Is off-farm income reforming the farm? Evidence from Mexico

Does access to off-farm income complement or compete with agricultural production? This article explores the effect of off-farm income on agricultural production activities, using data from the 2003 Mexico National Rural Household Survey. We first discuss the theoretical conditions under which access to off-farm income may influence production in an agricultural household model. Instrumental-variable (IV) estimation methods are then used to test whether agricultural production activities, technologies, and input use differ between households with and without access to off-farm income. We find that off-farm income has a negative effect on agricultural output and the use of family labor on the farm, but a positive impact on the demand for purchased inputs. There is also a slight efficiency gain in households with access to off-farm income. Findings offer insights into how household production evolves as rural households increasingly engage in off-farm income activities.     

Ethics,gratuities, and professionalization of the purchasing function

This study investigated (1) whether potential future purchasing agents were predisposed to accept gratuities or whether the practice of gratuity acceptance is a manifestation of the job itself, (2) whether the existence of a code of ethics forbidding gratuity acceptance curtails the occurrence, and (3) whether disparities in ethics policies between the sales and purchasing functions affect gratuity acceptance. Hypotheses based upon the concepts of organizational concern and institutionalized ethics are developed and empirically tested. Results suggest that future purchasing agents are predisposed to accept gratuities and that formal written ethics policies decrease the acceptance of gratuities. Disparities in ethics policies between the sales and purchasing functions concerning gratuities failed to affect gratuity acceptance significantly.Gregory B. Turner is assistant professor of marketing at Livingston University. He has published inThe International Journal of Logistics Management and theTransportation Journal.G. Stephen Taylor is Associate Professor of management at Mississippi State University. His research interests include ethics in computer usage, performance appraisal, and turnover control.Mark F. Hartley is Assistant Professor and National Association of Purchasing Management/Carolinas-Virginia chair of Purchasing at the College of Charleston. His research interests include ethics and professionalization of the purchasing function.     

A diffusion approximation for the ruin function of a risk process with compounding assets

Abstract

The traditional theory of collective risk is concerned with fluctuations in the capital reserve {Y(t): t ?O} of an insurance company. The classical model represents {Y(t)} as a positive constant x (initial capital) plus a deterministic linear function (cumulative income) minus a compound Poisson process (cumulative claims). The central problem is to determine the ruin probability ψ(x) that capital ever falls to zero. It is known that, under reasonable assumptions, one can approximate {Y(t)} by an appropriate Wiener process and hence ψ(.) by the corresponding exponential function of (Brownian) first passage probabilities. This paper considers the classical model modified by the assumption that interest is earned continuously on current capital at rate β > O. It is argued that Y(t) can in this case be approximated by a diffusion process Y*(t) which is closely related to the classical Ornstein-Uhlenbeck process. The diffusion {Y*(t)}, which we call compounding Brownian motion, reduces to the ordinary Wiener process when β = O. The first passage probabilities for Y*(t) are found to form a truncated normal distribution, which approximates the ruin function ψ(.) for the model with compounding assets. The approximate expression for ψ(.) is compared against the exact expression for a special case in which the latter is known. Assuming parameter values for which one would anticipate a good approximation, the two expressions are found to agree extremely well over a wide range of initial asset levels.     

Permanent and Temporary Components of Stock Prices: Evidence from Assessing Macroeconomic Shocks

This paper outlines a simple macro model with overlapping wage contracts to investigate how the temporary and permanent components of stock price movements may be related to aggregate macro-economic supply and demand disturbances. In the content of the model, we show that aggregate demand shocks have only temporary effects on real stock prices, while supply shocks may affect the level of real stock prices permanently. Moreover, the temporary component in U.S. stock prices, identified by placing appropriate structural restrictions on a vector autoregressive system estimated for the postwar period, is statistically significant. This evidence supports the mean-reversion hypothesis that stock prices are not pure random walks. The finding is robust to the choice of variables used in the vector autoregressive system and periodicity.     

Search Quality and Revenue Cannibalization by Competing Search Engines

Consumers are attracted by high‐quality search results. Search engines, though, essentially compete against themselves because consumers are induced to substitute away from advertisement links when their organic counterparts are of high quality. I characterize the effect of such revenue cannibalization upon equilibrium quality when search engines compete for clicks. Cannibalization provides an incentive for quality degradation, engendering low‐quality equilibria—even when provision is costless. When consumers exhibit loyalty there is a ceiling above which result quality cannot rise, regardless of what the maximum feasible quality happens to be. Seemingly procompetitive developments may exert downward pressure on equilibrium quality.     

Defensive sniping and efficiency in simultaneous hard-close proxy auctions

A well-known myopic bidding strategy fails to support an equilibrium of simultaneous ascending proxy auctions for heterogeneous items when a hard-close rule is in place. This is because, in common with the single-auction case, last minute bidding (sniping) is a best response to naive behaviour. However, a modification to the myopic strategy in which all bidders submit an additional bid in the closing stages of the auction–a practice I call ‘defensive sniping’–is shown to yield an efficient, belief-free equilibrium of such environments. This equilibrium is essentially unique within the class of belief-free, efficient equilibria.     

‘Nothing gets done and no one knows why’: PCS and workplace control of Lean in HM Revenue and Customs

This article examines the willingness and capacity of public sector unions to mobilise action against changes in the labour process in order to maintain some measure of control at the point of production. Taking as an instance an extended dispute in Her Majesty's Revenue and Customs over the introduction and impact of Lean processes, it marshals evidence gathered from documentary sources, branch representatives and national lay full‐time officers to engage with the notion of a trade union bureaucracy. In taking a union with a left‐wing leadership and a section with 80 per cent membership with an expressed willingness to escalate industrial action, the article tests Hyman's 1979 contention that, rather than a concentration on a bureaucratic caste, a much better explanation for conservatism centres on the nature of social relations within the union that encompass a wider layer of representatives.     

In the Aftermath: Consumer Choice and the Deregulation of Australian Retail Banking, 1988–1993

This article explores whether deregulation of the Australian retail banking sector in the 1980s delivered the enhanced consumer choice that had been promised. Using new data on banking products and their usage, it analyses consumers' ability to select optimal ‘frontier’ products. It concludes that following deregulation of retail banking, product offerings underwent such tumultuous change that the scope for effective consumer choice was severely constrained. While there were improvements towards the end of the period, progress was not assisted by the banks' strategy of proliferating and re‐bundling products. Consequently, the anticipated improvements to consumer choice were slow to arrive.