INCOME TAX DATA AND FARM FINANCIAL STATISTICS

Tracing the income patterns of individual farm operators whose major source of income is generally derived from farming indicates that off-farm income is becoming an increasingly important income component. The relative importance of off-farm income has nearly quadrupled during the last 20 years, rising from about 10 percent of total income to about 37 percent of total income. Most of this off-farm income can be traced to wages and salaries. These fractions are heavily dependent upon relative income levels. In 1970, very low income farmers posted an aggregate net farm loss whereas the $15,000 - $20,000 class secured about three-quarters of their total income from farm sources. In this same year, wages and salaries were generally the prime off-farm income source for farmers with an assessed income of less than $20,000. Dividends and interest were more important to farmers with an income in excess of $20,000. These differences are faithfully reflected in the regional compilations. As a percent of total income, off-farm income ranged from 41 percent in Ontario to about 29 percent in Quebec. The composition of off-farm sources also varies considerably between regions. In 1970 the income position of taxable unincorporated farm operators (who relied on the farm for their major source of income) remained relatively unfavorable. These farmers still had one of the lowest average incomes of any major occupational class in Canada, with an income distribution which was relatively equally distributed between income classes and not unlike that of the national average. These assessed income statistics, of course, are not necessarily indicative of the welfare position of the respective occupational classes. The calculations conducted are simply illustrative of how income tax statistics can be utilized to facilitate our understanding of the income structure in primary agriculture today. The exercise simply underlines the observation that: The fact that there are conceptual differences between income tax data and other data sources should not detract from the usefulness of the income tax data …. Income tax statistics can stand as an independent data source for the analysis of a variety of issues [13]. For many purposes the tax definition of a farm operator may be more operational than the concept of a farmer as defined in the Census of Agriculture. We might profit considerably from further analyses which attempt to disaggregate Census farms into more homogeneous farm-types using the tax statistics available.     

Dynamic capabilities in entrepreneurial firms: A case study approach

Three entrepreneurial case studies in Canada show that changes in the environment??such as changes in customers?? needs and changes in competitive products??are the major sources of opportunities. To recognize and exploit these opportunities, the firm needs entrepreneurial capabilities. At the same time, to gain long-run competitive advantage, the firm needs dynamic capabilities. The case findings show that entrepreneurial capabilities have circular and iterative relationship with dynamic capabilities??each reinforces the other. The more often the iteration takes place, the stronger entrepreneurial capabilities and dynamic capabilities are. Further, the study builds on the extant literature and develops a new method to capture dynamic capabilities through capturing changes in ordinary capabilities.     

Edgeworth's conjecture with infinitely many commodities: commodity differentiation

Summary. Convergence of the cores of finite economies to the set of Walrasian allocations as the number of agents grows has long been taken as one of the basic tests of perfect competition. The present paper examines this test in the most natural model of commodity differentiation: the commodity space is the space of nonnegative measures, endowed with the topology of weak convergence. In Anderson and Zame [12], we gave counterexamples to core convergence in L ¹, a space in which core convergence holds for replica economies and core equivalence holds for continuum economies; in addition, we gave a core convergence theorem under the assumption that traders' utility functions exhibit uniformly vanishing marginal utility at infinity. In this paper, we provide two core convergence results for the commodity differentiation model. A key technical virtue of this space is that relatively large sets (in particular, closed norm-bounded sets) are compact. This permits us to invoke a version of the Shapley-Folkman Theorem for compact subsets of an infinite-dimensional space. We show that, for sufficiently large economies in which endowments come from a norm bounded set, preferences satisfy an equidesirability condition, and either (i) preferences exhibit uniformly bounded marginal rates of substitution or (ii) endowments come from an order-bounded set, core allocations can be approximately decentralized by prices. Received: July 29, 1996; revised version: January 14, 1997     

Long-term trend and short-run dynamics of the Canadian dollar: an error correction modelling approach

Using quarterly data for 1972–2000, the paper examines the long-term and short-term movements of the US-Canadian exchange rate. It is found that the standard purchasing power parity condition fails to explain movements of the Canadian dollar. The explanatory power of the model increases significantly when resource commodity prices are added to the equation. Short-term movements in the Canadian dollar are influenced by the interest rate differential between Canada and the USA.     

International Pricing with Costly Consumer Arbitrage

Consumer arbitrage affects international pricing in several ways. If all consumers face the same arbitrage costs, a monopolist's profit increases with arbitrage costs, and world welfare declines with them (if output does not rise). If arbitrage costs differ across consumers, a monopolist may sell in a second country even if there is no local demand—it can use the second country to discriminate across consumers in the first country. Again, world welfare typically falls with arbitrage costs. When there is also local demand in the second country, world welfare may be increasing in arbitrage costs, even if output falls.     

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