THE LOCATION OF NONMETROPOLITAN HIGH-TECH INDUSTRIES: A Comparison of Regional Determinants

A study of the location of three classifications of high-tech industries in rural areas was undertaken using ordinary least squares, Tobit, and a two-step estimation procedure suggested by Heckman (1976). The results indicate that the location decision for high tech firms is influenced primarily by the county population, adjacency to an SMSA, and the expenditures on public infrastructure (exclusive of education expenditures). However, location near interstate highways was generally not a significant factor. Results were similar between branch and unit (single ownership) plants. Some differences in signs of orders of magnitude occurred among the estimation procedures. Making a choice between Tobit and Heckman approaches depends upon the goal of the research.     

Optimal Collective Investment in Generic Advertising, Export Market Promotion and Cost-of-Production-Reducing Research

Optimal investment rules are developed for a producer agency investing in domestic-market generic advertising, export market promotion, and cost-of-production-reducing research. These rules are derived assuming either maximization of producers' surplus or social surplus. The form of the optimality rules differs according to which objective is pursued. Fixed producer agency budgets are also allowed by incorporating a constraint limiting total expenditure on the three activities. Addition of such a constraint substantially alters the structure of the optimal investment rules. Differences in these rules highlight the importance of accounting for the financing mechanism when modeling optimal checkoff fund investment decisions. Optimality rules are simulated using data for the Canadian beef sector. Results suggest historic underinvestment in domestic-market generic advertising but overinvestment in export market promotion. Sensitivity of simulation results underscores the difficulty in assessing optimality of historic producer investment in cost-of-production-reducing research.     

The Structural Relation Between Mortgage and Market Interest Rates

This paper analyzes the dynamic relationship between primary and secondary mortgage markets and the short-term and long-term market interest rates. Using a series of monthly data on fixed rate mortgage rates and GNMA rates, we explore the dependence and speed of adjustment in these primary and secondary mortgage rates to each other as well as to the long and short-term government rates. The results indicate that residential mortgage rates in general, appear to follow the long-term rate and are not very sensitive to movements in the short-term interest rate.     

Diversification Categories in Investment Real Estate

This paper continues previous work evaluating the benefits of diversification and analyzes the various dimensions within the commercial real estate opportunity set. The database is large and extends through the 1982 downturn in property values. Due to the low levels of systematic risk, current distinctions by region and property type make little sense in a world of costly diversification. More exacting categories combining property type, SMSA growth rate and lease maturity offer promise for more efficient diversification within the real estate portfolio.     

Early evidence of an adverse selection death spiral? The case of Blue Cross and Blue Shield

This paper uses a unique data set from 1957 to examine whether or not Blue Cross and Blue Shield suffered from an adverse selection death spiral after for-profit commercial insurance companies entered the market for health insurance. Results suggest that moving to experience rating may have helped the Blues counteract adverse selection in the group health insurance market. Adverse selection posed a greater problem for the Blues in the market for individual health insurance, possibly because of differences in the way the Blues screened potential enrollees relative to commercial insurance companies.     

Teams,Teamwork and Absence*

We argue that firms with interdependent worker productivity, team production, have a higher cost of absence and, as a consequence, spend additional resources on monitoring absence. As a result, firms with team production should have lower absence rates. We estimate the determinants of absence for blue‐collar workers using a sample of German manufacturing establishments. Workplace teams are used as a proxy for team production. The estimates reveal that firms with teams have lower absence rates, as do smaller establishments. The size effect, however, is unique to establishments with teams, which fits prior theoretical work that has not been previously tested.