A General Method of Deriving the Inefficiencies of Banks from a Profit Function

This article develops a new method of estimating inefficiencies in joint production and shows that unlike the approaches utilized in the previous studies of inefficiency, this method maintains a consistent relationship between the error term of a profit function and the error terms of its price derivatives. A useful by-product of the method is a proof of a Hotelling-like lemma that relates stochastic input demand and output supply functions to stochastic profit functions. While the previous studies fit a single frontier to data on all firms, this paper estimates a frontier unique to every observed firm to allow each one to have a different potential of achieving maximal levels of profit. The new method is applied in the analysis of annual data, 1984–1989, for U.S. commercial banks. Both the analytical and numerical results of the paper show that the residual that the previous studies attribute to inefficiency includes the effects of excluded variables and of inaccuracies in the specified functional forms. Once accurate estimates of these effects are subtracted from the residual, the distortions in the measured inefficiencies should be considerably reduced. Consequently, this article considers how such estimates might be obtained.     

Effects of demographic,experiential, and attitudinal factors on occupational sex stereotypes

The purpose of this study was to (a) compare the occupational sex stereotypes of 366 college students with those reported by Shinar in 1975, and (b) examine the relationships between demographic, experiential, and attitudinal variables and these occupational sex stereotypes. The results indicated a significant difference in occupational ratings from Shinar's study, with females' perceptions shifting more than males' perceptions. In addition, subjects' gender, tenure with female managers, and attitudes toward women as managers, were shown to be significant predictors of occuptational ratings. The implications of these findings for both employees and managers are then discussed.     

Exploring subcultural differences in hofstede's value survey: The case of the Chinese

Hofstede's Value Survey Module (VSM) identifies fundamental differences in the way people in various countries perceive and interpret their worlds. After adjusting value scores on the basis of demographic features of samples in the present study, values between subcultural groupings in four Chinese-populated regions (Taiwan, Beijing, Hong Kong, and Wuhan) were compared, and strong subcultural differences revealed. A methodology is proposed to facilitate VSM comparisons using limited, secondary data sources. Propositions concerning subcultural differences are suggested on the basis of the findings.     

Acceptance of Accounting Standards

When financial statements are audited, a client and auditor may disagree about an accounting disclosure. While the disclosure of such a disagreement may increase the information content of a statement it may also be socially undesirable in that it signals a difference in views about the state of the reporting enterprise. This in turn may increase agency costs and introduce uncertainty about the state of the firm. In this paper we focus on public policy implications concerning auditor-client disagreements and examine the ex ante probability that such cases will occur. We find that accounting standards that allow two accounting options may be optimal in reducing frequency of disagreements among auditors and between standard-setters and their constituencies, and possibly also between clients and their auditors. The New Zealand model of compliance with accounting standards may be preferable to that practiced in the US.     

Would adopting the Australian dollar provide superior monetary policy in New Zealand?

Counterfactual experiments with the Reserve Bank of New Zealand's core model provide some insight into the implications for New Zealand's economic performance over the 1990s, had it credibly fixed its currency to the Australian dollar. If New Zealand had faced the relatively more stimulatory Australian monetary conditions prevailing over the 1990s, then output growth may have been temporarily boosted. However, demand pressures would have probably been greater and inflation higher. In particular, results suggest that over the latter part of the 1990s annual inflation would have been approximately 1% point higher on average. Stochastic simulation experiments provide a vehicle to analyse what the implications of currency union might be more generally. Results suggest that if New Zealand were to lose its ability to set monetary policy independent of that set in Australia, then the variability of inflation and output would increase over the business cycle.     

A Cost Function Analysis of the Australian Transportation Equipment Industry

This article investigates the existence of economies of scale and input cross and direct price elasticities of demand in the Australian motor vehicle industry. Our estimated cost elasticities were less than one (consistent with economies of scale), but not significantly less than one at the 10 per cent level for two versions of the model. However, the estimated cost elasticity was significantly less than one at approximately the 2.5 per cent level for a third. Thus, these results give some credibility to the infant industry argument for continued assistance to the Australian transportation equipment industry. A four-input model separating domestic and foreign intermediate goods inputs suggests that while restrictions on imported components may have given some short-run relief to the domestic components industry and increased the demand for labour domestically, they decreased the demand for domestic capital. Although the infant industry argument could support short-run protectionist policies for the industry, it appears that such policies regarding the Australian motor vehicle industry must be designed carefully with a specified phase-out period if long-term adverse results are to be avoided.     

Hierarchical Zoning, Incompatible Uses and Price Discounts

This study examines an aspect of hierarchical zoning. Hierarchical zoning, unlike mutually exclusive zoning, is uni-directional in that it protects upper-level residential uses from nonconforming, non-residential uses but not vice versa. The result is that the lower-level zones can be a mixture of several nonconforming, incompatible uses. This unique attribute of hierarchical zoning offers a window of opportunity for choices for affordable housing at affordable locations. Using hedonic analysis, empirical evidence shows that huge price discounts (over 15%) are associated with apartments that are situated in nonconforming zones. Arguments here support more flexible zoning.     

Occupational role development: the changing determinants of outcomes for the individual.

This research examined the development of an occupational role from one month before the role incumbent's graduation from training to five months into the first job. Kahn et al.'s (1964) theory of "expectation-generated role stress" provided a conceptual framework for the development of a causal model of role development. A national sample of 181 physicians' assistants (PAs) and their supervising physicians reported by questionnaire on actual and expected PA task performance and participation in decision making at three points during the period of interest. Task data were used to derive three measures of objective role ambiguity and conflict. In addition, PAs provided data on perceived role ambiguity and conflict and attitudes about work, A path analytic technique was applied to the model to examine changes over time. Results suggest that, during the first months of employment, the role occupant passes through different stages of development, during which the determinants of outcomes change. This notion of changing causal structure was supported by the identification of four casual patterns of outcomes, the changing strength of prediction models, and the changing effects of discrepancies between pre-job expectation and on-the-job reality. Role-development stages are discussed in terms of rational and emotional processes, and implications for theory, research, and practice are proposed.     

When customers are members: Customer retention in paid membership contexts

This article seeks to gain an understanding of how members’ characteristics relate to lapsing behavior in paid membership contexts. Literatures such as social identity theory are used to propose hypotheses that are tested using a hazard rate model on archival data pertaining to 7,798 members of an art museum. The results indicate that the hazard of lapsing is lowered with increasing duration, participation in special interest groups whose goals are related to those of the focal organization, gift frequency, and increasing interrenewal times. Conversely, members who have downgraded their membership level in the past, those who have participated in special interest groups whose goals are unrelated to those of the focal organization, and those who received their membership as a gift are more likely to lapse. C. B. Bhattacharya is an assistant professor of marketing at the Goizueta Business School of Emory University. His Ph.D. in marketing is from The Wharton School, University of Pennsylvania. His research interests include brand loyalty and brand health, customer retention, and organizational identification and disidentification. He has published in theJournal of Marketing, International Journal of Research in Marketing, Journal of Retailing and Consumer Services, Marketing Letters, and other journals. During the past few years, students in his marketing research course have addressed real problems for over 30 nonprofits. In 1995, he received The Emory Williams Distinguished Teaching Award, which is the highest teaching honor conferred by Emory University.