A Framework for Setting Retirement Savings Goals

The purpose of this paper is to develop a framework for calculating savings needed to meet retirement goals under a variety of alternative assumptions about the economic and institutional environment. A “base case” that incorporates a zero real rate of interest serves as a starting point; next, differences resulting from a positive interest rate are examined. The analysis is further modified to take into account the effects of inflation, the role of Individual Retirement Accounts (IRAs), and possible future changes in tax laws. Throughout, the goal is to evaluate how best to plan for a smooth, regular consumption level before and after retirement and to adjust savings programs for changes in one's situation or expectations. The framework provided herein is expected to be useful to consumer educators and financial counselors concerned with helping individuals to meet their retirement goals.     

The Local Consumer Information System: An Institution-To-Be?

This paper makes the case for the creation, testing and perfection of a new economic institution–a local consumer information system. The heart of the system would be a data bank to which the consumer could address questions and receive answers repeatedly regarding the local market. The purpose of the system would be to deliver relevant consumer information more efficiently. For the individual consumer this new institution would help identify his best buy variety of a product, quickly and at low cost. It would also tell him, again quickly and at low cost, from what local retailers and at what local prices this best buy variety might be purchased. This new institution would serve all consumers in a given community by lowering many prices, quality constant. By reproducing itself in different locales, as the product testing organizations have, it might be expected to multiply and serve consumers in many communities. The paper discusses the types of information to be provided, methods of information collection and dissemination, means of insuring accuracy and fairness and how it might be financed.     

The Evolution of Consolidated Financial Reporting in Australia

This paper reviews the history of financial reporting by corporate groups in Australia, and in particular, the States of New South Wales and Victoria. Changes in Statutory and Stock Exchange rules governing consolidated reporting are described and the financial reporting practices of Australian holding companies between 1930 and 1962 are surveyed. The evidence indicates that (a) while the practice was not widespread, some Australian holding companies supplemented their financial statements with consolidated financial statements prior to the incorporation of such a requirement in either legislation or Stock Exchange listing requirements; (b) the influence of Stock Exchanges on the evolution of this practice is somewhat less than that previously attributed to it; and (c) the rapid spread of this form of reporting in an essentially unregulated environment (N.S. W.) coincided with the development of a market for public debt securities.     

The Effects of Inflation and Taxes on the Costs of Home Ownership

This article assesses the impact of inflation on the true economic costs of owning a home. Using the assumption that most pre-tax housing costs are roughly proportionate to house value, it is shown that inflation cuts housing costs substantially for homeowners with mortgages because capital gains income from house price inflation is untaxed but mortgage interest payments are fully deductible. The distribution of tax savings are estimated with national data and it is found that roughly half of all benefits go to families in the top one seventh of the income distribution.     

Early-Life Outdoor Experiences and an Individual's Environmental Attitudes

This study investigated the effects of early-life experiences on an individual's environmental beliefs. Data from a survey of 533 university undergraduate students from 20 areas of academic study were analyzed using sequential regression to determine the degree to which current environmental beliefs could be explained by early childhood experiences. Results showed that four of the seven independent variables (appreciative outdoor activities, consumptive outdoor activities, media exposure, and witnessing negative environmental events) explained 14% of the variance in the eco-centric/anthropocentric beliefs. Three of the independent variables (early-life participation in mechanized outdoor activities, education, and involvement with organizations) were not significant predictors of eco-centric/anthropocentric beliefs. Implications for research and practice were discussed.     

Public Choice and Accounting Standard Setting in New Zealand: An Exploratory Study

Recent studies in accounting regulation have used either the capture argument or the pluralistic notion to describe the enactment of accounting regulations. This paper explores the nature of the impact of public choice in accounting standard setting in New Zealand using the pluralistic notion. To provide an insight into the standard-setting process, this paper involves an examination of the establishment, withdrawal and re-establishment of New Zealand's most controversial standard after current cost accounting — the standard on investment property accounting (SSAP 17). The investigation considers the nature of public choice in the agenda entrance, demand and supply factors influencing standard setting in New Zealand. The results indicate that the New Zealand accounting standard-setting process is pluralistic in a limited way. Like most other English-speaking countries, the scope of participation for certain groups has been institutionalized on the supply side by way of membership of standard-setting committees of the New Zealand Society of Accountants. On the demand side, however, consumers of accounting have been provided with only limited scope for participating in the formal process of standard setting. Nevertheless, other means (i.e., exogenous and informal ones) may be used to influence the process. Overall, from both the demand and supply perspectives of regulation, the Big-8 accounting firms (as they were previously known) followed by the preparers of financial statements, seem to have greater participatory capacity in the New Zealand standard-setting process.     

Taxpayers' Prepayment Positions and Tax Return Preparation Fees*

Individuals who have their tax returns professionally prepared often overpay estimated income taxes, effectively giving the government an interest‐free loan. To understand why tax professionals may place their clients in positive prepayment positions, we draw on mental accounting theory. Mental accounting theory suggests that by placing taxpayers in positive prepayment positions, tax professionals induce a favorable mental representation of tax return preparation fees, perhaps allowing them to collect larger fractions of billable time and costs incurred on taxpayers' behalves. Thus, we hypothesize that tax return preparation fees are higher for taxpayers in positive prepayment positions than for taxpayers in negative prepayment positions. Regression results using tax return data for 68,736 taxpayers provide strong support for this hypothesis. To more fully understand the general nature of the relationship between taxpayers' prepayment positions and tax return preparation fees, we adapt the prospect theory value function to the tax domain and formulate three additional hypotheses. Consistent with theory, regression results indicate that the relation between taxpayers' prepayment positions and tax return preparation fees is (1) positive, (2) stronger for taxpayers who receive refunds that are less than fees than it is for taxpayers who receive refunds that are greater than fees, and (3) stronger for taxpayers in negative prepayment positions than for taxpayers in positive prepayment positions.