for whom the road tolls

How strong is the case for road pricing? Giles Keating, of Credit Suisse First Boston, argues the case for a comprehensive system of road pricing. It would reduce both congestion and the budget deficit by £16·5bn.     

Calculating a Standard Error for the Gini Coefficient: Some Further Results*

Several authors have suggested using the jackknife technique to approximate a standard error for the Gini coefficient. It has also been shown that the Gini measure can be obtained simply from an artificial ordinary least square (OLS) regression based on the data and their ranks. We show that obtaining an exact analytical expression for the standard error is actually a trivial matter. Further, by extending the regression framework to one involving seemingly unrelated regressions (SUR), several interesting hypotheses regarding the sensitivity of the Gini coefficient to changes in the data are readily tested in a formal manner.     

Testing for parameter stability in structural econometric relationships

This letter discusses CUSUM and CUSUM of squares tests for parameter stability in an equation which forms part of a structural simultaneous equations model.     

Restrictions on outward portfolio investment and domestic equity markets

Governments sometimes impose restrictions on local investors which effectively prevent them from purchasing overseas equities. Reasons for doing this, from the government's point of view, would include increasing the availability of risk capital to local companies and lowering its costs. The paper analyses this argument in terms of modern portfolio theory. It is shown that, under certain circumstances, domestic equities and overseas equities may be complements rather than substitutes. In this case the effect of the restrictions would be to lower prices on the domestic stock exchange and to raise the cost of risk capital to local companies. Indications are given of the circumstances in which this effect is likely to occur. Policy makers who are not aware of the risk-spreading motives which underly much international portfolio investment in equities are likely to overstimate the benefits to local industry from forcing local equity investors to keep their funds at home.     

General instrumental variables estimation under stochastic linear restrictions

This letter extends the Theil-Goldberger ‘mixed’ regression estimator, for models subject to stochastic linear restrictions, to the case of stochastic regressors. A general instrumental variables ‘mixed’ estimator is discussed. The asymptotic distribution of the estimator is obtained, and an asymptotic test of the compatibility of the sample and prior information is presented.     

Modelling the hidden economy and the tax-gap in New Zealand

This paper develops and estimates a structural, latent variable, model for the hidden economy in New Zealand, and a separate currency-demand model. The estimated latent variable model is used to generate an historical time-series index of hidden economic activity, which is calibrated via the information from the currency-demand model. Special attention is paid to data non-stationarity, and to diagnostic testing. Over the period 1968 to 1994, the size of the hidden economy is found to vary between 6.8% and 11.3% of measured GDP. This, in turn, implies that the total tax-gap is of the order of 6.4% to 10.2% of total tax liability in that country. Of course, not all of this foregone revenue would be recoverable, as not all of the activity in the underground economy is responsive to changes in taxation or other policies. First version received: August 1997/Final version received: March 1999     

A Multi-level Investigation of Authentic Leadership as an Antecedent of Helping Behavior

We develop and test a trickle-down model of how authentic leadership at the department level flows down the organizational hierarchy to encourage team leader authentic leadership and consequently, promotes team and individual-level supervisor-directed helping behavior. Analyses of multi-level and multi-source data collected from a total of 487 employees comprising 122 teams, 47 departments, and 4 different working areas of a major public sector organization in Taiwan show that team leaders’ authentic leadership mediates the relationship between departmental authentic leadership and individual-level leader–member exchange (LMX). We also found that intra-team trust completely mediates the influence of team authentic leadership on both team helping behavior and individual-level supervisor-directed helping behavior. Finally, the results reveal that self-concordance mediates the influence of team authentic leadership on individual-level supervisor helping behavior as well as the influence of individual-level LMX on individual-level supervisor-directed helping behavior. Theoretical and practical implications of these findings are discussed.     

Are Authentic Leaders Always Moral? The Role of Machiavellianism in the Relationship Between Authentic Leadership and Morality

Drawing on cognitive moral development and moral identity theories, this study empirically examines the moral antecedents and consequences of authentic leadership. Machiavellianism, an individual difference variable relating to the use of the ‘end justifies the means’ principle, is predicted to affect the link between morality and leadership. Analyses of multi-source, multi-method data comprised case studies, simulations, role-playing exercises, and survey questionnaires were completed by 70 managers in a large public agency, and provide support for our hypotheses. Our findings reveal that Machiavellianism offsets the positive relationship between moral reasoning and authentic leadership. Specifically, we show that when Machiavellianism is high, both the positive relationship between moral reasoning and authentic leadership, and the positive relationship between authentic leadership and moral actions, are reversed. This study offers new insights on the underlying processes contributing to the emergence of leaders’ authentic behavior and moral action. Implications for the moral development of leaders, and directions for improved leadership training are provided.