Book reviews

Books reviewed Jim Stewart and Graham Beaver. HRD in Small Organisations, Research and Practice.     

Factors affecting the acquisition and transfer of novel attribute relationships to new product categories

This article investigates two factors posited to affect consumers' ability to learn a novel attribute relationship (e.g., “no pesticides → USDA organic symbol”) and apply this recently acquired knowledge when making judgments in a new product category. The first factor concerns the nature of the attribute encoding process and, in particular, whether it allows for comparison of examples. The second factor focuses on the relationship between the learning and transfer domains, and examines the influence of perceptual similarity (manipulated two ways: similarity in the elements comprising the attribute relationships, and similarity between the base and target domains) on the transfer process. Study 1 revealed a significant improvement in inter‐domain transfer when a relationship was learned in a multiple‐domain/multiple‐attribute learning environment over a single‐domain/single‐attribute environment. When attribute and domain diversity were examined separately (Study 2), it was found that attribute, but not domain, diversity produced the greatest improvements in transfer. Study 3 showed that the benefits of adding a perceptual similarity cue were most apparent when the transfer conditions were neither too easy (within domain and within attribute) nor too difficult (inter‐domain and inter‐attribute). © 2009 Wiley Periodicals, Inc.     

Gross national accumulation

Low birth rates, longevity, family disintegration, and other factors have reduced the size of the average household. At the same time household size is shrinking, new housing offers twice the floor space per occupant of old housing. Small households are inefficient users of space, utilities, furniture, and equipment. As these factors converge, the result is over consumption of durables and vast stockpiles of possessions just awaiting disposal when the baby boom generation passes on. The rightful heirs to these possessions are themselves accumulators, and will most likely have little use for what is left to them. What does the future hold for consumption, savings, and demand for housing? Booming flea markets, bigger homes as warehouses, a decline in consumption, or an epidemic of display and collection? Public policies have limited leverage on private behavior.     

An almost ideal demand system for alcoholic beverages in British Columbia

An almost ideal demand system for alcoholic beverages in British Columbia is estimated based on five beverage categories. Estimates of the model unrestricted and restricted to satisfy homogeneity and symmetry are presented. The restrictions are tested: as is common in applied demand analysis a number of rejections are encountered, although within-equation tests tend to support homogeneity. The rejections which are encountered are not mitigated by the inclusion of dynamic elements. The Slutsky matrix is used to examine the concavity of the expenditure function, which is found to be mildly violated. Marshallian and Hicksian own-, cross-price, and income elasticities are calculated and are found to be largely consistent with previous findings, although some noteworthy results are obtained.     

A MODIFIED VERSION OF THE KELLER PLAN IN AN ADVANCED FINANCIAL ACCOUNTING COURSE

This note provides an account of the introduction of a modified version of the Keller Plan in an advanced financial accounting course. The experiment involved (1) issuing detailed study guides which included a specification of behavioural outcomes; (2) abandoning large group lectures in favour of small group discussions and (3) measuring achievement by multiple choice testing. Although the degree of individualised learning was limited, most students felt that the changes made - especially the introduction of discussion groups - were of some improvement in their learning and development.     

Pension roulette: have you bet too much on equities?

In the 1990s, funding pension obligations by investing in stocks looked smart. By 1999, the bull market had poured a collective $260 billion surplus into the pension coffers of the S&P 500, permitting the companies to record the year-to-year increases as additional income. But just two years later, the bear market had obliterated those gains, replacing them with a cavernous $240 billion deficit--which had to be offset by the unlucky firms' ongoing cash flows, wreaking havoc on their earnings, debt levels, and stock prices. Corporate executives may be blamed for this debacle. But they were only following the rules. Current accounting guidelines keep companies from recording pension liabilities and assets on their balance sheets, instead relegating them to the footnotes. That makes it hard to see the risk that market drops expose companies to. Board members and top executives need to look beyond distorted accounting numbers to the economic realities of pension plans. Once they do, they may be surprised to find that they would gain far greater value and flexibility by passively investing their pension funds entirely in bonds. A bond portfolio can be designed to meet precisely, and with virtual certainty, a company's pension obligation, thus eliminating the chance of a funding gap. The predictability of bond investments also stabilizes earnings and cash flow. The expanded corporate debt capacity that results can then be used to fuel growth or reduce the firm's overall cost of capital. Even without an overhaul of today's misguided accounting rules, there's little reason for companies' pension funds to hold anything other than bonds.     

Using proxies for the short rate: when are three months like an instant?

The dynamics of the unobservable short rate are frequently estimateddirectly using a proxy. We examine the biases resulting fromthis practice (the 'proxy problem'). Analytic results show thatthe proxy problem is not economically significant for single-factoraffine models. In the two-factor affine model of Longstaff andSchwartz (1992), the proxy problem is only economically significantfor pricing discount bonds with maturities of more than fiveyears. We also describe two different numerical procedures forassessing the magnitude of the proxy problem in a general interestrate model. When applied to a nonlinear single-factor model,they suggest that the proxy problem can be economically significant.     

From ‘embrace and change’ to ‘engage and change’: trade union renewal and new management strategies in the UK automotive industry?

This article focuses on the relationship between the introduction of new management techniques (NMTs), trade union responses and employee attitudes in the automotive industry in the UK. In contrast to a prevailing pessimistic prognosis for the survival of traditional industrial relations in the 'new management' environment, unions remain as an independent and dissenting force. Paradoxically, one of the significant features driving union recovery has been the opportunities presented by the very nature of NMTs themselves which, among other things, have opened the possibility for increased local autonomy.