The Lifetime Distributional Impact of Government Health Outlays

This article examines the lifetime redistributive impact of government health outlays and finds that such outlays redistribute income from the lifetime rich to the lifetime poor and from men to women.     

Interpretive structural modeling—A useful tool for technology assessment?

Interpretive Structural Modeling (ISM) is a computer based technique for helping small groups develop graphical representations of complex systems. In this paper, the rationale for the use of Interpretative Structural Modeling in activities such as technology assessment is developed and the basic concepts underlying the technique are explored. Several applications of ISM are described and from these experiences some observations are made about the nature and effectiveness of the ISM process and product. ISM was found to provide its users with a systematic and comprehensive method for integrating group judgments in the development of “first-cut‘ structural models. At the same time, however, the technique was found to be relatively inflexible and may, in some instances, inhibit group processes. Possible directions for the development of less rigid methods are suggested.     

Corporate financial structure and the funding of private pension plans

One strand of the literature on the employment contract focuses on the role of the contract in the efficient sharing of risk between capitalists and workers. One way capitalists can shift risk to workers is to provide part of workers' remuneration in the form of an unfunded, deferred pension. Since bonds, in the event of bankruptcy or voluntary termination, are typically senior to unfunded pension liabilities, capitalists can also affect their risk by altering the firm's debt-to-equity ratio. These observations suggest that corporate financial structure and the employment contract are interdependent. The paper has two major goals. The first is to take a step towards integrating the theory of corporate financial structure with that of the employment contract. The second is to investigate possible consequences of legislation which regulates the funding of private pensions.     

Measurement of English farming technological change, 1523–1900

I have argued that for the period from 1661 to 1850, patent data in England were consistent in that no official changes in methods and standards of issuance occurred. Book data on titles published on farming production methods were similarly consistent from 1523 to the mid-19th century because the market for books developed gradually and the technology of printing was not substantially changed until the mid-19th century.My main point is that data on output of titles of books on farming productive techniques in England are useful measures of technological change. Books did have information on good production methods and could express productive ideas where a patent may not be issued. Further, the literacy rate of farmers was high so that books were likely an important source of ideas on farming production methods. Finally, the fluctuations in the book data were highly related to the fluctuations in the patent data, suggesting that a common set of factors caused those fluctuations. The high correlations between the detrended book and patent data indicate that if we accept patenting as a useful measure of technology we may also accept book title output of a technical nature as a good measure of technical change.I used the data for a simple analysis of the trend growth rate of agricultural technology in England from 1551 to 1850. While there is limited evidence to show that the subperiod 1651–1750 saw a slowing in the trend of development of farming technology, I argue that a division of the entire period into subperiods is too simplistic. A more fruitful approach would be an analysis of the underlying forces that determined the trend of development of the technology of English agriculture.The next step is an analysis of the forces that influenced technological development of English farming. From an economic point of view, market forces play an important role in influencing technology. Because such an analysis deserves careful consideration, I leave that to another paper (see Sullivan and Simon, 1983).     

Assessing introduction factors for a new industrial product

The present research involves determinant component analysis [3]. Specifically, the study assesses which components—price, product or environmental—are most important in the design of new entry strategy. Under conditions of abundance, industrial firms primarily analyzed price and product characteristics when making new product decisions. In choosing one supplier over another the stalwart buying motives have been quality, service and price [4]. However, these decision components were conceptualized in a period of abundance. Under conditions of scarcity, are price and product characteristics still important? Are environmental dimensions perhaps more important under shortage conditions when making new product decisions? Besides describing the key components that may be considered in new product programming, the article also outlines an approach that may be used to find determinant decision components.     

Exclusive Contracts And Market Power: Evidence From Ocean Shipping

There is a substantial theoretical literature on the potential effects of loyalty contracts, but relatively little empirical work. We employ the event study methodology to examine the competitive effects of exclusionary contracts in the ocean shipping industry, where they were the subject of an extended legal and political struggle. We find that some of the most important events in this conflict caused significant changes in shipping firms' stock returns, indicating exclusive contracts increased their profits. We then examine the effect of these events on net exporting industries' stock returns, and provide evidence that these contracts contributed to carriers' market power.     

Policy-Induced Technology Adoption: Evidence from the U.S. Lead Phasedown

Theory suggests that economic instruments, such as pollution taxes or tradable permits, can provide more efficient technology adoption incentives than conventional regulatory standards. We explore this issue for an important industry undergoing dramatic decreases in allowed pollution – the U.S. petroleum industry's phasedown of lead in gasoline. Using a duration model applied to a panel of refineries from 1971–1995, we find that the pattern of technology adoption is consistent with an economic response to market incentives, plant characteristics, and alternative policies. Importantly, evidence suggests that the tradable permit system used during the phasedown provided incentives for more efficient technology adoption decisions.     

Confirming Management Earnings Forecasts, Earnings Uncertainty, and Stock Returns

In this study we examine the association among confirming management forecasts, stock prices, and analyst expectations. Confirming management forecasts are voluntary disclosures by management that corroborate existing market expectations about future earnings. This study provides evidence that these voluntary disclosures affect stock prices and the dispersion of analyst expectations. Specifically, we find that the market's reaction to confirming forecasts is significantly positive, indicating that benefits accrue to firms that disclose such forecasts. In addition, although we find no significant change in the mean consensus forecasts (a proxy for earnings expectations) around the confirming forecast date, evidence indicates a significant reduction in the mean and median consensus analyst dispersion (a proxy for earnings uncertainty). Finally, we document a positive association between the reduction of dispersion of analysts' forecasts and the magnitude of the stock market response. Overall, the evidence suggests that confirming forecasts reduce uncertainty about future earnings and that investors price this reduction of uncertainty.