Downsizing the replications of an agricultural experiment altered profit and utility rankings of different cropping systems less than cutting the duration of the experiment. However, failing to plant all crops in a rotation each year altered economic rankings the most. Estimates of system profit variability, and associated economic rankings, were especially sensitive to downsizing experiment length and to failing to plant all crops in a rotation annually. Despite the scientific importance of long full-rotation experiments, short run publication pressures favoring "new data" and methodological innovations might discourage such rich experiments.     

Private versus public production of information

This paper re-examines a recent article by Grossman and Stiglitz (1980) where information production is shown to be fundamentally incompatible with decentralized market systems. Based upon their model, public production of information is discussed as a natural alternative. Three main implications of the analysis are: (i) the market can be informationally efficient with public production of information, (ii) there exists an informational equilibrium and the resulting allocation is Pareto efficient, and (iii) although the optimal level of information critically depends upon information users' preferences and endowments, their complete knowledge t the societal level is not necessary for public production of information.     

The utilization of capital and the growth of output in a developing economy: The case of South Korean manufacturing

This paper presents the utilization rate of capital equipment in the S. Korean manufacturing industry during 1962–1971. The aggregate utilization rate is shown to have increased at an annual rate of about 8%. The level of utilization in S. Korea is found to be generally lower even in 1971 than in the U.S. in 1962, both at the aggregate and sectoral levels. The rise in the utilization rate is shown to have contributed nearly as much as investment has in the growth of manufacturing output. The influence of the residual component declines from 36% to 8% of the recorded growth of output when the increase in the utilization rate is properly allowed for.     

The influence of college students' shopping orientations and gender differences on online information searches and purchase behaviours

Using the data collected from a survey of 1277 US college students, this study investigated college students' shopping orientations, and examined the relationships between their shopping orientations and searches for information about and purchases of apparel products online and the differences between male and female students in their shopping orientations, online information searches and purchase experiences. Seven shopping orientation constructs were identified: shopping enjoyment, brand/fashion consciousness, price consciousness, shopping confidence, convenience/time consciousness, in‐home shopping tendency and brand/store loyalty. Results showed that participants' shopping orientations were significantly related to their searches for information about and purchases of apparel items online. In addition, male and female participants showed significant differences in their shopping orientations, online information searches and purchase experiences. This study provided suggestions for apparel e‐tailors to develop effective marketing strategies to reach their target market, for consumer educators and for educators in the retail merchandizing area to prepare their students for future careers.     

Online shoppers' response to price comparison sites

Customers' perceptions of price differ in the online environment due to the presence of price comparison sites. The purpose of this study is to examine how price comparison sites affect price and value perceptions of online shoppers across different product types and price consciousness levels of online shoppers. The results of the study indicate that the price information provided by an online price comparison site influences online shoppers' perceptions of internal reference prices. However, the influence of a price comparison site on value perception differs according to product type. As evidenced by the significant interaction effect between product type and price comparison site information, the presence of price comparison sites increases both transaction and acquisition value perceptions for the non-look-and-feel product category (e.g., notebook computers), but not for the look-and-feel product category (e.g., jeans). Contrary to the expectation, online shoppers' price consciousness influences their price and value perceptions independently of price comparison site information.     

Understanding Conflicting Interests of a Government and a Tobacco Manufacturer: A Game-Theoretic Approach

Rice is the staple food of nearly half of the population of the world, most of whom live in developing countries. Ensuring a domestic supply of rice from outside sources is difficult for developing countries as less than 5% of the total world’s production is available for international trade. Hence, in order to ensure domestic food security, e.g., food availability and access, governments provide subsidies in agriculture. In many occasions, public money used for the subsidy goes toward promoting undesirable crops like tobacco. Although the strategic interaction between governments and manufacturers is critical, it has not been studied in the literature. This study fills this gap by considering a game between a government (of a developing country) and a tobacco manufacturer in which the government decides on a mix of subsidies and the tobacco manufacturer decides on declaring a purchasing price of tobacco. We provide a numerical study to show that controlling the output harvest price is more effective in reaching the desired end result for both the government and the tobacco manufacturer. A subsidy in fertilizer results in the measurable increase in the government spending but does not have significant effect in reaching the production target. The fertilizer subsidy should be provided only when the output price is too high to be affordable for the population.