Interstate banking and the payments system

Interstate banking will improve the efficiency of the payments system. This will occur because the number of handlings for multiple-bank payments (transit items) will fall and because some multiple-bank payments will be transformed into single-bank payments (on-us items). These effects are simulated using data on the current cross-section relationship between banking structure and check clearing patterns in a multinomial logit model. The Federal Reserve, which currently processes almost one-third of all checks, is predicted to lose 43 to 60 percent of its market share. The annual impact is expected to be gradual, however, since interstate banking will be phased in and because of offsetting growth in the total check clearing market.     

CHARGING FOR ROADS

The article discusses two theoretical methods of measuring roaduse costs and designing a system of road user charges. The firststates that road damage externalities are zero and road damagecosts are equal to the traffic-related fraction of maintenanceexpenditure. The second states that, with constant returns andoptimal road capacity, congestion charges should recover theremaining total overhead costs. Vehicles should be charged thesecosts, and additional pure taxes on passenger vehicles shouldbe guided by principles of indirect taxation. Although roaduser charges alone may fail to cover the total highway budget,the additional pure taxation is likely to more than cover theshortfall. The article argues that an appropriate system oftaxes and charges can be devised to meet these requirementswithout adversely effecting the rest of the economy.      

Strategic participation and the median voter result

In a seminal paper on electoral equilibrium under majority rule, Ledyard (1984) demonstrates that strategic participation by voters results in an electoral equilibrium at the proposal that maximizes the utility of a randomly selected voter. Palfrey and Rosenthal (1985) limit the usefulness of this result by showing that strategic participation rates are miniscule in large electorates, and that the incentive to participate vanishes completely as the electorate grows without bound. The most reasonable modification of Ledyard’s approach that circumvents these criticisms is to allow for a negative cost of voting. We show that when voters can have even an arbitrarily small negative cost of voting, there is an electorate sufficiently large so that any proposal is defeated or tied by the median proposal. This observation raises questions about the existence of electoral equilibrium under strategic participation, and is relevant to the efficiency of elections.     

Major league baseball division standings,sports journalists' predictions and player salaries

This paper analyzes the accuracy of predictions of division baseball winners and rankings for the 1982 to 1990 seasons. The forecasts in Sport, Sports Illustrated and the New York Times are more accurate than purely random forecasts except at predicting the National League winners. The journalists are better at predicting division winners, but not division rankings, than a naive model that assumes this season's rankings, will be the same as last seasons's. Combining the forecasts in the three publications does not result in greater forecasting accuracy. A model that uses the relative average salaries of teams significantly outperforms the journalists at predicting division rankings and, when allowance is made for ‘George Steinbrenner effect’, also at predicting division winners.     

Are employers pursuing value-based purchasing?

Some employers have begun to undertake a variety of initiatives, collectively termed value-based purchasing (VBP), which aim at factoring quality into the purchasing decision-making process when negotiating costs with providers and insurers. There is evidence that the VBP movement has begun gaining momentum; yet it is unclear whether employers are firmly committed to VBP principles. By surveying a national sample of employers, this study investigates the extent to which employers are currently engaged in VBP activities and also increases our understanding of barriers hampering the broader implementation of these activities.