Not enough money or not enough time to satisfy the Thrifty Food Plan? A cost difference approach for estimating a money–time threshold

Food production at home requires money and time. Food assistance programs focus exclusively on the money cost, while ignoring the time cost. This one-dimensional focus could undermine the effectiveness of food assistance programs. In the spirit of Vickery (1977), this paper uses a cost difference approach to develop a money–time threshold, and several related metrics, to determine whether money or time is the most limiting resource in reaching the Thrifty Food Plan (TFP) target. In our empirical analysis we find that when time is ignored, single headed households spend on average 35% more than required to meet the TFP target. However, when time is included, these households spend on average 40% less than required to meet the TFP target. In addition, we find that when time is ignored, 62% of single headed households on average spend enough money to reach the TFP target, but when time is included, only 13% of single headed households spend enough on average to reach the TFP target. Our empirical results suggest that time is more constraining than money in reaching the TFP target. These results imply that metrics solely focusing on money could severely underestimate the gap between actual expenditures and those required to reach the TFP target.     

Predictive density construction and accuracy testing with multiple possibly misspecified diffusion models

This paper develops tests for comparing the accuracy of predictive densities derived from (possibly misspecified) diffusion models. In particular, we first outline a simple simulation-based framework for constructing predictive densities for one-factor and stochastic volatility models. We then construct tests that are in the spirit of Diebold and Mariano (1995) and White (2000). In order to establish the asymptotic properties of our tests, we also develop a recursive variant of the nonparametric simulated maximum likelihood estimator of Fermanian and Salanié (2004). In an empirical illustration, the predictive densities from several models of the one-month federal funds rates are compared.     

Trade, investment and growth: nexus, analysis and prognosis

Patterns of causation between income, export, import and investment growth for 39 developing countries are examined using model selection techniques which are based on ex ante predictive ability criteria to identify the best predictive model for each country. In particular, we look at the incidence of causation and reverse causation between various economic variables which are commonly believed to lead economic growth and find that there is less reverse causation from income to these variables than previously thought. We also construct an index of global business cycle conditions and find that models of countries with high trade exposure, growth rates and investment rates tend to gain in predictive ability from the addition of this variable.     

Diverging Measures of Capacity Utilization: An Explanation

In the wake of the recent recovery in manufacturing production, the capacity utilization rates published by the Federal Reserve Board (FRB) have rebounded much more slowly than those published by the Institute for Supply Management (ISM). As a result, some observers have speculated that the manufacturing sector may have considerably less slack than is indicated by the FRB measures. Our view is that the two characterizations of manufacturing slack are not as incongruent as they first appear. This paper discusses the practical and conceptual differences between these measures of capacity utilization, and concludes that the recent divergence simply reflects the character of the latest business cycle. JEL Classification E220     

Audit Fees: A Meta‐analysis of the Effect of Supply and Demand Attributes*

We evaluate and summarize the large body of audit fee research and use meta‐analysis to test the combined effect of the most commonly used independent variables. The perspective provided by the meta‐analysis allows us to reconsider the anomalies, mixed results, and gaps in audit fee research. We find that, although many independent variables have consistent results, several show no clear pattern to the results and others only show significant results in certain periods or particular countries. These variables include a loss by the client and leverage, which have become significant in comparatively recent studies; internal auditing and governance, both of which have mixed results; auditor specialization, regarding which there is still some uncertainty; and the audit opinion, which was a significant variable before 1990 but not in more recent studies.     

Book-Tax Differences and Inland Revenue Audit Adjustments in New Zealand

Abstract:  Using confidential data from US manufacturing firms' tax returns and Inland Revenue Service (IRS) audit adjustments, Mills (1998) tests, and finds support for, her hypothesis that IRS audit adjustments increase as the book-tax differences increase. We test Mills' hypothesis using confidential data obtained from the New Zealand Inland Revenue (hereafter Inland Revenue). Confidential data provide the key variable of interest, Inland Revenue's proposed audit adjustment, which is not available from public sources. These data provide the exact audit adjustment amounts, eliminating measurement errors inherent in proxy variables, and enable a temporal alignment of the book-tax differences with the Inland Revenue audit adjustments, thereby enhancing the internal validity of the relation between book-tax differences and Inland Revenue audit adjustments. Because the results of our study using New Zealand data, another time period, a more diverse set of firms, and a different institutional environment are consistent with those of Mills, we argue for the generalizability of Mills' hypothesis that proposed audit adjustments are positively related to the excess of book income over taxable income.     

The future workplace: Views from the floor

Speculation on the future of work and the nature of the future workplace has come to dominate much academic discourse in recent years. Rarely however has the voice of what might be termed the average skilled employee been heard; those who are still shaping a career and may be most at the mercy of whatever changes occur. This study seeks to fill this gap. Stemming from a 1-year research project at Cranfield School of Management, this paper focuses on data collected from a survey exploring the understanding of current and future organisations, and the nature of current and future leadership. The survey was carried out in 2003 and sampled 469 MBA graduates and a further 340 respondents to a web-based questionnaire. The paper provides an overview of the academic discourse on the future workplace, explores the perceptions and expectations of the sample and draws conclusions regarding significant anticipated trends for the future workplace as seen by those on the shop floor. These centre around increased flexibility and autonomy, but with limited awareness of the nature of leadership skills required to lead such a workforce.