THE EQUAL ABSOLUTE SACRIFICE PRINCIPLE REVISITED

Abstract.  We summarize the literature on equal absolute sacrifice income taxes, and make some extensions. We adapt the utilitarian equal sacrifice criterion to a wide class of rank-dependent social welfare functions, and find that liabilities depend on both income and position in the distribution. We investigate whether such taxes need be progressive, using a combination of analytics and simulation, and in the process uncover tax functions not previously recognized as equating sacrifices. Finally, out of horizontal equity considerations a new concept of 'the equal treatment of equals' by an income tax emerges, with implications for future work whose significance is discussed.     

THE FUTURE OF THE NEWS IN THE DIGITAL ERA

Technical developments in the field of journalism and broadcasting are changing the shape of both media. Many of these developments are very welcome. However, there is a danger that the quality of journalism may fall and that part of society may disengage from news coverage. This may require a policy response but not necessarily the continued support of a single state-funded public service broadcaster.     

Consumers' Valuation of Functional Properties of Foods: Results from a Canada-wide Survey

Very few economic analyses have been done about functional foods and nutraceuticals. The current paper seeks to characterize Canadian consumers' attitudes, beliefs, knowledge and willingness‐to‐pay for functional foods. In the spring of 2001, a telephone survey of 1008 Canadian household food shoppers was conducted. The questionnaire included stated‐choice experiments to derive distributions of price‐functional property trade‐offs. The majority of respondents appeared willing to purchase and to pay a price premium for functional foods, particularly if the functional property were added to foods derived from plants. Consumers were less receptive to a functional property incorporated in a meat product. A large proportion of respondents negatively perceived genetically modified (GM) and organic foods relative to conventional foods, after controlling for price and the health property. This suggests that there could be a niche market for organic functional foods and that GM functional foods would have to be discounted to attract a wide range of consumers. Peu d'études ont été réalisées sur les aliments fonctionnels et les nutraceutiques. Notre papier a pour but de caractériser les attitudes, les croyances, les connaissances et la volonté des consommateurs canadiens de payer plus cher pour des aliments fonctionnels. Un sondage téléphonique fut administré auprès de 1008 répondants à trovers le Canada. Des expériences amenant les répondants àénoncer leur préférences en faisant des choix de produits ont été réalisées pour générer les distributions des compromis entre les prix et les propriétés fonctionnelles. La majorité des répondants sontprêt á payer des suppléments pour des propriétés fonctionnelles, surtout si celles‐ci sont ajoutées a des produits dérivés des plantes. Les répondants semblent mains réceptifs aux propriétés ajoutées à de la viande. Une proportion élevée de répondants entretiennent des perceptions négatives des aliments GM et organiques, relativement aux produits conventionnels après avoir contrôlé pour les prix et les propriétés fonctionnelles. Ceci suggère qu'il y aurait un marché niche pour les aliments fonctionnels organiques et que les aliments fonctionnels GM devraient être réduits en prix pour attirer une vaste clientele.     

Balancing Performance Measures

This paper uses an agency theory model in which the agent's actions are multi-dimensional to analyze the optimal weights to apply to performance measures in a compensation contract. We show how the optimal contract trades off the congruity of the overall performance measure with the desire to minimize the risk imposed upon the agent. In contrast to the single action case, we find that an increase in the sensitivity of a performance measure to an agent's action does not necessarily increase the weight placed on that performance measure, even if that measure is perfectly congruent with the firm's outcome.     

Attitudes to risk

Diamond and Stiglitz' approach to defining increased risk is developed, and partial orderings emerge which are closely connected with the risk orderings of Meyer. The new orderings are related to behaviour at the extremes of risk aversion and risk loving.     

MEASURING PRO-POORNESS: A UNIFYING APPROACH WITH NEW RESULTS

Recent economic literature on pro-poor growth measurement is drawn together, using a common analytical framework which lends itself to some significant extensions. First, a new class of pro-poorness measures is defined, to complement existing classes, with similarities and differences which are fully discussed. Second, all of these measures of pro-poorness can be decomposed across income sources or components of consumption expenditure (depending on the application). This permits the analyst to "unbundle" a pattern of growth, revealing the contributions to overall pro-poorness of constituent parts. Third, all of these pro-poorness measures can be modified to measure pro-poorness at percentiles. An application to consumption expenditures in Indonesia in the 1990s reveals that the poverty reduction achieved remains far below what would have been achieved under distributional neutrality. This can be tracked back to changes in expenditure components.     

Using cross-functional,cross-firm teams to co-create value: The role of financial measures

Increasingly, the involvement of representatives from all major business functions in cross-functional, cross-firm teams is being viewed as a means to develop and maintain profitable business-to-business relationships. However, if the measurements of the value co-created in these relationships with customers and suppliers do not incorporate the financial outcomes of joint cross-functional initiatives, managers can be led to make decisions that jeopardize the long-term profitability of the two firms. In this paper, the authors explore the differences in value co-creation when a company is linked to key customers and key suppliers through cross-functional teams and when it is not. Using a case study approach, the authors measured value co-creation in financial terms and describe how managers changed their behaviors toward customers and suppliers when they were able to compare the value that was being co-created in each relationship. In each pair of relationships, one involved cross-functional teams and the other did not. The results indicate that cross-functional, cross-firm involvement leads to increased value co-creation. The research suggests that marketing scholars and managers should emphasize the use of cross-functional teams that involve all major functions to manage relationships with key customers, and should incorporate financial measures in the evaluation of relationship performance.