State lotteries and externalities to their participants

The degree of participation in state lotteries can either increase or decrease expected returns. It is theoretically possible for unfair bets to become more than fair as participation in lotteries changes. In addition, the purchase of every combination of numbers can be more than a fair bet and such a purchase may increase the expected return to other lottery players.     

Avoid meetings or make them work

How often have you been forced to neglect your real work in order to attend a meeting at which the irrelevant—even absurd—points seem to go on, and on, and on, and on, and.…     

Privatisation: Let the Market Decide

Is the Government privatising efficiently? Is it floating the shares in nationalised industry economically? Will British Telecom be under-priced? Professor Davis and Roger Buckland have studied the privatisation issues of shares over five years and found large but avoidable losses. They argue that the Government's marketing technique could be improved by making less use of the large financial institutions and more use of competitive tenders.     

The monetary base or M1? results from a small macromodel

This article investigates the issue of whether M1 or the monetary base should be used as an intermediate target for monetary policy. Because the target variable should be reliably related to future economic activity, each aggregate is used in estimating a small macromodel which consists of a nominal GNP growth equation and an inflation specification. The empirical results indicate that M1 better explains GNP growth and inflation for the period 1960–1980. Forecast errors of GNP growth from 1970–1980 are reduced when M1 is used instead of the adjusted base, although there is little difference between inflation forecasts. Based on the evidence presented in this study, M1 is preferred as the intermediate target variable.     

Determinants of bank merger premiums

This study examines the merger premiums paid for a sample of 320 bank acquisitions consummated during the period January 1982 through October 1990. The results of the research indicate that higher merger premiums were paid for, (a) smaller size targets, (b) targets with higher return on common equity ratios (pre-merger), (c) targets with higher leverage as measured by the percentage of primary capital to total capital, (d) targets in a different state than the bidder, and (e) transactions carried out through exchange of stock as opposed to a cash purchase.     

Decomposing hospital productivity changes, 1985–1988: A nonparametric Malmquist approach

Annual data on U.S. hospitals from 1985–1988 are evaluated by ownership type—profit, nonprofit, state and local government, and U.S. Department of Veterans Affairs (VA)—for changes in hospital productivity over time. Distance functions are used to measure Malmquist indices of productivity change, which are then decomposed into indices of efficiency change and technology change. In contrast to previous studies using this approach, we allow for variable returns to scale and use both input and output orientations. We find that changes in technology dominate changes in inefficiency in determining changes in productivity.     

GAINS TO BIDDER FIRMS IN CASH AND SECURITIES TRANSACTIONS

This paper presents empirical test results of alternative hypotheses regarding differences in returns to shareholders of bidding firms that choose different payment methods (cash or securities). The evidence is consistent with the payment method signaling hypothesis, which asserts that when management of the bidding firm believes its own stock to be overvalued (undervalued), securities (cash) will be the preferred payment method. The results are not consistent with either the overpayment hypothesis or the present value/hubris hypothesis. The findings also explain the conflicting results reported in prior work on gains to bidding firms.