Implications of Realization Uncertainty on Random Utility Models: The Case of Lottery Rationed Hunting

Conditional multinomial logit (MNL) models are often used to estimate the value of nonmarket resources under the assumption that consumer choices will be realized with certainty. The conditional MNL may not be appropriate when choices made may not be realized with certainty, such as when rationing mechanisms are used as a means of managing nonmarket resources. Two models that address this issue, developed by Boxall (1995) and Rouwendal (1989), are compared here to estimate welfare measures for moose hunting in Newfoundland. The results from these two models differ significantly from the results of a simple conditional MNL model .
Les modèles logit multinomiaux conditionnels (MNL) sont souvent utiliés pour calculer la valeur de ressources non marchandes, dans une hypothèse de départ voulant que les choir du consommateur sont assurés d'être réalisés. Ce genre de modèle peut toutefois ne pas convenir lorsque les choix fait ne sont pas assurés d'être pleinement réalisés, comme dans les cas où des mécanismes de rationnement sont imposés comme moyen de gérer ces ressources non marchandes. Nous comparons deux modèles conçus et mis au point, l'un par Boxall (1995), l'autre par Rouwendal (1989), pour estimer les mesures des effets socio-économiques d'une réglementation de la chasse de l'orignal a Terre-Neuve. Il apparaêt que ces deux modèles aboutissent à des résultats significativement différents de ceux obtenus par un modèle MNL conditionnet simple .     

Subscriber return, underpricing, and long-term performance of U.K. privatization initial public offers

This study distinguishes between issuer underpricing and subscriber returns, and estimates their magnitudes for U.K. privatization initial public offers (PIPOs). It proposes and tests empirical models which incorporate theoretical, institutional, and other factors which interact to explain subscriber returns and issuer underpricing. The estimates reveal that, on average, issuer underpricing, which is measured relative to the total equity market value on the first day of trading, is 23.62%, whereas the average raw return available to subscribers is up to 41%. Regression analysis shows that underwriters' commission, market volatility, regulatory situation of the company, proportion of share clawback, and demand for shares taken together explain up to 70% of the variation in issuer underpricing and 64% of subscribers' returns. The evaluation of the long-run performance of PIPOs to assess the extent to which initial gains to subscribers persist for longer periods concludes that U.K. PIPOs, on average, provide long-run holding gains to investors, unlike their private sector counterparts.     

THE DETERMINANTS AND DYNAMICS OF BID-ASK SPREADS ON THE LONDON STOCK EXCHANGE

We analyze the effect of various factors on the size of spreads on the London Stock Exchange since “Big Bang” and find that the price of a security, volume of transactions, risk associated with security returns, and degree of competition among market makers explain 91 percent of the cross-sectional variation in spreads. The results are consistent with the argument that the inside spread encompasses the order-processing, inventory-adjustment, and adverse-information cost of spreads. We also investigate the speed at which spreads move toward their normal levels after a temporary deviation. Although the speed of adjustment varies across firms, the cross-sectional median of 0.896 indicates it takes more than one period (day) for the adjustment to be completed. The volume of transactions and the degree of competition among market makers are the significant factors that affect the speed of correction in spreads toward their normal levels. This implies private information is incorporated more quickly into prices for stocks with greater competition and high trading volume.     

Planning and Performance of Small and Medium Enterprise Operators in a Country in Transition

This paper examines the relationship between planning and performance of small and medium enterprise operators in a country in economic transition. The literature on planning–performance relationship reports mixed findings. In a period of uncertainty, as exemplified by conditions of economic difficulties, one would expect firms to do more planning. On the contrary, our study shows that economic difficulties do not encourage firms to plan seriously. Our study also shows that firms that plan do not necessarily experience increased performance, with the exception of the manufacturing sector. Other findings of the study include a significant gender difference in the planning sophistication of small firms in Ghana, with firms managed or owned by males having sophisticated planning compared with female-managed or female-owned businesses. Size did not moderate planning performance in our study. Planning affected performance equally in both large and small firms in our study. We found no difference among the planning clusters for education. Firms with the highest growth in sales had low-planning sophistication. This study contributes to our understanding and appreciation of situations in which planning does not necessarily add significant value to organizations (by way of increased performance).     

