Competition Policy: What are the Costs and Benefits of Measuring its Costs and Benefits?

Summary  Competition authorities are increasingly measuring the effects of their enforcement actions, seeking a robust justification for the proliferation of competition policy. We highlight the importance of identifying the right counterfactual against which to measure effects, and set out the relevant categories of costs and benefits. We then explore how a balance can be struck between the benefits and inherent limitations of these measurement exercises. Relatively crude analyses of cartel action benefits can be sufficient to achieve public legitimacy for competition policy. Assessing the effects of merger and conduct inquiries is often ambiguous, but could be used to improve decision-making processes. Director and Managing Consultant, respectively, at Oxera, Oxford and London. The valuable comments of Fod Barnes, Kerry Hughes and an anonymous referee are gratefully acknowledged. The opinions expressed in this article are those of the authors alone.     

Tourism as an alternative source of regional growth in Portugal: a panel data analysis at NUTS II and III levels

The role of tourism is of vital economic importance, particularly for small countries with a privileged geographical location and favourable weather conditions. This paper examines the importance of tourism as a conditioning factor for higher regional growth in Portugal by employing the conditional convergence hypothesis of Barro and Sala-i-Martin, associated with the endogenous growth theory. The panel data estimation approach provides evidence of the positive impact of tourism (through the accommodation capacity) on the growth in per-capita income among the Portuguese regions, increasing the rate of convergence. Therefore, tourism can be considered as an alternative source for stimulating higher regional growth in Portugal, if the supply characteristics of this sector are improved.     

Are the Best Small Companies the Best Investments?

Previous research finds that large companies previously judged to be excellent growth companies have subsequently been poor investments. We examine small companies selected by Business Week on the basis of multiple criteria used in annual articles featuring highly rated growth companies. We study the investment performance over the three years before eleven annual Business Week publications and the three years after publication. We find positive excess returns in the pre‐publication period, but negative excess returns in the post‐publication period. This reversal in investment performance appears to be due to a mean‐reversion tendency in operating performance, in which the earnings and the past rates of return on capital of such companies subsequently decrease significantly.     

A market model of analysts’ opinions to explain changes in the dispersion of opinions

The demand for and supply of analysts’ opinions in this model yield an equilibrium that demonstrates how the information content of the opinions reacts to changes in exogenous parameters. The model also shows how changes in the parameters make analysts’ opinions more or less dispersed; for example, a decline in investor risk aversion, a decrease in market volatility, and an increase in information costs can lead to analysts’ opinions becoming more similar. Recognizing how exogenous factors can affect the supply and demand of analysts’ opinions gives additional insights into questions concerning what may appear to be herd behavior by analysts and also the relationship between forecast dispersion and information content. (JEL: G29, C71)     

Immobiliencontrolling — Optimierung der immobilienbezogenen Kosten durch Gründung einer Generalmietgesellschaft

Ohne Zusammenfassung Dipl.-Ing. (univ.) Michael Belau ist Director und Head of Rental Management Dipl.-Wirtschaftsing. (FH) Michael Schildger ist Vice President und Head of Finance Dr. Verena Sturm ist Manager Corporate Real Estate Services     

The economics of land transfer and title insurance

In the presence of uncertainty over the title of land (due to fraud or error), a legal system can protect either the current (innocent) owner, or a previous owner who claims title. The predominant system in the United States generally awards title to the latter in the event of legitimate claim. Thus, current owners frequently purchase title insurance to provide indemnification in the event of a loss. In contrast, the Torrens system awards title to the current owner, but provides for indemnification of any legitimate claimants. We evaluate these two systems and argue that if transaction costs are low, both promote efficient assignment of title (according to the Coase Theorem), but if transaction costs are high, the Torrens system is more likely to award title to the party that values it the most (namely, the current possessor).     

Believing in employment discrimination: The case of Forrest Mims,Scientific American,and title VII protection

This article reviews the law regarding Title VII employment discrimination protection from religious discrimination. The issues surrounding the principal legal protection in this regard are explored in the context of a recent controversial case in which an author, Forrest Mims, was not hired as a regular contributor forScientific American magazine, ostensibly because of his belief in the theory of creation over the theory of evolution. The definition of what constitutes a protected religious belief or practice is seen to have expanded over time. However, a belief in creationism is not necessarily seen as being tantamount to a religious belief under present legal interpretation of Title VII. The implications of this finding for future needed Title VII revision are discussed.     

Head-heart disparity among future managers: Implications for ethical conduct

An examination of the ethical perceptions of business students using Macobby's head/heart traits and a comparison to earlier studies of managers, accountants, and business students is made. The data were collected at three universities that are similar in size, enrollment and degree programs within the College of Business. Results indicate that present day business students are no less ethically inclined than are their business counterparts in previous eras. In general head traits dominated over heart traits, an indication that business schools continued to do a good job emphasizing and developing analytical skills but a poor job of developing the qualities of the heart that are generally associated with ethical behavior. The implications of these findings are discussed.     

Models for which the MLE and the conditional MLE coincide

The MLE, CMLE and MMLE coincide in a linear regression model with fixed individual effects. In this case, there is no incidental parameters problem and the MLE is consistent. The equivalence of these estimators is important because CMLE=MLE implies both the consistency of the MLE and the efficiency of the CMLE. In general, we cannot expect to find a CMLE or MMLE, since there may be no fixed-dimension sufficient statistic for the effects, nor an appropriate transformation of the data whose distribution does not depend on the effects. However, we show that the MLE, CMLE and MMLE do coincide in systems of seemingly unrelated regressions and in systems of simultaneous equations. We establish this result for systems in which (exogenous) variables in addition to (or other than) the intercept may have coefficients which vary over individuals, provided that the set of such variables is the same in every equation.The financial support of the National Science Foundation is gratefully acknowledged.