A BUDGETHOLDING EXPERIMENT IN NEW ZEALAND

This paper provides a case study of a New Zealand health centre which embarked on a budgetholding (similar to UK fundholding) trial in 1992. The case study is grounded in the changes underway in the New Zealand public sector and in the management and organisation of health care. The case discusses the impact of the budgetholding trial on the practice and reflects on the future of budgetholding in New Zealand. Initial indications are that general practitioners are moving away from practice based budgetholding and are combining into Independent Practice Associations (IPAs) to facilitate contract negotiations and to provide additional leverage in dealing with secondary care providers.     

MARKET REACTION TO NATIONAL DISCRETION IN IMPLEMENTING THE BASLE ACCORD

We report the wealth effects among banks in the United States, Japan, Canada, and the United Kingdom in reaction to public announcements concerning their respective national implementation of the 1988 Basle Accord, an international risk-based capital regulatory agreement. Previous survey findings indicate bankers in different countries perceive that national discretion could threaten the competitive equity goals of the new risk-based capital rules. Based on a multivariate regression model using seemingly unrelated equations, we find significantly positive and negative market reactions by bank investors to individual announcements of different countries' post-Accord capital rules. However, no particular country's banks were systematically advantaged or disadvantaged with national discretion announcements viewed in aggregate. Although national discretion does affect bank wealth, the evidence does not suggest that national implementation compromises the competitive goals of the Accord.     

Tax Structure and Natural Vacancy Rates in the Commercial Real Estate Market

A number of studies have postulated that the Economic Recovery Tax Act of 1981 (ERTA 1981) was responsible for the dramatic overbuilding that occurred between 1981 and 1986, primarily because returns became less sensitive to "real" demand. While there has been much research on how equilibrium or "natural" vacancy rates in the real estate market are determined, beginning with Rosen and Smith's seminal paper in 1983, virtually none of this work has dealt with the impact of the tax environment. This study makes an initial attempt to answer this question with respect to equilibrium vacancies resulting from tenant (or owner) turnover. A formal model is developed that considers as an objective function the landlord's desire to maximize his/her after-tax equity returns in an environment of monopolistic competition in which individual projects face downward-sloping demand curves, owing to market conditions and a degree of heterogeneity among tenants in search costs or some other characteristic. The natural vacancy rate is shown not to depend directly upon the tax environment, but to depend indirectly upon it only to the extent that equilibrium market rents are lowered. The nature of the vacancy response depends critically upon the shape of the tenant demand response relationship upon its transition to a lower-rent region. This response is interactive with the degree of turnover and supply responsiveness within individual markets.     

Nuclear power: The question of public acceptance

Technologists have been surprised—in view of the persuasive technical arguments—at the strength of public opposition to nuclear power. But their assumption that information and argument can, by their rational force, change public opinion on sensitive issues, rests on oversimplified theories about attitude formation. When the grounds for opposition to or approval of a controversial programme are investigated—as the authors of this article have done, on the issue of nuclear power—it becomes apparent that attitude formation is not, in the technologists' sense, a “rational” process. Here the authors describe an attitude model, and present the results of its application to the question of public attitudes to nuclear power—including the discovery of the relatively minor role that technical and environmental questions play in determining those attitudes.     

Time Allocation Decisions Associated with Job Market Preparation: Undergraduate Perceptions versus Market Realities

A survey of agribusiness firms identifies characteristics associated with above average starting salary offers in the allied fields of agribusiness, agricultural economics, business, and economics. A complementary survey is made of students at Texas A&M University and University of Georgia. Results show that firms value work experience and leadership experience more than students do, whereas students value raising grade point average and interview preparation more than do firms. Students seeking a firm's maximum starting salary offer will need to enhance academic performance with substantial work experience and leadership experience.     

ESTIMATING THE GENERAL EQUILIBRIUM BENEFITS OF LARGE CHANGES IN SPATIALLY DELINEATED PUBLIC GOODS*

The purpose of this article is to report a new approach for measuring the general equilibrium willingness to pay for large changes in spatially delineated public goods such as air quality. We estimate the parameters of a locational equilibrium model and compute equilibria for alternative scenarios characterizing the availability of public goods within a system of communities. Welfare measures take into consideration the adjustments of households in equilibrium to nonmarginal changes in public goods. The framework is used to analyze willingness to pay for reductions in ozone concentrations in Southern California between 1990 and 1995.     

The Impact of Fantasy Football Participation on NFL Attendance

The fantasy sports industry, primarily led by fantasy football, has reportedly grown to 18 million unique players generating over $2 billion dollars annually according to the Fantasy Sports Trade Association. Anecdotal evidence suggests that this impressive growth is also generating increased interest for the sports on which the games are based. We use survey data from the ESPN Sports Poll to determine whether fantasy football participation increases NFL game attendance. The results suggest that fantasy football participants are not only more likely to attend at least one game per year, but also that they attend between 0.22 and 0.57 more games per season.     

Behavioral Economics and Benefit Cost Analysis

This paper provides a brief review of the theory of benefit cost analysis and then discusses proposals by economists calling for developing a new foundation for applied welfare economics. These proposals assume individual choices cannot be reconciled with coherent preferences. As a result, applied welfare economics must consider a different basis for defining the public tradeoffs to be used in project evaluation. This analysis concludes none of the available proposals meets the needs for policy evaluation with benefit cost analysis. The paper also offers a different explanation for the seemingly incoherent preferences implied by some choices. The last part of the paper reports the results of laboratory experiments intended to evaluate whether market outcomes would allow analysts to discriminate among alternative hypothesis for seemingly irrational choices.