Issues relating to Agricultural Pricing Policies and their Analysis in Developing Countries

Agricultural pricing policies in developing countries are often the result of complex interactions between producer, consumer and merchant groups and their relative effectiveness in influencing government decision making. Even within governments, various ministries often have opposing views. In this environment one of the contributions a policy analyst can make is to attempt to quantify the effects of different policy options. This permits a more informed discussion which hopefully leads to better decision-making and an improved incentive environment. Many analyses of agricultural pricing policies have used the standard partial equilibrium analysis where no linkages between commodity markets were considered. In this paper we have considered cross-price effects. Also, we have discussed issues relating to other adjustments/refinements of the standard method so that a practitioner not familiar with the various methods can form an opinion of what the options are and what adjustments may be appropriate for a particular case in question. The adjustments relate to overvaluation of currencies, input price distortions, differences in the degree of distortions between producers and consumers, and variability of border prices. The inclusion of cross-price elasticities was important for assessing production, consumption and trade effects for Argentina, but for the other countries it resulted in only somewhat improved accuracy. The adjustment for exchange rates had a large impact in Egypt and was important for other countries as well. This underlines the importance of exchange rates as key variables for agricultural pricing policies in general. The numbers show that the traditional taxation policies of agricultural products in the sample of developing countries is somewhat less widespread than in the past. These policies, however, continue to favor consumers over producers, with significant losses for some of the latter. The large size of welfare losses, especially compared to efficiency losses, highlights the importance of correcting distorted prices that adversely affect the poorest sections of society. Also, the usual government objective of taxing producers to raise revenues is frequently defeated by the large subsidies provided to consumers. For the partitioner, for whom time is often of the essence, the assessment of welfare effects using the partial equilibrium method may provide reasonably good ‘first cut’ estimates of the order of magnitude of the impact of distortions. But often, these 'base case estimates' can and should be adjusted for a number of possible factors. The analyst needs to determine how important accurate estimates of key variables are to the policy makers; he or she then needs to compare the costs involved in generating or gathering the data and doing the calculations with the benefits of a broader and more accurate analysis of the distortionary effects of the particular case in question.     

Costs, Institutional Mobility Barriers, and Market Structure: Advertising Agencies as Multiproduct Firms

What accounts for the diversity and limited concentration that has long characterized the organization of the advertising agency industry? This question is addressed by treating an advertising agency as a multiproduct firm. The firm's product line or service mix is defined in terms of the set of different media categories where an agency places the advertising messages that it creates on behalf of its clients. Evidence is presented indicating that the structure of demand and costs in the advertising agency industry conforms to the conditions that MacDonald and Slivinski showed were required for an industry to sustain an equilibrium with diversified firms. Building on this framework, we formulate a set of three hypotheses relating to the realization of product-specific scale and scope economies. The first two hypotheses posit that given low fixed costs and minimal entry barriers, both media-specific scale and scope economies are available and can be exploited by relatively small-size agencies. The third hypothesis suggests that large agencies may experience diseconomies of scope as a consequence of excessive diversification induced by two pervasive industry institutional phenomena: (1) “bundling” of agency services to match client demand for a mix of media advertising, and (2) “conflict policy,” which prohibits an agency from serving competing accounts and operates as a mobility constraint. Utilizing a multiproduct cost function, we estimate media-specific scale and scope economies for a cross section of 401 U.S. agencies in 1987. The results obtained support the set of three hypotheses outlined above. The paper concludes with a discussion of the implications of these findings for the restructuring currently underway in this industry.     

Target costing,co-ordination and strategic cost management

During the last years issues of strategic management accounting have received widespread attention in the accounting literature. Yet the conceptual foundation of most proposals is not clear. This paper presents a theoretical analysis of one of the most prominent approaches of strategic management accounting, i.e. target costing. We analyse three distinct characteristics of this strategic management accounting tool, namely its market orientation, its use as co-ordination instrument and its interaction with other factors affecting long-term cost structure in the form of strategic learning. The analysis shows that the more ‘strategic’ dimensions are added to the problem of cost management, the less valid are ‘strategic’ management accounting proposals in terms of the usual way target costing is employed.     

Do Addicts Behave Rationally?

The theory of rational addiction assumes that addicts' behavior is fully rational. Common sense and psychological introspection suggest, however, that addictive behavior is irrational. Without knowledge of the addicts' preferences this dispute cannot be resolved. This paper reports the results of an experiment in which addictive preferences were induced. It turns out that ‘addicts’ consume systematically too much compared to the optimal consumption decision. We explain this systematic excess consumption in terms of the psychologically salient features of addictive goods.     

Customer relationship management and company performance—the mediating role of new product performance

Customer Relationship Management (CRM) is widely accepted as an effective approach for collecting, analyzing, and translating valuable customer information into managerial action. However, the potential of CRM has been investigated only in the context of existing products. CRM’s potential to aid in future new product development (NPD) has been neglected. We develop a conceptual framework in which multiple facets of CRM are linked to new product and company performance. We test this model based on a cross-functional sample consisting of 115 R&D and 122 Marketing managers from firms spanning multiple industries. The results provide evidence that CRM has a positive effect on new product performance and further, that this effect is moderated by CRM reward systems but not CRM technology. We also show that new product performance mediates the relationship between CRM and company performance. These findings have important implications for research and practice in both the CRM and NPD areas.     

Tumorpatienten – die Rolle der Angehörigen

Zusammenfasung  Belastungen, Bew?ltigungen, Ressourcen — Angeh?rige von Patienten werden im medizinischen Behandlungsprozess nicht selten als „St?rfaktoren“ wahrgenommen, die durch ihre Gegenwart, ihre Fragen und Anliegen den Arbeitsalltag „behindern“. Nur allzu schnell wird übersehen, welche gro?e Bedeutung sie bei der Betreuung der Patienten haben und wie hilfreich und unterstützend sie auch für das Pflegepersonal sein k?nnen – das gilt auch und besonders in der Onkologie.     

Unbounded liabilities,capital reserve requirements and the taxpayer put option

When firms access unbounded liability exposures and are granted limited liability, then an all equity firm holds a call option, whereby it receives a free option to put losses back to the taxpayers. We call this option the taxpayer put, where the strike is the negative of the level of reserve capital at stake in the firm. We contribute by (i) valuing this taxpayer put, and (ii) determining the level for reserve capital without a reference to ratings. Reserve capital levels are designed to mitigate the adverse incentives for unnecessary risk introduced by the taxpayer put at the firm level. In our approach, the level of reserve capital is set to make the aggregate risk of the firm externally acceptable, where the specific form of acceptability employed is positive expectation under a concave distortion of the cash flow distribution. It is observed that, in the presence of the taxpayer put, debt holders may not be relied upon to monitor risk as their interests are partially aligned with equity holders by participating in the taxpayer put. Furthermore, the taxpayer put leads to an equity pricing model associated with a market discipline that punishes perceived cash shortfalls.