Canadian Inter-City House Price Differentials

The purpose of this paper is to identify the sources of intercity house price differentials in Canada. The results indicate that demand factors are important explanatory variables; a 1% increase in the income of households raises house prices by 1.11%; higher rates of anticipated inflation result in higher house prices as households increase their demand for real assets such as housing during inflationary periods; and finally, the fraction of households that are non-family households is positively associated with house prices. These results are in agreement with those of other countries.     

THE EFFECT OF A SINKING FUND ON THE REOFFERING YIELDS OF NEW PUBLIC UTILITY BONDS

In this study, empirical tests are conducted to determine the impact of a sinking fund on reoffering yields of a sample of new public utility bonds sold between January 1977 and March 1982. The findings of the regression analysis are consistent with the hypotheses that the value of the sinking fund varies with the default risk of the issuer and with market expectations of future interest rate movements, and that the sinking fund improves the liquidity of a bond issue.     

Strategic Goals and Practices of Innovative Family Businesses

A profile of 231 Washington state family businesses is presented. This article focuses on the business strategies of these firms, analyzing the relationship between strategy, performance, and business practices. Firms categorized as Prospector firms reported more gains in their current market position than all other strategic types. These firms were more likely to value an effective management and employee team and to develop new quality products and services and career development plans for non-family employees. Implications for family businesses are discussed.     

Risks and threats to civilization, humankind, and the earth

This paper is a brief look at a wide range of risks that are said to present great threats to humankind. It was stimulated by several interacting factors. First, too many books and articles about astrophysical catastrophes, in the scientific and semi-scientific press, give relatively little attention to their timeframe or the measures to anticipate and prepare for them. Second, and most important, is that the overblown effects of 9/11 have distorted the United States of America's perspective and agenda on catastrophes. The result is that billions of dollars have been wasted and attention turned away from threats that could be truly catastrophic for the United States and, in many cases, for the rest of the world. Third, are books that have become popular by raising the threat that what will happen to us will be similar to what happened to earlier societies such as the Maya and the Easter Islanders. Most notably among these is Jared Diamond's Collapse [Jared Diamond, Collapse: How Societies Choose to Fail or Succeed, Penguin Group, 2005]. The failure in these doomsday arguments is to overlook the greater sophistication, knowledge, awareness, monitoring and preparation currently in the United States and in other parts of the globe. The institutional structure and scientific knowledge today would either prevent or deal with the kind of socio-economic decline anticipated by the “collapse” arguments. In contrast several geophysical and celestial risks do imply global catastrophe. The value of this paper is as broad background to the specific scenario papers that follow. While it leans heavily on the work of others, it offers three new features for the analysis of any extreme risk. First is a scale of devastation, based on deaths. Second is a comprehensive time frame—now to the end of the Earth. Third is an outline of general questions that must be addressed for any risk, however large or small, if it is to provide insight into policy choices and promote systemic thinking.     

Executive compensation: a calibration approach

Summary. We use a version of the Grossman and Hart principal-agent model with 10 actions and 10 states to produce quantitative predictions for executive compensation. Performance incentives derived from the model are compared with the performance incentives of 350 firms chosen from a survey by Michael Jensen and Kevin Murphy. The results suggest both that the model does a reasonable job of explaining the data and that actual incentives are close to the optimal incentives predicted by theory. Received: August 12, 1997; revised version: October 27, 1997     

The Diffusion of Management Innovations: The Possibilities and Limitations of Memetics

abstract    This paper applies a theory of memetics to help explain the diffusion of management innovations as a dynamic evolutionary process. Existing analyses of diffusion frequently note the variation, selection or replication of management innovations, yet few have linked these together with the common observation that some innovations seem to 'evolve'. This paper draws on qualitative evidence from two case-studies of BPR implementation to illustrate that the replication, selection and variation of management innovations can form evolutionary algorithms ('memes') which support diffusion processes, and, in doing so, clarifies the ways in which innovations contribute to their own replication and explains how the high 'failure' rates associated with BPR can sometimes improve its chances of reproduction.     

Consumer profiles section: Consumer profiles for conventional bed and waterbed owners in Canada

This study examines consumer profile data on waterbed and conventional bed consumers. Five hundred conventional and waterbed consumers in Canada were randomly selected from two national lists of waterbed/mattress purchasers from 1981 to the present. A 73-item questionnaire was sent by mail to all of the selected respondents. The cover letter stated the purpose of the project; to study why people bought the bed that they are presently using. One hundred and sixty-two completed, useable questionnaires were returned, yielding a response rate of 37%. Following a series of multivariate analyses, a consumer profile for the two bed users was developed. Both groups tended to be married. The conventional bed consumers had: (a) either no children or one child at home; (b) a mean age of 44; and, (c) an average income in the $30,000-$40,000 range. Waterbed consumers had: (a) a mean age of 36, (b) one child living at home; and, (c) an average income in the $20,000-$30,000 range. On the Adorno F scale, the conventional bed user was found to be more conservative and authoritarian as compared to the waterbed user. The results did not support the notion that waterbed users are abnormally sexually-oriented or “kinky”. For both groups, the price paid for the purchased bed fell in the $600 to $650 range. Implications for retailers were discussed.