Economic Evaluation of Voting Power of Common Stock

This paper presents an economic evaluation of common stock voting rights. An index of relative voting rights inequality for different classes of stock of the same corporation is constructed and the empirical relationship between the market premium on a superior-voting stock and the voting inequality index is examined. In only three out of the 25 cases could investors have arbitraged between the two classes of stock, although in one case the arbitrage opportunity persisted for several months.     

Disclosing a Random Walk

We examine a dynamic disclosure model in which the value of a firm follows a random walk. Every period, with some probability, the manager learns the firm's value and decides whether to disclose it. The manager maximizes the market perception of the firm's value, which is based on disclosed information. In equilibrium, the manager follows a threshold strategy with thresholds below current prices. He sometimes reveals pessimistic information that reduces the market perception of the firm's value. He does so to reduce future market uncertainty, which is valuable even under risk-neutrality.     

PILE UPHOLSTERY FABRICS–CONSTRUCTION CHARACTERISTICS AND ABRASION RESISTANCE

Pile fabrics are currently enjoying a renewed popularity. They are not only an important upholstery fabric but also are gaining importance in other textile end-uses such as apparel, footwear, toys and accessories. Pile fabrics are made in both natural and synthetic fibres as well as natural and synthetic fibre blends. The study was an attempt to develop a procedure to evaluate the physical properties of pile fabrics to determine their suitability for specific end-uses. The study defined and tested different pile fabric samples which were representative of the 1979 interior textile fabric lines. Six pile fabrics, each with different fibre contents were subjected to seven separate tests and the results reported. The tests included fibre identification, fabric weight determination, fabric thickness determination, breaking load determination, tearing strength determination, and abrasion resistance determination. The results found that pile upholstery fabrics of different generic fibres performed differently when subjected to physical testing. The results obtained from the physical properties tests gave results which can be used to compare pile fabrics of different generic fibre content.     

ENVIRONMENTAL HEALTH AND CHOICE OF RESIDENCE

This paper analyses the relationships between the values and dispersion of residential properties and the environmental-health quality of their locations. It constructs residents' health-adjusted lifetime-utility function by combining satisfaction from consumption over the lifespan with risk to life from living in an environmentally unhealthy location. It employs this utility function to analyse willingness to pay for environmental-health quality, choice of location and residential dispersion and its relationship with income distribution.     

IMPROVING THE ANALYTICAL AND DATA FRAMEWORK OF THE GOVERNMENT SECTOR FOR NATIONAL GOALS ACCOUNTING*

Provision of “market goods” follows the decision rules of traditional microeconomics; pricing and resource allocation for such goods tend towards Pareto optimality. The provision of “collective goods,” by contrast, depends on political (or quasi-political) collective decision processes; beneficiaries often receive a share of collective goods free of charge or well below average or marginal (private or social) costs. No inherent tendency towards optimality may be presumed and separate analysis of collective goods becomes an essential part of national goals accounting. The national-income-accounts (NIA) distinction between personal consumption expenditures (PCE) and government purchases of goods and services corresponds roughly to a division between market goods bought by the consumer and a major category of “collective goods” (i.e. “public goods” provided by government). However, a significant proportion of PCE represents “collective goods” paid for by government, business, or nonprofit organizations and provided on behalf of the consumer, whereas a part of NIA government purchases represents services paid for by the consumer (i.e. “market goods”). This article develops operationally meaningful distinctions among “market goods,”“collective goods,” and “tied aid” (a mixed category with market-good and collective-good characteristics). These distinctions are determined by the nature of the decision processes–rather than by the characteristics of the beneficiary or the supplier. This classification is related to the national income accounts and major discrepancies are pinpointed. The blurring of the distinction among market goods, collective goods and tied aid is found to be most consequential in the NIA treatment of “education” and “medical care” services. NIA data for these two services are restructured for national goals accounting purposes in order to illustrate both the quantitative importance and the empirical feasibility of classifying benefits by their respective decision processes.     

Depositor Behavior under Macroeconomic Risk: Evidence from Bank Runs in Emerging Economies

Depositor behavior has been associated with bank‐specific characteristics, random runs, or contagion episodes. Using evidence on the 2000–02 bank runs in Argentina and Uruguay, this paper shows that macroeconomic risk is also important. Few macroeconomic shocks can quickly cause large runs. Macroeconomic risk affects deposits regardless of traditional bank‐specific characteristics. Furthermore, bank exposure to macroeconomic factors can explain differences in deposit withdrawals. During crises, the evolution of bank‐specific characteristics is mainly driven by macroeconomic factors, while the informational content of bank‐specific variables declines. Overall, depositors seem responsive to risk in a broader sense than that often considered by the literature.     

Characteristics of Consumer‐Preferred Labeling Policies: Experimental Evidence from Price and Environmental Disclosure for Deregulated Electricity Services

This study gauges how different information disclosure policies impact consumer understanding, performance, and satisfaction during the choice of a deregulated electricity supplier, and it explores how the market share of each firm responds to different policies in a hypothetical market. Compulsory disclosure of detailed price and environmental attribute information yields high consumer satisfaction and minimizes most types of information processing errors. The implications for disclosure policy and firm‐level market share are discussed.     

Mean-Variance Versus Direct Utility Maximization

Levy and Markowitz showed, for various utility functions and empirical returns distributions, that the expected utility maximizer could typically do very well if he acted knowing only the mean and variance of each distribution. Levy and Markowitz considered only situations in which the expected utility maximizer chose among a finite number of alternate probability distributions. The present paper examines the same questions for a case with an infinite number of alternate distributions, namely those available from the standard portfolio constraint set.