How industrial salespeople gain customer trust

This study investigated how industrial salespeople gain the trust of their customers. Results show that trust increases as the customer gains the impression that the salesperson is dependable, honest, competent, customer oriented, and likeable. Based on the results, a general model of trust building is suggested.     

Measures used to evaluate industrial marketing activities

Given the importance of controlling marketing efforts, a study was conducted of industrial manufacturers to determine the extent of their use of various measures to evaluate different marketing activities. The predominate measures used for evaluation were sales volume with much less utilization of profitability, productivity, and expense measures.     

On the use of profit data to estimate the social cost of monopoly power in an oligopoly

Relatively high estimates of the welfare cost of monopoly power in U.S. manufacturing industries have been obtained by economists who use the Lerner equation to estimate this welfare cost from profit data. These Lerner equation loss estimates are appropriate for a monopoly with constant costs and linear demand. But if the industry is an oligopoly in a Nash-Cournot equilibrium, the Lerner equation loss estimates can be more than twice as large as the actual welfare gain that would result from the elimination of monopoly power. Partial and general equilibrium examples are presented to illustrate the nature of these estimation errors.     

Firms' acquisition decisions and Tobin's q ratio

We develop the hypothesis that Tobin's q ratio signals favorable opportunities for a firm to make acquisitions and then undertake an empirical test of this hypothesis within the context of a more general “multicausal” model. The results of this test support our hypothesis. The empirical study is also notable in that our data consists of a representative sample of large manufacturing firms (selection to the sample is not conditional upon merger activity) and the time period covered (1971–1978) postdates the conglomerate merger boom era of the 1960s.     

The medical expense deduction and income levels: Progressive or regressive?

The medical expense deduction (MED) allows taxpayers to deduct from taxable income a proportion of their out-of-pocket medical insurance and health care expenses. Because the rate of subsidy is equal to the marginal tax rate previous studies have found MED to be a regressive tax mechanism biased toward benefiting higher-income taxpayers. The authors demonstrate, using GINI coefficients, that MED makes the tax structure more progressive than it would otherwise be and increases equality of after-tax incomes.     

Estimates of the cost of equity for public utilities, 1961–1976

Using a simple version of the dividend cash flow (DCF) model of stock valuation, the cost of equity for public utilities is often inferred to be equal to the sum of the dividend yield and the expected rate of growth in dividends. Witnesses who employ this approach generally extrapolate past growth patterns into the future and then assume that investors expect these trends to continue; no effort is made to actually assess the expectations of investors. This approach to estimating the cost of equity for public utilities is criticized for the failure to develop testable hypotheses as an inferential basis for testing the statistical reliability of estimates of the cost of equity. This article demonstrates an alternative to the traditional approach, based on the premise that reliable estimates of the cost of equity are derived only within a methodological framework that produces testable hypotheses. The Gordon model of share valuation is formulated in such a way as to show that there is a systematic and predictable relationship between the ratio of market price to book value of common stock and a firm's normal or expected return on equity. This relationship suggests an econometric model that not only tests the Gordon model of share valuation but produces at the same time, inferences concerning the cost of equity. Using this approach, year-end estimates of the cost of equity for electric utilities are determined for the 16-yr period from 1961 to 1976.