Arithmetic versus geometric mean estimators: Setting discount rates for capital budgeting

This paper addresses an issue central to the estimation of discount rates for capital budgeting: should the geometric mean or arithmetic mean of past data be used when estimating the discount rate? the use of the arithmetic mean ignores estimation error and serial correlation in returns. Unbiased discount factors have been derived that correct for both these effects. In all cases, the corrected discount rates are closer to the arithmetic than the geometric mean.     

Tourism and the Australian economy

Consideration of the economic significance of tourism requires synthesis of a discrete tourism ‘industry’ from selected sectors of the economy and identification of its component activities which may then be used to relate expenditure by tourists, sectorally and spatially, to other elements in the economy. This approach is applied to create a profile of the Australian tourism industry at a national level and shows that tourism contributes a significant proportion to GDP and employs at least 3% of the labour force. This is comparable with the UK and other developed countries.     

A multiplicative model for efficiency analysis

This paper develops theory and algorithms for a “multiplicative” Data Envelopment Analysis (DEA) model employing virtual outputs and inputs as does the CCR ratio method for efficiency analysis. The frontier production function results here are of piecewise log-linear rather than piecewise linear form.     

The integration of a logistical decision-making framework into nonprofit marketing

Marketing practitioners in for-profit-making settings are typically well acquainted with what logistical decisions can do for a marketing program and what marketing constraints can do to a logistics system. For the most part, however, the conceptual tansfer from a product-oriented firm to a service-producing organization has been lacking and obviously not made in non-profit marketing situations. This paper examines these areas and presents a creative expansion of the logistics decision-making area into nonprofit marketing. Hopefully, this setting will encourage others to investigate non-profit areas and, in particular, the interrelationships involved in the logistics area.     

Asymmetric Information and the Predictability of Real Estate Returns

This article examines the relation between systematic price changes and the heterogeneity of investors information sets in real estate asset markets. The empirical implications rely on a theoretical economy in which information asymmetry alters the dynamic relation between returns and trading volume. We employ a filter-rule methodology to determine predictability in returns and augment the return-based conditioning set with trading volume. The additional conditioning information is necessary since the model is underspecified when predictability is based on returns alone. Our results provide new insight into the coexistence of informational and noninformational exchange in the speculative markets for real estate assets. Specifically, we find that the predictability of real estate returns is generally more indicative of portfolio rebalancing effects than an adverse-selection problem. These results are unique in addressing the time-variation in information asymmetry.