Cost‐effective regulation of nonpoint emissions from pastoral agriculture: a stochastic analysis

Nutrient emissions from pastoral agriculture are a global cause of declining water quality. Their management is complicated through variability arising from climate and soil influences. This paper compares the implications of input‐based policies and direct restrictions on leaching to achieve 10 and 20 per cent reductions in nitrogen (N) load, in the context of pasture‐based New Zealand dairy farms. The most important mitigation practices on these farms are de‐intensification (involving reductions in N fertiliser application and stocking rate) and the application of nitrification inhibitors. A stylised conceptual model, incorporating both sources of variability, is used to identify the implications of alternative policies. Direct restriction of estimated N leaching is the most cost‐effective policy to reduce N leaching by 10 and 20 per cent. These results indicate the general insufficiency of input‐based mechanisms for water quality improvement, given the low correlation between input use and leaching, possible substitution with unrestricted inputs and their failure to motivate the use of mitigation strategies. Additionally, model output indicates that inherent variability in water quality, mainly due to climate influences, can dominate the benefits of regulatory action in any given year.     

Cost‐effective strategies to mitigate multiple pollutants in an agricultural catchment in North Central Victoria,Australia

Strategies to reduce phosphorus and sediment yields are identified for two Australian catchments using a nonlinear optimisation model. This provides novel insight into the cost‐effective management of dual pollutants of water courses in Australia. A strong degree of complementarity between the two pollutants is highlighted, given the adsorption of phosphorus to sediment that augments the value of gully and streambank management for mitigation. However, the relationship between the two pollutants is asymmetric. A 30 per cent reduction in phosphorus yield achieves a 75 per cent reduction in sediment yield in one catchment, while a 30 per cent reduction in sediment yield achieves only a 12 per cent reduction in phosphorus yield. Sediment abatement costs are low given the efficiency of gully and streambank management. A 30 per cent phosphorus reduction lowers profit by 3–7 per cent, while a 30 per cent sediment reduction lowers profit by around 1 per cent. Land‐use optimisation requires spatial heterogeneity in land‐use and gully/streambank management responses. Overall, this research demonstrates the need to determine whether one pollutant is more important than another, while recognising the potential that mitigation practices possess for the reduction of multiple emissions during their evaluation.     

Will ERM entry make British companies more competitive?

In the wake of Britain's entry into the ERM, this article looks at the consequences for British exporters' competitiveness. Outlining the changing macroeconomic pressures which will ensue and the policies of exporters in the past, we suggest the practical steps companies will need to take to gain advantage from the new environment as well as to mitigate the impact of a less forgiving exchange rate regime.     

The London Business School with Gower Publishing

The Budget embodies many of the recommendations that we have put forward over the last year -on personal savings and the appropriate stance of macroeconomic policy - but a void remains on the key issue of ERM entry. With inflation set to rise above 9 per cent in the short term, there is a danger that an inflation l sterling depreciation cycle becomes entrenched. In fiscal terms, the Budget was broadly neutral and the Chancellor con- firmed that the strategy is to rely on high interest rates to support the exchange rate and tame inflation. This year, with base rates of 15 per cent, we expect the pound to remain reasonably stable but in 1991-2, as interest rates fall -which they are bound to ahead of the election -the pound could well come under pressure, so putting the government's inflation objectives at risk. ERM entry would provide the obvious support and is consistent with the Treasury forecast. Without it, inflation is unlikely to fall below 5 per cent next year.     

AUDITOR INDEPENDENCE,AUDIT QUALIFICATIONS AND THE PROVISION OF NON-AUDIT SERVICES: A NOTE

This paper presents the results of a study designed to investigate the question of whether there is the potential for an appearance of auditor independence impairment when higher levels of non-audit services are provided to audit clients. This question was investigated by analysing the audit reports for a sample of publicly listed companies over the period 1980 to 1989. The results of the analysis indicate that the auditors of companies not receiving an audit qualification of any type over the period derived a significantly higher proportion of their remuneration from non-audit services fees than the auditors of companies receiving at least one audit qualification. This result is driven by the non-Top 100 companies in the research sample. These findings could suggest that auditors are less likely to qualify a given company's financial statements when higher levels of non-audit services fees are derived. This could convey the view that the independence of the auditors of these companies may have been compromised.     

The UK and European Monetary Union: Why we should not stand aside

Ahead of next year's IGC David Currie considers the case for European monetary Union. He argues overall that EMU is desirable, though political arguments dominate the economic ones, which are finely balanced. he also argues that the UK should participate if other member states proceed to EMU, because of the dangers of marginalisation in Europe and of reduced attractiveness as a location for inward investment.     

Medicaid managed care: effects on children's Medicaid coverage and utilization

We use data from the National Health Interview Surveys (NHIS) to measure the effects of the growth of Medicaid managed care on children. We examine both the probability that individual children were Medicaid-covered and their utilization of care. We find that managed care penetration has significant effects on the composition of the Medicaid caseload: Young children are less likely to be covered, while poor school-age children are more likely to be covered. When we examine coverage by race, we find that black children are less likely to be covered where Medicaid managed care organizations (MMCOs) are more prevalent. These lower Medicaid enrollment rates are linked to increases in the numbers of young children who go without any doctor visits in a year. These results suggest that it is important to examine the potential effects of changes in Medicaid on selection into the Medicaid program, rather than focusing exclusively on the effects of managed care on those who are enrolled. In addition, among those enrolled in Medicaid, higher managed care penetration is associated with an increase in the number of black children with chronic conditions who go without doctor visits, but with decreases in the number of Hispanic children and poor teens who go without care.     

Revitalising Group Accounting: Improving Accountability

This article questions conventional consolidation accounting's effectiveness as a governance mechanism. Disclosure of the aggregate financial outcomes of a set of related business entities is of commercial importance. Currently that information is disseminated through financial statements underpinned by assumptions contradicting fundamental principles of corporate law and contestable propositions of commercial fact. Corporate accountability could be improved if the traditional approach to consolidation accounting were supplanted by reporting on an individual company basis, with assets marked to market, augmented with a statistical annexure of assets and liabilities of all related entities and a related companies' cross-claims matrix. Recent revelations related to Enron's collapse reinforce the need for improved corporate group accountability mechanisms.