THE STANDARD OF LIVING IN THE UNITED STATES

A common approach to the evaluation of the standard of living is based on a function of real income. In the United States this often takes the form of CPI-deflated mean household income. Material well-being is more appropriately evaluated using a consumption-based index. Using data from the Consumer Expenditure Surveys we find that real mean income provides an inaccurate representation of the level and trend of the standard of living relative to real per equivalent total expenditure in the postwar United States. The differences between real income and real total expenditure per household equivalent member are found at all levels of aggregation.     

Why managers divest—Evidence from New Zealand's largest companies

Chief Executives from New Zealand's largest companies were surveyed to distinguish divesting and nondivesting companies, and to identify the relative importance of the factors and motives which led to the divestment of 208 business units in the period 1985 through 1990. The divesting companies were considerably larger and faster growing than nondivestors. The typical divestment was motivated by the need to convert unattractive assets into liquid form which could then be held to strengthen the balance sheet, or reinvested in either the core business or new areas.     

Measurement error and panel data1

The underidentification of linear models with measurement error does not necessarily extend to panel data models, as has been shown by GAiliches and Hausman (1986). We discuss and extend some of their results for a simple case and address particular issues concerning identification and asymptotic variances.     

The right to the city

The right to the city is not merely a right of access to what already exists, but a right to change it. We need to be sure we can live with our own creations. But the right to remake ourselves by creating a qualitatively different kind of urban sociality is one of the most precious of all human rights. We have been made and re‐made without knowing exactly why, how, and to what end. How then, can we better exercise this right to the city? But whose rights and whose city? Could we not construct a socially just city? But what is social justice? Is justice simply whatever the ruling class wants it to be? We live in a society in which the inalienable rights to private property and the profit rate trump any other conception of inalienable rights. Our society is dominated by the accumulation of capital through market exchange. To live under capitalism is to accept or submit to that bundle of rights necessary for endless capital accumulation. Free markets are not necessarily fair. Worse still, markets require scarcity to function. The inalienable rights of private property and the profit rate lead to worlds of inequality, alienation and injustice. The endless accumulation of capital and the conception of rights embedded threin must be opposed and a different right to the city must be asserted politically. Derivative rights (like the right to be treated with dignity) should become fundamental and fundamental rights (of private property and the profit rate) should become derivative. But new rights can also be defined: like the right to the city which is not merely a right of access to what the property speculators and state planners define, but an active right to make the city different, to shape it more in accord with our heart's desire, and to re‐make ourselves thereby in a different image.     

Analysis of interbudgetary financial flows in the Republic of Buryatia in 2001–2005

Financial flows between center and region are analyzed on the example of the Republic of Buryatia. Significant changes are shown to have occurred in the interbudgetary relations between the federal center and the region, which are associated with a revised delineation of authorities between different levels of authority. It has been the key factor in changing the sources and volumes of financial flows. The analysis is largely focused on the relations between the region and its municipalities.     

Call Options and Liquidation in Commercial Mortgage Financing

This paper models a commercial real estate project where a wealth-constrained manager uses outside debt financing to purchase a project who's return depends on future economic conditions and the manager's investment in the project. It is shown that it is inefficient to finance the project with callable debt. This prediction is consistent with observed real estate financing practice. I also model the outcome of financial distress allowing for (1) debt forgiveness, (2) equity in exchange for debt forgiveness, and (3) foreclosure. The model motivates (1) why commercial real estate loans are often foreclosed, and (2) why lenders foreclose assets at fire-sale prices.     

AN EMPIRICAL EXAMINATION OF RELATIONSHIP MAGNITUDE

Based upon a review of the extant literature, it is proposed that the structure of an interorganizational relationship is composed of relationship type and the under‐researched construct of relationship magnitude. Specifically, it is hypothesized that relationship magnitude, a second order construct composed of trust, commitment, and dependence, affects relationship type, which affects the perception of value of the relationship. The results of a survey analyzed through structural equation modeling support these hypotheses.     

Decomposition of Fraud‐Risk Assessments and Auditors' Sensitivity to Fraud Cues*

Practitioners and regulators are concerned that when auditors perceive management's attitude or character as indicative of low fraud risk, they are not sufficiently sensitive to high levels of incentive or opportunity risks in their overall fraud‐risk assessments. In this study, we examine whether a fraud‐triangle decomposition of fraud‐risk assessments (that is, separately assessing attitude, opportunity, and incentive risks prior to assessing overall fraud risk) increases auditors' sensitivity to opportunity and incentive cues when perceptions of management's attitude suggest low fraud risk. In an experiment with 52 practicing audit managers, we find that auditors who decompose fraud‐risk assessments are more sensitive to opportunity and incentive cues when making their overall assessments than auditors who simply make an overall fraud‐risk assessment. However, this increased sensitivity to opportunity and incentive cues appears to happen only when those cues suggest low fraud risk. When opportunity and incentive cues suggest high fraud risk, auditors are equally sensitive to those cues whether they use a decomposition or a holistic approach. We discuss and examine potential explanations for this finding.