SUBSTITUTION BETWEEN WOOLS OF DIFFERENT FIBRE DIAMETER1

The extent to which wools with different fibre characteristics can be substituted in textile production and consumption holds implications for Australia's international and domestic marketing policies. An analysis of price-induced substitution between Australian wools of different fibre diameters was conducted. Fibre diameter was used to parameterise cross-price relationships in order to estimate a system of demand equations for wools by diameter class. The results indicate that direct substitution takes place within a very limited range of fibre diameters. The use of product characteristics to parameterise price relationships may be extended to other graded commodities.     

Factors explaining the diffusion of hybrid maize in Latin America and the Caribbean region

If future demand for maize in Latin America and the Caribbean region (LAC) is to be met from local sources, domestic production must continue to increase. Because further expansion in the area planted to maize is precluded by the limited availability of arable land, future increases in production will have to rely heavily on the spread of productivity‐enhancing hybrid technology. Until now, the diffusion of hybrid maize in LAC has been quite variable. Using data from 18 countries, we investigate factors affecting the hybrid maize diffusion rate. Our findings validate conventional profitability‐based explanations of producer adoption behavior, but they also confirm the importance of supply‐side factors, thereby providing empirical support for the life cycle theory of seed industry development. We conclude that if policy makers in LAC are to accelerate the diffusion of hybrid maize, they will have to ensure an environment in which it is not only profitable for producers to adopt improved germplasm, but also profitable for the seed industry to produce and sell high‐quality seed.     

AGRICULTURAL FLOOD ALLEVIATION BENEFIT ASSESSMENT: A CASE STUDY

The cost of flooding on farm land depends on land use, on the frequency, seasonality, duration and depth of flooding, and on water quality. This paper describes a method to calculate the average annual cost of flooding and the extra benefits or costs associated with given changes in flooding regime, illustrated by means of a simplified case study which examines the agricultural benefits of reduced summer flooding on grass in an area of environmental importance. Using hydrological and agro-economic data, the method derives the cost of individual flood events occurring in any one month for a given land use, weights these according to observed seasonality of flood flows, and derives average annual costs per hectare and for the floodplain as a whole for given levels of flood risk. The method is useful for appraising river flood alleviation schemes whereby the effects of changes in flood risk, flood seasonality or land use can be assessed.     

AN EVALUATION OF ALTERNATIVE APPROACHES TO MARKET SHARE ANALYSIS WITH APPLICATION TO THE KUWAITI POULTRY MARKET

Changes in exporter market shares in the Kuwaiti poultry import market over the period 1971–81 are analysed by three modelling procedures. Two traditional approaches, a first-order constant transition probability Markov model and a set of market share equations, are found to be of only limited use. As an alternative, a multinominal logit model of market share behaviour is estimated. The empirical results indicate that, in addition to relative price changes, domestic policy inducements for Brazilian and European Community exports are important in determining market share changes. A comparison of the explanatory abilities of the models suggests that the multinominal logit model is as least as good as traditional modelling alternatives with respect to econometric criteria. It is concluded that the multinominal logit model offers considerable promise as a tool for market share research.     

Profit maximisation vs. agency: an analysis of charitable giving by UK firms

The charitable giving of a large sample of publicly quoted UKfirms is analysed within a model that explores the profit maximisationand managerial utility enhancement motives for giving. The empiricalmethod draws a distinction between the decision to participatein giving and the determination of the amount of corporate contributions.Firm size and advertising intensity are found to be positivelyassociated with the probability of participation in giving.Stricter corporate governance and the rate of directors' remunerationare negatively related to the probability of participation.Among givers, the rate of giving is related positively to R&Dintensity, the rate of directors' remuneration, and corporateprofitability and negatively to firm indebtedness.     

The role of (non-)transparency in a currency crisis model

This paper extends the work by Morris and Shin (Am. Econom. Rev. 88 (1998) 587-597) where multiple equilibria in the self-fulfilling currency attack models can be reduced to a unique equilibrium when agents observe fundamentals privately with small errors. We find that under a more general specification with realistic parameters, noisy private observations are generally insufficient to prevent the multiplicity of equilibria. The pivotal role played by the transparency of fundamentals/policies in currency crisis is also examined. Surprisingly, transparency may trigger rather than eliminate currency crises when fundamentals are relatively healthy. Our results may be relevant to research in other coordination problems.     

Why should firms manufacture retailer brands?

For firms manufacturing convenience goods there are three branding policies available, a proprietory brand policy, a retailer brand policy and a mixed brand policy. A firm's choice depends on differences in demand and promotion costs between the proprietory and retailer brand markets. This can be analysed using a simple elaboration of the standard 3rd degree price discrimination model. But if the two markets are not independent over the long-term there may be other consequences of following the optimization rules of the model. If retailers develop consumers' preference for their own shops and their own brands, the demand advantage enjoyed by manufacturers' brands may be reduced further. The more willing are manufacturers to supply retailer brands, the more retailers win undermine the demand for manufacturers' proprietory brands.     

A quantitative approach to stakeholder interests

In an age when the role, behaviour and performance of the firm are under greater scrutiny than ever before, it is important to pursue quantitative empirical research in the area of social auditing. Using data relating to one particular company, the various inputs and outputs attributable to the firm's different stakeholders, (shareholders, employees, consumers and the community) are examined and corresponding rates of return calculated. Considerable methodological and data problems arise and consequently the results need careful interpretation.     

On Perennial Re-examination of the U.S. Constitution

Abstract . The United States Constitution is still shrouded in myths, clothed in broad terms and garbed with ambiguities. These require constant reinterpretation. If a continuing constitutional convention is thus endemic to the American political system, then is it, as Jefferson said, “a mere thing of wax in the hands of the judiciary”? Justice Jackson wrote that “we are infallible only because we are final,” but it is a maxim of American politics that the Court follows the election returns. In the last analysis, there is a higher court in a republican democracy, the Court of Public Opinion (of which scholars and publicists are the officers) which achieves revision by periodic reinterpretation and re-examination.     

OR vice: Forecasting and classification techniques for narcotics interdiction

Counternarcotics interdiction efforts have traditionally relied on historically determined sorting criteria or “best guess” to find and classify suspected smuggling traffic. We present a more quantitative approach which incorporates customized database applications, graphics software and statistical modeling techniques to develop forecasting and classification models. Preliminary results show that statistical methodology can improve interdiction rates and reduce forecast error. The idea of predictive modeling is thus gaining support in the counterdrug community. The problem is divided into sea, air and land forecasting, only part of which will be addressed here. The maritime problem is solved using multiple regression in lieu of multivariate time series. This model predicts illegal boat counts by behavior and geographic region. We developed support software to present the forecasts and to automate the process of performing periodic model updates. During the period, the model was in use at. Coast Guard Headquarters. Because of deterrence provided by improved intervention, the vessel seizure rate declined from 1 every 36 hours to 1 every 6 months. Due in part to the success of the sea model, the maritime movement of marijuana has ceased to be a major threat. The air problem is more complex, and required us to locally design data collection and display software. Intelligence analysts are using a customized relational database application with a map overlay to perform visual pattern recognition of smuggling routes. We are solving the modeling portion of the air problem using multiple regression for regional forecasts of traffic density, and discriminant analysis to develop tactical models that classify “good guys” and “bad guys”. The air models are still under development, but we discuss some modeling considerations and preliminary results. The land problem is even more difficult, and data collection is still in progress.