Computer-Assisted Instruction and Student Performance in Macroeconomic Principles

Steven Cox reports on a research project in which computer-assisted instruction was tried at Arizona State University. He explains the experimental design which involved a comparison of student learning of macroeconomic principles by CAI with that of a control group. Fairly detailed accounts are given of the computer simulations Cox used. The statistical significance of nine student characteristics in terms of their impact on overall test performance is discussed. This article should have practical value to others doing research in this field.     

Franchise network restructuring: Pressures,constraints and mechanisms

Franchised businesses operate on the basis of granting individual franchisees trading rights to serve territories or market areas on either an exclusive or a non-exclusive basis. The design of these territories is generally undertaken during the roll-out phase of the franchise. However, these territories and market areas may become sub-optimal over time, necessitating restructuring. However, if the franchisor has granted exclusive rights to a territory then this is likely to involve a breach in the franchise contract. In cases where existing franchisees do not have exclusive territories they may nevertheless make a legal challenge to the creation of additional franchises on the grounds of encroachment. This paper – which is based on a study of 40 franchisors in the UK – examines how franchisors go about network restructuring in constrained and non-constrained situations. Franchisors typically did not act on their legal rights, echoing findings of earlier franchising studies which reveal a divergence between contractual rights and operational behaviour. This focus on network restructuring also provides new perspectives on the reasons for ownership reversion and the growth of multi-unit franchisees.     

An Economic Analysis of the Effects of the Uruguay Round Agreement and Full Trade Liberalization on the World Dairy Sector

A dairy trade model of the world dairy economy is developed. The model incorporates the allocation of milk fat and solids- nonfat among dairy commodities in a spatial equilibrium context. The model is used to simulate the market equilibrium impacts of the Uruguay Round Agreement and full free trade in the world dairy sector, including prices, production, consumption and trade flows. The free trade results indicate average world prices for farm milk near current U.S. levels, while farm milk prices in western Europe, Japan and Canada fall by 25.8%, 36.4% and 32.3%, respectively. In contrast, Australia and New Zealand farm milk prices rise by 22.5% and 50.8%, respectively.
Un modèle de l'économic laitière mondiale est développé. Le modèle analyse l'allocation spatiale du lait, de ses composantes (c'est-à-dire, matière grasse, protéine) et des produits laitiers. Il est utilisé pour simuler les effets de l'accord de l'Uruguay et de la libéralisation des marchés sur l'économie laitière, y compris sur les prix, la production, la consommation et les échanges commerciaux. Les résultats indiquent qu'en présence de marchés libres, les prix mondiaux seraient proches des prix courants aux États-Unis, alors que leprix du lait diminuerait de 25,8 %, 36,4 % et 32,3 % en Europe de l'Ouest, au Japan et au Canada, respectivement. Par contraste, le prix du lait en Australie et en Nouvelle Zélande augmenterait respectivement de 22,5 % et 50,8 %.     

A Generalized Distance Function and the Analysis of Production Efficiency

A generalization of Shephard's distance functions is proposed, extending the usefulness of distance functions in economic analysis. Applications to efficiency measurements and productivity analysis are presented. New indexes of productivity and technical, allocative, and scale efficiency are proposed and analyzed. Interpretation of these indexes in terms of ray-average cost, ray-average revenue, and cost-to-revenue ratio is discussed.     

Institutional Interest in Corporate Responsibility: Portfolio Evidence and Ethical Explanation

This study examines the extent to which corporate responsibility influences the demand for shares by institutions. The study follows Bushee (Account Rev 73(3):305–333, 1998) in categorising institutions as dedicated or transient. The demand for shares is organised according to three factors: a long-term factor, corporate responsibility; a short-term factor, market liquidity; and a time-independent factor, portfolio theory. The rank and importance of the factors for the different types of institutional investor are analysed. For one of two types of dedicated institution, corporate responsibility is as important as portfolio theory in influencing the demand for shares. For all dedicated institutions, corporate responsibility influences the demand for shares more than market liquidity. For two of the three types of transient institution, market liquidity is the most important factor in share selection. For all transient institutions, the least important factor is corporate responsibility. Findings suggest that corporate responsibility positively and significantly influences the demand for shares by dedicated institutions. The discussion considers the extent to which these trends are constitutive of significant shifts in ethicality within the context of institutional investment. Looking at this from within a highly institutionalised Anglo market model, dedicated institutions’ commitment to broader and longer-term concerns could be interpreted as a small but significant step towards a more axiologically informed ethical business practice. Such a form of engagement calls for sensitive attention to a fuller range of features deemed to be relevant to investment decisions, as opposed to more narrow reliance on legislation, codes of practice and fiduciary principles.     

THE EFFICACY OF REGULATORS' ESTIMATES OF LIFE INSURER PORTFOLIO RISK

Abstract: In recent years, state regulators have expended considerable effort and resources to better measure the asset portfolio risk of life insurers. Their estimates are both particularly important in determining reserve requirements and potentially useful for testing the agency costs of conflict between the fixed and residual claimants of insurers. In this study, we test the degree to which these regulator-developed measures are related to the firm and environmental characteristics that financial economists have linked to managerial risk-taking propensities. Our results provide insight into whether these measures effectively gauge the risk preferences of insurer managers.     

On Some Principles of Statistical Inference

Statistical theory aims to provide a foundation for studying the collection and interpretation of data, a foundation that does not depend on the particular details of the substantive field in which the data are being considered. This gives a systematic way to approach new problems, and a common language for summarising results; ideally, the foundations and common language ensure that statistical aspects of one study, or of several studies on closely related phenomena, can be broadly accessible. We discuss some principles of statistical inference, to outline how these are, or could be, used to inform the interpretation of results, and to provide a greater degree of coherence for the foundations of statistics.