Separability in farm-household economics: an experiment with linear programming

The assumption of separability between farm-household production and consumption facilitates analysis, but entails several important restrictions. The implications of assuming separability are discussed here in relation to the modelling of a representative Tongan farm-household. Econometric estimation of household demand is coupled with a linear programming (LP) model of farm-household production. When analysing consumer demand, separable farm-household economics is undoubtedly preferable to ignoring the production/consumption linkages entirely. However, the restrictions which must be imposed on the production side of the separable model are such that a realistic LP solution is unlikely to be obtained. This is likely to be a major deterrent to adopting the separable approach for studies in which the main focus is on production rather than consumption.     

A RE-EXAMINATION OF THE RELATIONSHIP BETWEEN CLOSED-END FUND DISCOUNTS AND EXPENSES

In this paper the role of expenses in explaining closed-end fund discounts is re-examined. A present value model is developed to illustrate the relationship between expenses and discounts. Earlier studies find that discounts are not related to management fees. In this paper, using a larger sample over a longer and different period and a better specification of the expense variable consistent with the model developed, discounts are found to be significantly related to expenses. The relationship between expenses and discounts holds in the presence of other control variables.     

Free cash flow, debt-monitoring and managers' LIFO/FIFO policy choice

This paper explores the explanatory power of Jensen's free cash flow hypothesis in managers' choice of LIFO versus FIFO. The association between FCF, and choice of inventory methods is based on the assumption that there is a potential conflict of interest between managers and shareholders when LIFO is the tax minimization method and that non-value-maximizing managers of firms with the FCF problem have incentives to choose FIFO, an income increasing method, in order to increase their compensation. However, since debt can act as a monitoring device and mitigate the agency problems of FCF, managers of firms with high FCF and high debt are less likely to choose FIFO than managers of firms with high FCF and low debt. The evidence is consistent with this expectation.     

Squatting as a transition problem in South Africa

This paper applies principles of transition to land tenure and squatting in South Africa. Political transition in South Africa reassigned political property rights, which produced contestable, and rent‐seeking incentives for squatting as a means to privatize land and redistribute wealth. Government failure to establish and protect private property rights in a squatter camp resulted in common‐pool problems that resisted private and public resolution with consequent rent dissipation and social loss. In response to this retreat from duty, informal agents emerged to claim their own share of the prize. Without enforceable rules of capture, the growth of squatter camps in South Africa will continue. JEL classification: D7, H8, K1, K4, R1, R4.     

The Economic Benefits of Australian University Degrees: Bachelor and Research Higher Degrees

The investment in Australian bachelor and research degrees results in significant economic benefits for the individual and for society.