The Expanding Concept of Just Compensation and the Role of the Appraiser

Compensation for injury to business profits in eminent domain actions has long been the focus of controversy. Historically, the federal and state courts explicitly excluded profits or goodwill from a determination of an award. Under this scheme the measure of compensation quickly settled on the market value of the condemned realty. Where injury to profits was especially evident, the courts sometimes allowed future returns to the business to be included as a factor which would influence the market value. They also developed, in some states, the "specialty" doctrine where the business was unique in any number of ways. Still, the measures of compensation adopted in these cases may have been inadequate to return the business owner to the same financial position as before a taking.
In this paper, we review an expanded theory of just compensation currently emerging in the courts and indicate the measure of compensation necessary to effectively return the business owner to the same financial position after a taking as before. We also show that traditional awards have been less than adequate in cases where the cash flows accruing to a business are dependent, in some fashion, on the expropriated realty.
Finally, we indicate the nature of awards under a jurisdiction which is unique in the sense that it explicitly requires consideration of all elements of loss resulting from expropriation of business properties. Those awards represent a departure from previous compensation measures and conform to those indicated by the theory developed in this paper. The role of the appraiser is outlined under this expanded system of compensation.     

Productivity and the nature of work

It is argued that in approaching the issue of Canada's competitiveness in finished products and services internationally, a singular focus on productivity may be but a symptom of more serious underlying problems. Examples of such problems are provided and the implications and ethical concerns resulting from the probable technical solutions utilized to improve productivity are explored. Terrence H. White is Professor and Dean at the Faculty of Arts, The University of Alberta. He formerly held a Chair at the Department of Sociology, University of Alberta and was Head of the Department of Sociology and Anthropology at the University of Windsor. His most important publications are: Power or Pawns: Boards of Directors in Canadian Corporations (CCH, Toronto, 1978) and Production Workers and Perceptions of Intraorganization Mobility, Sociological Inquiry 44 (2), 121–129.     

Island Goes Dark: Transparency, Fragmentation, and Regulation

Responding to a September 2002 regulatory enforcement, the Islandelectronic communications network stopped displaying its limitorder book in the three most active exchange-traded funds (ETFs)where it was the dominant venue. Island’s share of tradingactivity and price discovery fell, fragmenting the market. ETFprices adjust more slowly when Island goes dark, and there issubstantial price discovery movement from ETFs to the futuresmarket. Trading costs increase on Island and decrease off Island,with higher trading costs overall. When Island later redisplaysits orders, market quality improves, with transparency and thereduction in fragmentation both playing important roles.     

Price Discovery and Trading After Hours

We examine the effects of trading after hours on the amountand timing of price discovery over the 24-hour day. A high volumeof liquidity trade facilitates price discovery. Thus pricesare more efficient and more information is revealed per hourduring the trading day than after hours. However, the low tradingvolume after hours generates significant, albeit inefficient,price discovery. Individual trades contain more informationafter hours than during the day. Because information asymmetrydeclines over the day, price changes are larger, reflect moreprivate information, and are less noisy before the open thanafter the close.     

The Split of the S&P 500 Futures Contract: Effects on Liquidity and Market Dynamics

The Chicago Mercantile Exchange reduced the size of its S&P 500 futures contract when it reduced the multiplier from 500 to 250 and increased the minimum tick from 0.05 to 0.10 on November 3, 1997. This is a rare major change in a very successful contract's specifications. We analyze effects of this change on liquidity and market dynamics in both a univariate and a multivariate context. The main contribution of this study is the use of multiple intervention analysis with various dynamic response functions to examine the effects of the split while taking into account several other major market events surrounding it. A multivariate analysis is also used to test the impact of the split using a structural model of liquidity and market dynamics. Empirical findings offer limited support for the hypotheses that smaller contract size resulted in smoother trading, and that more public customers trade the S&P 500 futures contract following its split. We observe a reduction in the average transaction size as well as a temporary narrowing of the bid-ask spreads, but no significant change in volatility that can be attributed to the split. We do not find any significant and lasting impact on other liquidity and market variables.     

Changing the Size of a Futures Contract: Liquidity and Microstructure Effects

We analyze the relation between contract size and liquidity using data from the respecification of Sydney Future Exchange's (SFE) Share Price Index (SPI) and 90-day Bank Accepted Bill (BAB) futures contracts. Respecification of SPI and BAB contracts presents a unique opportunity to investigate the effects of a change in futures contract size. SFE decreased the size of SPI futures by a factor of four while increasing its minimum tick. The BAB contract was doubled in size with the minimum tick size left unchanged. We find, after controlling for market factors, that the respecification of the SPI futures resulted in higher trading volume, while that of BAB futures decreased trading volume. The results regarding spreads are ambiguous. Based on two cases investigated, we conclude that decreasing the futures contract size was effective in terms of enhancing liquidity while increasing the size resulted in a reduction in liquidity.     

CT appearance of calcified tumor thrombus in the inferior vena cava

We report the unusual occurrence of calcined tumor thrombus in the inferior vena cava (IVC) in a patient with renal cell carcinoma diagnosed by computed tomography (CT).     

A note on refinancing costs,prepayment assumptions,and the value of mortgage-backed securities

This article analyzes the effect and timing of the FHA's streamline refinance program on the value of GNMA 15s. The program announced in March 1989 reduced the refinancing costs for those mortgages of 15 percent and above. The program is expected to reduce the value of GNMA's. The authors find a reduction of .47 to 3.40 points in the value of GNMA 15s during the 3-week to 13-week period following the announcement of the plan. The drop in value translates into a wealth loss for GNMA 15 holders of about $20 million over this time.     

A Note on Mortgage Risk: Default vs. Loss Rates

This note reexamines the role of the loan-to-value ratio on mortgage risk. Whereas previous studies have focused on the default rate as a function of this term, this study considers the additional effect on the loss rate of defaulted loans. Because the dollar loss per amount originated is the product of the default rate and the loss rate on defaulted loans, the impact of the loan-to-value ratio on both the default and loss rates is crucial to explaining the impact of the loan-to-value ratio on mortgage risk. I find that both rates are significantly positively related to loan-to-value ratio and that the loss rate accounts for between 13% and 20% of total loan-to-value impact.