Association Between Borrower and Lender State Ownership and Accounting Conservatism

We examine the association between borrower (firm) and lender (bank) state ownership and accounting conservatism for a sample of Chinese firms. We hypothesize that state‐owned enterprises (SOEs) adopt less conservative accounting than non‐state‐owned enterprises (NSOEs) because lenders are less concerned with downside risk for SOEs than for NSOEs. We also hypothesize a negative relation between conservatism and the fraction of total loans a firm borrows from state‐owned banks (SBs) because SBs have weaker demand for assurance of sufficient net assets to cover loan repayments than non‐state‐owned banks (NSBs). We find support for both hypotheses. Further analyses reveal that: (1) firms that borrow from commercial SBs exhibit more conservative accounting than firms that borrow from policy SBs and (2) firms adopt more conservative accounting as they get more loans from banks with foreign ownership or exclusively foreign banks. However, the results of these additional analyses are to some extent sensitive to alternative measures of accounting conservatism.     

THE RELATIONSHIP BETWEEN ILLEGAL DRUG PRICES AT THE RETAIL USER AND SELLER LEVELS

This article uses 1985–2000 DEA data on marijuana and cocaine prices in various metropolitan areas to empirically test two contrasting theories of the relationship between illegal drug prices at the retail seller and user levels. Regression results overwhelmingly reject a multiplicative model in which the ratio of prices at the two levels is constant, but strongly support an additive model in which the difference between these prices is constant. This finding reduces the attractiveness of policies aimed at raising wholesale prices, because retail price responses, and thus potential drug demand deterrence, would be substantially smaller than commonly assumed. (JEL D40 , I18 , K42 )     

Earnings Inequality in Australia: Changes, Causes and Consequences

This article reviews research on recent developments in earnings inequality in Australia. Four main issues are addressed. First, what are the main changes in earnings inequality which have occurred? Second, what do we know about the causes of changes in earnings inequality? Third, how have earnings differentials between workers in different skills groups changed, and to what extent can those changes be explained by shifts in the relative demand for labour and relative supply of labour by level of skill? Fourth, how have changes in earnings inequality affected the distribution of income?     

The Emergence of Biometrics and Its Effect on Consumers

Biometric authentication systems are becoming increasingly common. Though their use offers important advantages to governmental agencies, business, and consumers, the widespread use of biometric technology has the potential for serious negative consequences. In this paper, the authors explore the effects on consumers of the incorporation of biometric authentication into mainstream commerce, specifically focusing on privacy concerns of consumers in the context of the fair information practice principles of notice/awareness, choice/consent, access/participation, integrity/security, and enforcement/redress.     

Values and Markets: an Analysis of Organic Farming Initiatives in Andalusia

This article sets out the overlapping political and cultural roots of an innovative farming co‐operative in Andalusia, one composed of both ex‐labourers and small farmers. One strand of values involves the realization of a food chain in which no capitalist enterprise can extract profit from their labours: this, together with various conceptions of personal and local autonomy, shapes much of their practice of organic farming. Nevertheless, their labour has to generate an acceptable livelihood through selling food in an environment dominated by large‐scale commercial agriculture in both the ‘conventional’ and ‘organic’ sectors. The article explains how they achieve this by building ties with consumers around a variety of shared values. This focus on the particularities of a radical food movement sheds light on many larger issues, both the nature of markets and competition in the dominant economy, and the debates about organic certification and ‘conventionalization’.     

GROWTH AND FAILURE OF MANUFACTURING ESTABLISHMENTS IN AUSTRALIA*

This study examines the determinants of failure and employment growth for manufacturing establishments in Australia between 1984 and 1985. For the sample of all establishments which operated in 1984, initial size of establishment is found to be inversely related to the probability of establishment failure and positively related to the establishment-level rate of employment growth. However, excluding establishments which ceased operation between 1984 and 1985, no relation exists between size of establishment and employment growth. These findings indicate the importance of sample selection for studies of the determinants of establishment-level employment growth. Industry sector does not appear to have a strong effect on failure or on employment growth of establishments.     

Using Coupon Incentives in Recycling Aluminum: A Market Approach to Energy Conservation Policy

A field experiment was conducted on a stratified sample of 354 recyclers and nonrecyclers to test the effects of coupon incentives on consumers' intentions and behavior in recycling aluminum. Results indicate that modest coupon incentives positively influenced recyclers' behavior, but did not influence nonrecyclers. Over the range of incentives tested, evidence suggests that increased recycling frequency is directly related to the coupon value. Implications for incorporating coupon promotional programs into the development of energy conservation policy, and areas for future research are discussed.     

FEASIBLE CROSS-VALIDATORY MODEL SELECTION FOR GENERAL STATIONARY PROCESSES

Cross-validation is a method used to estimate the expected prediction error of a model. Such estimates may be of interest in themselves, but their use for model selection is more common. Unfortunately, cross-validation is viewed as being computationally expensive in many situations. In this paper it is shown that the h-block cross-validation function for least-squares based estimators can be expressed in a form which can enormously impact on the amount of calculation required. The standard approach is of O(T²) where T denotes the sample size, while the proposed approach is of O(T) and yields identical numerical results. The proposed approach has widespread potential application ranging from the estimation of expected prediction error to least squares-based model specification to the selection of the series order for non-parametric series estimation. The technique is valid for general stationary observations. Simulation results and applications are considered. © 1997 by John Wiley & Sons, Ltd.     

Incorporation and Resistance: Analytical Issues in the Conventionalization Debate and Alternative Food Chains

This article examines arguments about the relationship between mainstream agriculture and alternative food chains. It begins with a summary of Guthman's study of organic agriculture in California and her conclusion that it has come to resemble conventional, industrial agriculture in its agrarian structures and its supply chains. The article raises questions about both the evidence that smaller alternative producers have been squeezed out, and the assumptions underlying the analysis of relations between capitalist and non-capitalist forms. The issues are contextualized through a summary of earlier debates about the fate of non-capitalist producers in the 'development' process, and through reference to studies in economic anthropology, including research on household farming strategies in Italy. The article concludes that alternative food chains do not follow a simple linear trajectory, and that we need to include an ethnographic approach to understand both their economic values and political objectives.     

MEASURING THE IMPACT OF VALUING HEALTH INSURANCE ON LEVELS AND TRENDS IN INEQUALITY AND HOW THE AFFORDABLE CARE ACT OF 2010 COULD AFFECT THEM

A substantial part of the U.S. inequality literature focuses on yearly levels and trends in pre‐tax, post‐transfer cash income and its distribution over time and finds that median income appears to be stagnating, with income growth primarily coming at higher income levels. When we use data from the Current Population Survey for 1995–2008 and add the value of employer‐ and government‐provided health insurance coverage, not only does it increase the upward trend in the level of resources controlled by Americans, but also reduces the level of inequality in these resources and its upward trend. We then provide a highly stylized example of this broader income measure's value in capturing the impact of two key provisions of the Affordable Care Act of 2010—an expansion in Medicaid and the provision of subsidies to lower‐income families for purchasing private coverage on state‐run exchanges. Even though these incremental expansions build on existing systems of government‐provided health insurance, we find that the vast majority of the benefits would still accrue to the bottom three deciles of the income distribution when we include the value of employer‐ and government‐provided health insurance in our expanded yearly income measure. (JEL D31, H51, I14)