ALCOHOL REGULATION AND DOMESTIC VIOLENCE TOWARDS CHILDREN

In recent years, economists have paid much attention to the demand for alcohol and the negative externalities associated with excessive drinking. Largely ignored in the literature is the link between alcohol use and domestic violence. Given the established positive relationship between alcohol consumption and acts of violence, the purpose of this paper is to examine the role that changes in the determinants of the demand for alcohol may play in reducing the incidence of violence aimed at children. Data on violence come from the 1976 Physical Violence in American Families survey. We estimate a model in which violent outcomes are affected by the state excise tax rate on beer; illegal drug prices, and other regulatory variables such as availability measures and laws restricting the advertising of alcohol. Results show that increasing the tax on beer can be an effective policy tool in reducing violence. Laws designed to make obtaining beer more difficult also may be effective in reducing violence, while restrictions on advertising and increases in illegal drug prices have no effects.     

ILLICIT DRUG USE, ABSENTEEISM, AND EARNINGS AT SIX U.S. WORKSITES

Considerable national attention has focused recently on the adverse consequences of illicit drug use. While several studies estimate the relationship between illicit drug use and wages, the findings are inconsistent. Surprisingly, some researchers identify a positive and statistically significant relationship between wages and drug use for young adults. Motivated by this counter-intuitive finding, this paper compiles unique data on employees at six worksites in order to explore the relationships among drug use, wages, and absenteeism. Using various measures of current and lifetime drug use and accounting for alcohol-use comorbidity, the authors find predominantly insignificant relationships (both direct and indirect) between drug use and both wages and absenteeism, regardless of gender.     

The Australian Accounting Role In Developing Assurance Services

Between March 1998 and March 1999, the Australian accounting bodies committed resources to a Research and Innovation Board (RIB) to develop new and emerging services for members to deliver to their clients. While it was active, RIB developed processes to identifi, select, develop and promote new services, in particular assurance services; monitored and contributed to international developments; and commenced a program of communication and change management within the profession. RIB was dismantled in March 1999 and each body is now adopting its own processes to develop sewices for members.     

Leverage Constraints and the International Transmission of Shocks

Recent macroeconomic experience has drawn attention to the importance of interdependence among countries through financial markets and institutions, independently of traditional trade linkages. This paper develops a model of the international transmission of shocks due to interdependent portfolio holdings among leverage‐constrained investors. In our model, without leverage constraints on investment, financial integration itself has no implication for international macro comovements. When leverage constraints bind, however, the presence of these constraints in combination with diversified portfolios introduces a powerful financial transmission channel that results in a positive comovement of production, independently of the size of international trade linkages. In addition, the paper shows that with binding leverage constraints, the type of financial integration is critical for international comovement. If international financial markets allow for trade only in noncontingent bonds, but not equities, then the international comovement of shocks is negative. Thus, with leverage constraints, moving from bond trade to equity trade reverses the sign of the international transmission of shocks.     

Changing Graph Use in Corporate Annual Reports: A Time‐Series Analysis

Graphs in corporate annual reports form part of a powerfully designed annual report package that offers considerable potential for “impression management.” The primary purpose of this paper is to determine whether graph use depends on corporate performance. Time‐series analysis, not previously used in the financial graphs literature, allows discretionary changes in graph use by companies to be identified and related to changes in individual companies' corporate performance over time. Based on the prior financial graphs and accounting choice literature, we develop two hypotheses that relate changes in graph use to changes in corporate performance. These hypotheses focus on the aggregate and individual company levels. We base our analysis on the corporate annual reports of 137 top UK companies that were in continued existence during the five‐year period from 1988 to 1992. At both the aggregate and individual company levels, we find the decision to use key financial variable (KFV) graphs, the primary graphical choice, to be associated positively with corporate performance measures. This finding is consistent with the manipulation hypothesis ‐ that is, that financial graphs in corporate annual reports are used to “manage” favorably the reader's impression of company performance, and hence that there is a reporting bias.