Do we now collect any revenue from taxing capital income?

The U.S. income tax system has long been recognized as a hybrid of an income and consumption tax system, with elements that do not fit naturally into either pure system. What it actually is has important policy implications for, among other things, understanding the impact of moving closer to a pure consumption tax regime. In this paper, we examine the nature of the U.S. income tax system by calculating the revenue and distributional implications of switching from the current system to one form of consumption tax, a modified cash flow tax.     

Law and finance: why does legal origin matter?

This paper assesses empirically two theories of why legal origin influences financial development. The political channel stresses that legal traditions differ in the priority they give to the rights of individual investors vis-à-vis the state and this has repercussions for financial development. The adaptability channel holds that legal traditions differ in their ability to adjust to changing commercial circumstances and legal systems that adapt quickly will foster financial development more effectively. We use historical comparisons and cross-country regressions to assess the validity of these two channels. We find that legal origin matters for financial development because legal traditions differ in their ability to adapt efficiently to evolving economic conditions. Journal of Comparative Economics 31 (4) (2003) 653–675.     

The philosophical contributions of Ludwig von Mises

This paper was prepared for consideration for a Ludwig von Mises prize that was awared at the Mises Institute's 10th anniversary conference, October 9–11, 1992. I am grateful to Pat Heckman and Ralph Raico for their very helpful suggestions.     

Taxation and the stock market valuation of capital gains and dividends: Theory and emphirical results

Dividends seem to be more heavily taxed than capital gains. Why then do corporations pay dividends rather than repurchasing shares or retaining earnings? Either corporations are not acting in the interests of shareholders, or else shareholders desire dividends sufficiently for nontax reasons to offset the tax effect.In this paper, we measure the relative valuation of dividends and capital gains in the stock market, using a variant of the capital asset pricing model. We find that dividends are not valued differently systematically from capital gains. This finding is consistent with share price maximization by firms but inconsistent with the fact that most shareholderspay a heavier tax on dividends.We also show that the relative value of dividends provides an indirect measure of a marginal Tobin's q. The measured value of dividends relative to capital gains tends to be higher during prosperous periods, as is consistent with this interpretation. We hope that this time series on a marginal Tobin's q will prove to be useful in forecasting the rate of investment.     

Elasticity estimates of farmed salmon demand in Spain and Italy

In this paper, estimates of the elasticities that characterize the structure of demand for farmed salmon in Spain and Italy are reported. The demand models are specified using a Box-Cox transformation of the variables and a Hausman test is used to determine price endogeneity in the demand equations. The results show short-run unitary own-price elasticity of demand for farmed salmon in both markets, but long run estimates show significant elastic price response. Short run substitution of salmon for other fish species is not observed and, for both Spain and Italy, farmed salmon is characterized as a luxury good. Interestingly, we show that our a priori expectations about own-price elasticities being lower in smaller market areas is confirmed. Finally, the results obtained are compared to other recent results reported in the salmon demand literature.     

The Risk Structure of Land Markets

Real property as an asset class represents over half of the wealth in the United States. Nevertheless, the structure of risk in real property markets is poorly understood. This paper develops a model of urban and agricultural land prices that integrates spatial and asset pricing theories and characterizes the spatial and temporal risk structure of the land market. Urban land is priced by a CAPM and agricultural land is priced by a real option to convert into urban land. We show that the price of land awaiting conversion increases with the growth rate of urban rents and unsystematic risk but decreases with risk aversion. However, it may be increasing or decreasing in systematic risk. The free boundary for exercise determines city size, which increases with the growth rate of urban rents but decreases with systematic and unsystematic risk.     

The market reaction to announced deep cuts in capital expenditures

The objective of the study reported in this paper was to examine the role of deep cuts in capital expenditures as a firm's strategy for becoming more efficient and, in turn, more competitive. Based on an empirical study, support is provided for the argument that deep cuts in capital expenditures may be a viable strategy for realigning corporate priorities toward a more efficient operation. The measure of performance utilized in this paper is the stock market reaction to announced deep cuts.     

制服制造商——平衡记分卡缝出的成功

平衡记分卡(BSC)可以帮助组织关注战略和测量效率。通过将不同方面的业务和关键要素及职能联系在一起,平衡记分卡方法可以帮助找到有价值的建议和方案。一家制造商通过实施平衡记分卡,克服了因业务迅速扩张带来的障碍。