Issuer-oriented underpricing costs in initial public offers: Evidence from Hong Kong

This paper estimates the underpricing cost associated with new shares issued and sold when firms go public in a traditional British-style IPO market in contrast to prior work which focussed on the underpricing cost to pre-IPO investors. Secondly, the estimates account for interest income on application funds received by issuing firms. Using data from the Hong Kong IPO market, the results show that the issuer underpricing cost of new share issues is on average only 14% of headline underpricing. When interest on application funds is taken into account, net issuer underpricing cost reduces to just around 7% of headline underpricing. This finding provides a compelling explanation of why issuing companies may not be concerned about underpricing in traditional British-style IPO markets. Thirdly, we also find that pre-IPO investors take steps to minimise wealth transfer to new investors either by selling a very small proportion or none of their pre-IPO shares. These findings suggest that explanations of IPO underpricing to the various parties involved in the process should, in part, be sought in the institutional structures and investment banking practices of the relevant primary capital market.     

Sensory characteristics of fufu prepared with cassava roots (Manihot esculenta Crantz) stored in polyethylene sacks

This study was carried out to assess the effect of storage of cassava roots in polyethylene sacks for periods of 2, 4, 6 and 8 weeks on the sensory characteristics of cassava fufu, a popular Ghanaian dish. Freshly harvested cassava roots were dipped in tap water and packed into polyethylene sacks in 2‐kg batches and stored at room temperature (25°C ± 1°C). Samples of fresh cassava fufu were evaluated and then at two weekly intervals for a period of 8 weeks. Attributes evaluated were colour, smell, elasticity, smoothness and taste. A structured six‐point ranking scale ranging from 6 (excellent) to 1 (very poor) was used for the evaluation. The data were analysed using analysis of variance, and the least significance difference test at P < 0.05 was used to determine differences between means. The results showed that storage of cassava roots for up to 8 weeks did not significantly affect the colour, smell, elasticity and taste of cassava fufu. However, smoothness of fufu prepared with cassava stored for 6 and 8 weeks was significantly different from the samples of the fresh cassava, and those stored for 2 and 4 weeks. It was concluded that cassava roots stored for periods up to 8 weeks in polyethylene sacks produced fufu of similar characteristics as fresh cassava fufu. This method is therefore recommended for use by homemakers, food service operators, cassava retailers and processors to save them time, energy and money used for the frequent trips for purchases. The method would also reduce post‐harvest losses to a large extent.     

New evidence on the impact of size and taxation on the seasonality of UK equity returns

The paper investigates the extent to which capital gains taxation and the portfolio rebalancing hypothesis may account for the seasonality of UK equity returns. The empirical results show that in small firm portfolios during the period of capital gains taxation, April but not January seasonality is consistent with the tax-loss selling hypothesis. The January seasonality, which is detected even before the introduction of capital gains taxation, is also consistent with the portfolio rebalancing hypothesis until the 1980s, when such seasonality becomes increasingly insignificant.     

Return predictability in African stock markets

This paper models weekly index returns adjusted for thin trading as a nonlinear autoregressive process with conditional heteroscedasticity to investigate the weak-form pricing efficiency of 11 African stock markets. Specifically, the use of the EGARCH-M model allows us to capture how conditional volatility affects the pricing process without imposing undue restrictions on the parameters of the conditional variance equation. On the basis of such a robust model, we are able to reject the evidence in prior studies that the Nigerian stock market is weak-form efficient. On the other hand, we confirm extant results that the markets in Egypt, Kenya, and Zimbabwe are efficient while that of South Africa is not weak-form efficient. We also generate new results, which point to the efficiency of the stock markets in Mauritius and Morocco, while the markets in Botswana, Ghana, Ivory Coast, and Swaziland are not consistent with weak-form efficiency.