The Economic Value of Water Quality

Stated preference values for water quality ratings based on the US Environmental Protection Agency National Water Quality Inventory ratings provide an operational basis for benefit assessment. Iterative choice survey results for a very large, nationally representative, Web-based panel imply an average valuation of $32 for each percent increase in lakes and rivers in the region for which water quality is rated “Good.” Valuations are skewed, with the mean value more than double the median. Sources of heterogeneity in benefit values include differences in responses to average water quality information and the base level of water quality. Conjoint estimates are somewhat lower than the iterative choice values. The annual economic value of the decline in inland US water quality from 1994 to 2000 is over $20 billion.      

Payments or Persuasion: Common Pool Resource Management with Price and Non-price Measures

We use lab experiments to study policies that address common pool resource overuse. We look at a price mechanism, specifically a Pigouvian subsidy, and four non-price interventions. The non-price policies are information alone, information with a normative message, communication alone, and normative messages with communication allowed. In all experiment sessions, no intervention occurs in the first seven and last seven rounds, allowing us to examine the effects of introducing and taking away a policy. The subsidy leads to near-efficient extraction, but surprisingly leads groups that were not over-extracting to also reduce extraction. This over-compliance decreases efficiency, although on net the subsidy is the most efficiency-enhancing intervention. Information provision, communication, normative appeals, and normative appeals combined with communication all reduce over-extraction (though by less than the subsidy) without exacerbating over-compliance; however, the effects of information alone and communication alone are small and not robust. The non-price policies cause a decline in over-extraction of from 0.549 (information) to 11.441 % (normative appeals with communication). These effects are of the same order of magnitude as the effects seen in major field studies of conservation messaging. The subsidy has the worst persistence properties (after the intervention ceases), while normative messages with communication have the best.     

The effects of role strain on the consumer decision process for groceries in single-parent households

Single-parent families are becoming a larger part of American society. But what is known about their decision-making processes? Role strain is of particular interest when studying single parents because of their need to serve multiple family roles otherwise carried out by dual-parent families. In this study, the consumer decision process for single parents is empirically examined in the context of grocery shopping. Role strain was found to have a significant effect on problem recognition style and reactive shopping behaviors. Advertising positively influenced proactive shopping behaviors and had a negative relationship with reactive shopping behaviors. Implications for food retailers are provided.     

Introducing a Learning Portfolio in an Undergraduate Financial Accounting Course

This paper evaluates changes made to the internal assessment component of a third year financial accounting course at a university in New Zealand. A learning portfolio was designed to supplement existing coursework. The aim was to engender in students a deep rather than a surface approach to learning. As a record of the students' learning, the learning portfolio was an attempt to produce an innovative development in the assessment of what was a traditionally taught financial accounting course. Within their learning portfolios, students were required to complete a number of tasks, each aimed at improving critical thinking skills and creativity. Students were also required to maintain a personal or reflective section aimed at personalising and deepening the quality of their learning.     

Auditor conservatism and voluntary disclosure: Evidence from the Year 2000 systems issue

This study further examines the phenomenon of conservative auditor behaviour by considering the level of voluntary disclosure of Year 2000 remediation information in company annual reports. Previous studies have provided evidence of conservative auditor behaviour by examining the link between Big 6 auditor choice and accruals (Francis and Krishnan 1999; Becker et al ., 1998; Defond and Subramanyam 1998). Protecting their reputation capital increases Big 6 auditor incentives to act conservatively to avoid litigation risk. We propose and find that Big 6 auditor clients disclose more Year 2000 remediation information than non–Big 6 auditor clients.     

Let the evidence speak again! Financial incentives are more effective than we thought

In this essay, the authors rejoin the debate about financial incentive effectiveness. They (a) briefly review the state of the literature in 1998, (b) highlight new meta‐analytic findings and update conclusions regarding the financial incentives–performance relationship, (c) address the myth that financial incentives erode intrinsic motivation, (d) provide explanations for the presumed failure of financial incentives and (e) offer some concluding thoughts and suggestions for future research.     

Empirical likelihood block bootstrapping

Monte Carlo evidence has made it clear that asymptotic tests based on generalized method of moments (GMM) estimation have disappointing size. The problem is exacerbated when the moment conditions are serially correlated. Several block bootstrap techniques have been proposed to correct the problem, including Hall and Horowitz (1996) and Inoue and Shintani (2006). We propose an empirical likelihood block bootstrap procedure to improve inference where models are characterized by nonlinear moment conditions that are serially correlated of possibly infinite order. Combining the ideas of Kitamura (1997) and Brown and Newey (2002), the parameters of a model are initially estimated by GMM which are then used to compute the empirical likelihood probability weights of the blocks of moment conditions. The probability weights serve as the multinomial distribution used in resampling. The first-order asymptotic validity of the proposed procedure is proven, and a series of Monte Carlo experiments show it may improve test sizes over conventional block bootstrapping.