The FBT - Does It Matter Who Pays?

The fringe benefits tax (FBr) has been criticised for being levied on employers. This criticism is based on a confusion between who has the liability to pay the tax and who bears the burden of the tax. We show that the burden of a fringe benefit tax is independent of who pays it. Furthermore our analysis suggests that the burden of the FBT will fall mainly on upper income groups. We also discuss how the imposition of the FBT will change the optimal mix of fringe benefits supplied by employers, with some benefits being ‘cashed out’.     

A solution to an estimation problem involving models with rational expectations

Recently Flood and Garber (1980) have shown that the use of Fair's (1970) estimation technique in the context of a rational expectations errors in variables model yields inconsistent parameter estimates. In this paper we explain why this happens and suggest two consistent estimation procedures.     

The estimation of the impact of residential zoning on land values

Assuming that residential zoning places an upper limit on the ratio of capital to land, an appropriate econometric technique is suggested to estimate the effect of zoning on land välues.     

ASSESSING THE QUALITY ERROR IN OUTPUT MEASURES: THE CASE OF REFRIGERATORS*

This paper computes new indexes of output for refrigerators, using hedonic methods to adjust for quality change. The hedonic technique is applied in a new way (it is used to make quality adjustments to prices before they are used in the index), and the results are compared with those from methods used in previous hedonic investigations. There are three major findings. (1) Overall (1960–1972), our hedonic deflated output series rise more rapidly than conventional measures, because the price indexes used for deflation rise more slowly. (2) The output measures fluctuate more than do output measures produced by conventional methods, because adding hedonic quality adjustments to WPI indexes moves them up in some years and down in others, and the resulting adjustments to the output series were positively correlated with changes in output. (3) Applying methods used in previous studies produces larger adjustments to the published indexes, suggesting that some of the differences noted in previous studies between hedonic indexes and official published indexes are related to computational methods, not to quality adjustment.     

Regulation and financial disclosure: The impact of plain English

In October 1998, the SEC implemented a rule requiring firms to use plain English in their prospectus filings. In addition to the rule, the SEC encouraged the use of plain English in all filings and communication with shareholders. Did the SEC rule significantly impact managers’ disclosure style? And, more interestingly, did the SEC’s recommendations lead managers to change their disclosure style in filings not under the plain English mandate? Our textual analysis of Form 424, IPO prospectus, and 10-K filings over 1994–2009 finds that the SEC’s implementation of the plain English rule substantively impacted managerial behavior. When we focus on 10-K filings, we find that after the 1998 rule, firms are more likely to improve the stylistic components of their filing before an equity issuance and firms with better corporate governance policies are more likely to comply with the rule.     

Information and Transformation in Teaching Businesses Ethics

Teaching in business ethics has conformed to the dominant Western model of pedagogy whereby students are provided with information about ethics but rarely asked to analyse their own behaviour. There is no evidence that this approach has any practical impact on future behaviour and much reason to doubt its potential in this regard. The pedagogical traditions of India offer an alternative approach to ethical improvement – one based in self-reflection and personal transformation. The following paper considers the potential of this tradition and offers practical suggestions for its integration into Western teaching practice.     

Expanding Insights on the Diversity Climate–Performance Link: The Role of Workgroup Discrimination and Group Size

The present study extends knowledge of the performance consequences of workgroup diversity climate. Building upon Kopelman, Brief, and Guzzo's ( 1990 ) climate model of productivity, we introduce workgroup discrimination as a behavioral mediator that explains the positive effects of diversity climate on workgroup performance. In addition, we investigate group size as a moderator upon which this mediated relationship depends. We test these moderated‐mediated propositions using a split‐sample design and data from 248 military workgroups comprising 8,707 respondents. Findings from structural equation modeling reveal that diversity climate is consistently positively related to workgroup performance and that this relationship is mediated by discrimination. Results yield a pattern of moderated mediation, in that the indirect relationship between workgroup diversity climate (through perceptions of workgroup discrimination) and group performance was more pronounced in larger than in smaller workgroups. These results illustrate that discrimination and group size represent key factors in determining how a diversity climate is associated with group performance and, thus, have significant implications for research and practice. © 2014 Wiley Periodicals, Inc.