An econometric model of tenure choice and demand for housing as a joint decision

This paper models a household's choice of tenure and demand for housing services as a joint decision imposing the restriction that both discrete and continuous decisions are derived from a single preference ordering. The utility index for households is the translog form of the reciprocal indirect utility function allowing for random preferences. Each household chooses between the two main tenures, the owner-occupied and subsidised rental sectors, but households may be rationed in either or both of these sectors and refused admission, in which case they are assumed to enter the third sector, uncontrolled rental. The model is estimated on UK data for 5895 households.     

The Croatian profit tax: an ACE in practice

This paper discusses the experience of Croatia in applying, from 1994 to the beginning of 2001, a profit tax that was charged only on equity income in excess of an imputed normal return ‐ and was thus, in essence, an ‘Allowance for Corporate Equity’ (ACE) scheme of the kind advocated by the IFS Capital Taxes Group and others. The computation of taxable profit under this system is summarised, and the theoretical attractions of the system are described. The paper then discusses a variety of criticisms that were made of the system in Croatia, including an alleged bias in favour of capital‐intensive enterprises (and, in particular, large State‐owned enterprises with overvalued assets), international complications, the complexity of the computations of taxable profit, the possibility that the rate of protective interest was set at an inappropriate level, and excessive revenue cost.     

Incentive systems for food quality control with repeated deliveries: Salmonella control in pork production

This paper presents a dynamic principal-agent analysis of incentivesystems for Salmonella control. The European Union will requireSalmonella testing from 2008. On the basis of the producer'sperformance history in controlling Salmonella, the incentivesystems analysed determine quality premiums to the producer,testing frequencies for hogs delivered, as well as charges tothe producer for testing and penalties. Using cost estimatesand technical parameters, we evaluate two dynamic incentivesystems. We also assess the impact of ownership structure onperformance. The more efficient incentive system economiseson testing costs by reducing the probability of testing in responseto a favourable production history and is preferred under allownership structures.     

Prospects for developing absorptive capacity through internal information provision

Theories of absorptive capacity propose that knowledge gained from prior experience facilitates the identification, selection, and implementation of related profitable practices. Researchers have investigated how managers may develop absorptive capacity by building internal knowledge stocks, but few have focused on the distribution of this knowledge within the firm and the role managers play in administering information to organizational subunits. In this paper, we explore the degree to which managers can develop absorptive capacity by directly providing information to agents in the organization that might potentially adopt a new practice. We find that the effectiveness of managerial information provision depends on the degree to which potential adopters have information from other sources. We find that information from previous adopters and past events reduces the effect of information provision, while experience with related practices amplifies it. Our research helps clarify when absorptive capacity may provide a sustained competitive advantage. Copyright © 2004 John Wiley & Sons, Ltd.     

Entry and market share success of new brands in concentrated markets

Two hypotheses related to the concentration/entry issue were tested. Unlike previous studies that have approached the issue from the standpoint of the number of firms that enter concentrated versus relatively nonconcentrated industries, the concentration/entry issue was studied at the brand level. Specifically, two hypotheses were tested: 1) an inverse relationship exists between brand concentration and number of brand entrants, and 2) an inverse relationship exists between brand concentration and success of brand entrants. Whereas the results did reveal the existence of an inverse relationship between concentration and number of entrants, it was extremely weak. The second hypothesis that the market share success of new brand entrants is inversely related to brand concentration was not supported by test results.     

Computing policies and problems: A stage theory approach

Computing policies have been considered a major mechanism for reducing and preventing the emergence of problems in computing operations. The authors examine the relationship between computing policies and problems, and formulate a theoru of the interactions between problems, policies and commitment of resources for computing activity. The data presented are from an international comparative study of computing operations and impacts in 40 US and 16 other cities.     

NO CHOICE: REFORMING SOCIAL HOUSING IN ENGLAND

This paper considers the current and future prospects for social housing. It looks at the key issues of choice and affordability that dominate housing policy, how this links social housing to the dominant tenure of owner-occupation and how government has sought to control social housing allowing for a managed decline of the sector. The final part of the paper proposes some reforms which will introduce real choice into rented housing and empower low-income households. This, however, will necessitate the end of social housing as a distinct tenure.     

Box-Cox stochastic volatility models with heavy-tails and correlated errors

This paper presents a Markov chain Monte Carlo (MCMC) algorithm to estimate parameters and latent stochastic processes in the asymmetric stochastic volatility (SV) model, in which the Box-Cox transformation of the squared volatility follows an autoregressive Gaussian distribution and the marginal density of asset returns has heavy-tails. We employed the Bayes factor and the Bayesian information criterion (BIC) to examine whether the Box-Cox transformation of squared volatility is favored against the log-transformation. When applying the heavy-tailed asymmetric Box-Cox transformed SV model, three competing SV models and the t-GARCH(1,1) model to continuously compounded daily returns of the Australian stock index, we find that the Box-Cox transformation of squared volatility is strongly favored by Bayes factors and BIC against the log-transformation. While both criteria strongly favor the t-GARCH(1,1) model against the heavy-tailed asymmetric Box-Cox transformed SV model and the other three competing SV models, we find that SV models fit the data better than the t-GARCH(1,1) model based on a measure of closeness between the distribution of the fitted residuals and the distribution of the model disturbance. When our model and its competing models are applied to daily returns of another five stock indices, we find that in terms of SV models, the Box-Cox transformation of squared volatility is strongly favored against the log-transformation for the five data sets.     

The Role of Undertakings in Regulatory Decision-Making

The Australian Competition and Consumer Commission (ACCC) has powers under the Trade Practices Act 1974 (Cwlth) to accept undertakings from industry participants interested in taking actions, such as mergers, that may potentially be anticompetitive. This paper analyses the role of undertakings, focusing on horizontal mergers. We demonstrate that undertakings can provide an imperfectly in-formed regulator with a credible signal of the positive social benefits of a proposed merger. In particular, if the merged parties undertake not to reduce their output following the merger, then the merger will only be proposed if it results in net social benefits. We discuss the practical issues of implementing a behavioural undertaking such as a minimum quantity commitment, and argue that these are no less difficult than other regulatory activities currently pursued by the ACCC.