Concern with Immediate Consequences Magnifies the Impact of Compulsive Buying Tendencies on College Students' Credit Card Debt

This research examines whether temporal orientation moderates the impact of compulsive buying tendencies (CBT) on credit card debt. Participants completed the consideration of future consequences scale, a compulsive buying scale, and reported their credit card debt. Results revealed that CBT mediated the relationship between concern with immediate consequences and credit card debt, and high concern with immediate consequences magnified the impact of CBT on credit card debt. This suggests that compulsive buyers who focus on maximizing immediate consequences are at a much higher risk of building up significant amounts of credit card debt.     

Targeting Financial Management Training at Low‐Income Audiences

While interest in financial management training programs for low‐income persons has grown in recent years, the specific training needs of low‐income consumers have not been well articulated. This article describes needed training content for such audiences, based on review of previous research and the authors’ experiences in evaluating the Financial Links for Low‐Income People (FLLIP) program. We also illustrate how the choice of financial management training models can seriously impact the subgroups of the low‐income population who attend training, as well as the success of programs in recruiting and graduating participants. The implications of these findings both for financial management curriculum development and for the selection of program models are presented.     

Economies of Scale and Utilization: An Analysis of the Multi-Plant Generation Costs of the Electricity Commission of New South Wales, 1970/71–1984/85*

We examine the average costs of electricity generated in NSW at the site level employing a new simultaneous-equations model approach Further, we argue that costs depend principally on unit size and capacity utilization We reinterpret capacity utilization as a compositional variable which is a continuous proxy for the (inverse of) the intensity of demand for electricity, thus partially addressing the multi-product nature of electricity. Low capacity utilization corresponds to intense demands and hence peaking output We find that costs per kWh, as conventionally measured, are highly sensitive to the degree of capacity utilization but less so to unit size (scale). The results emphasize the need for tine-related pricing     

The Demand for Australian Rules Football*

Declining attendances at Australian Rules football games organized by the VFL recently have become the focus of much concern. An econometric analysis of the demand for football is presented, using annual average attendance data for the years 1950–86. It is found that increases in admission prices had a significant negative effect on demand, and increases in real income a positive impact. Amongst other variables of importance in explaining demand are lagged attendance and uncertainty of outcome. Elasticities of demand are calculated and it is shown how they might be used to predict attendance under different pricing scenarios.     

Real Options Models of the Firm,Capacity Overhang,and the Cross Section of Stock Returns

We use a stochastic frontier model to obtain a stock‐level estimate of the difference between a firm's installed production capacity and its optimal capacity. We show that this “capacity overhang” estimate relates significantly negatively to the cross section of stock returns, even when controlling for popular pricing factors. The negative relation persists among small and large stocks, stocks with more or less reversible investments, and in good and bad economic states. Capacity overhang helps explain momentum and profitability anomalies, but not value and investment anomalies. Our evidence supports real options models of the firm featuring valuable divestment options.     

SENIORITY SEATING AT THE ROYAL OPERA HOUSE

This paper examines lotteries and seniority queues as formsof commodity bundling price discrimination. There are good andbad seats, and two types of potential purchasers. Offered thechoice of a high-priced good seat and a moderately-priced bundleof good and bad seats, cutomers self-select into high and lowvaluation types. For single period purchases, the bundle isa lottery over good and bad seats. For repeated purchases, monopolistssuch as the Royal Opera House can do better by setting up aseniority allocation system.     

THE VALUE-RELEVANCE OF UK DIRTY SURPLUS ACCOUNTING FLOWS

Misgivings about dirty surplus accounting practices derive, in part, from two related concerns. Firstly, it has been argued that dirty surplus accounting might result in value-relevant items being reported within ‘dirty surplus flows’ rather than within earnings. Secondly, it has been suggested that the low transparency of dirty surplus flows might reduce investors' ability to recognize value-relevant items in a timely fashion. In this study, we address the first of these concerns. We examine UK stock returns and accounting flows accumulated over intervals of up to 20 years. We report evidence on the value-relevance of accounting flows which were excluded from ‘ordinary profit’ (i.e. accounting profit exclusive of extraordinary items) in the UK over the period from 1972 to 1992. Our tests provide strong evidence that UK ordinary profit is value-relevant and provide some evidence, on the basis of long-interval tests, that extraordinary items are value-relevant. There is little evidence that other flows excluded from ordinary profit are value-relevant, however. These finding may allay concerns that, by allowing value-relevant flows to bypass reported earnings, dirty surplus accounting practices have promoted undesirable ‘creative accounting’ activity by UK firms.