Cost‐ and Income‐based Measures of Human Capital

Human capital is increasingly believed to play an important role in the growth process, however, adequately measuring its stock remains controversial. In this paper three general approaches to measurement are identified; cost‐based, income‐based and educational stock‐based. This survey focuses on the first two approaches and provides a critical review of the theories and their applications to data from a range of countries. Particular emphasis is placed upon the work of Jorgenson and Fraumeni (1989, 1992) and some new results for New Zealand based upon their approach are also presented.     

Determinants of Small Pacific Island Tourism: A Vanuatu Study

The research reported in this paper sought to identify the key determinants of small island tourism in the Pacific region. In order to investigate this research problem, 185 Australian tourists were surveyed as they returned from holidaying in Vanuatu. The sample included those who had visited outer islands such as Espiritu Santo as well as those who had not ventured beyond the main island. Findings indicated that the most important influences on the decision to visit the outer islands were the climate and the reputation as a holiday destination. When rating Vanuatu as a holiday, both those who went to an outer island and those who did not rated the three main reasons as friendliness, range of restaurants and quality of accommodation, whereas the principal reasons given for not visiting an outer island were: that the outer islands were too expensive to access; most tourists wanted a “stay put” holiday; and they did not have enough time on their holiday. From the findings of this research on the determinants of small Pacific island tourism, it is suggested that further research into the applicability of these determinants be conducted in other small island environments in other regions of the world.     

GM crops on trial: Technological development as a real-world experiment

Through the European controversy over agricultural biotechnology, genetically modified (GM) crops have been evaluated for an increasingly wide range of potential effects. As the experimental phase has been extended into commercial practices, the terms for product approval have become more negotiable and contentious. To analyse the regulatory conflicts, this paper links three theoretical perspectives: issue-framing, agri-environmental discourses, and technological development as a real-world experiment.Agri-biotechnological risks have been framed by contending discourses, which attribute moral meanings to the agricultural environment. Agri-biotech proponents have emphasised eco-efficiency benefits, which can remedy past environmental damage, while critics have framed ‘uncontrollable risks’ in successively broader ways through ominous metaphors of environmental catastrophe. Regulatory authorities have translated those metaphors into measurable biophysical effects. They anticipate and design commercial use as a ‘real-world experiment’, by assigning greater moral-legal responsibility to agro-industrial operators who handle GM products.Expert-regulatory debate reflexively considers the social discipline necessary to prevent harm, now more broadly defined than before. Official procedures undergo tensions between predicting, testing and prescribing operator behaviour. In effect, GM crops have been kept continuously ‘on trial’.     

The National Cycle Strategy in the UK: to what extent have local authorities adopted its model strategy approach?

In 1996 the UK government announced a National Cycle Strategy (NCS) which included a model local cycle strategy. This paper reports on the findings of an ongoing research project, which seeks to evaluate the extent to which recently published local cycle strategies reflect best practice as enshrined in the model guidance. The results suggest that the level of take up of the model strategy is highly variable and ranges from authorities which adopt the model in its entirety to those that effectively ignore it. If government targets for increasing cycle use are to be achieved then it will be necessary for more local authorities to develop robust plans which are consistent with the NCS.     

Informal Insurance Arrangements with Limited Commitment: Theory and Evidence from Village Economies

Recent work on consumption allocations in village economies finds that idiosyncratic variation in consumption is systematically related to idiosyncratic variation in income, thus rejecting the hypothesis of full risk-pooling. We attempt to explain these observations by adding limited commitment as an impediment to risk-pooling. We provide a general dynamic model and completely characterise efficient informal insurance arrangements constrained by limited commitment, and test the model using data from three Indian villages. We find that the model can fully explain the dynamic response of consumption to income, but that it fails to explain the distribution of consumption across households.     

Losses from Failure of Stakeholder Sensitive Processes: Financial Consequences for Large US Companies from Breakdowns in Product,Environmental, and Accounting Standards

This article makes first use of a set of databases that are authoritative, independent, and consistent to examine an old research question: do firms hurt their financial performance by damaging stakeholder interests? The databases are US government on-line listings of fines for environmental breaches, unsafe workplaces, fraudulent accounting standards, and product recalls. These measures are assumed to proxy for signals to stakeholders of the environmental, social, and governance (ESG) risks in transacting with the firm and appear to have fewer biases than conventional measures of stakeholder standards. Using a sample of all non-financial S&;P 500 firms during the most recent 1998–2003 full cycle in the market, after controlling for firm-specific differences, sales margins of firms fell by 0.8% if they announced a product recall and by 0.4% if cited by OSHA for an unsafe workplace; and shareholder return was significantly reduced by an EPA or SEC prosecution. This study links the risk of transaction uncertainty, information signaling theory, and the resource-based view of the firm to company financial performance. Results support the normative assumption that a firm’s sales margin will be damaged by unethical treatment of stakeholders as evidenced by ESG breaches, presumably because risk-averse customers and suppliers are alert to signals of counterparty risk.