Tests of Income Pooling on Household Budget Data: The Australian Evidence

The unitary household model implies pooling of all individual incomes. This study distinguishes between various types of income pooling and tests them on Australian household income/expenditure data. The tests recognise the endogeneity of both earned and unearned income and are performed using a 3 SLS estimation procedure that allows feedback between the various equations. The results support income pooling for some items, though not for others. Moreover, income pooling across gender seems much less likely for old people than for the younger individuals. The study, also, provides evidence on the interaction between the various types of income.     

Prediction from binary choice models: A note

The results of Westin (1974) can be obtained, to a satisfactory approximation, without recourse to numerical integration. We also show how to attach a standard error to his point estimates.     

Residual analysis for censored duration data

In this note we show how residuals defined for right censored duration data, such as arise in, for example, labour market studies, feature in diagnostic statistics to detect omitted covariates and neglected heterogeneity.     

Incentive Travel: A View from the Top

Meetings, incentives, conventions, and exhibitions are an important segment of the hospitality and tourism industry. The extant study focuses on the incentives or incentive travel. While incentive travel has existed for decades it is a relatively under-researched sub-field of hospitality. The goal of this article is to examine the current state of incentive travel, how it has changed over the past few years, and how it is likely to change in the future. Rather than examine every aspect of incentive travel, this research only looks at “buyers” of incentive travel rather than users or recipients and obtains data only from top-level corporate executives. Thus, the results are of the highest level and highest caliber. It was found that companies have been using incentive travel for decades and find it to be an effective employee motivator and as an incentive to sell product. It also builds morale and relationships.     

A reply to the comment of Franke and Andrews on ‘The economics of tobacco advertising: spending,demand and the effects of bans’

In this paper, the authors respond to comments made by Franke and Andrews on their earlier paper, published in issue 22(1) of the International Journal of Advertising.     

THE MEASUREMENT OF CHANGES IN QUALITY

This paper is concerned with the theoretical problems of devising indexes of quality change and with some of the practical problems of constructing such indexes from market data, relating these to the various attempts to construct such indexes in the past. The general conclusion is that, while quality is inherently ordinal, there are three different indexes which might be taken as "measures" of quality change. If changes are sufficiently small, the values of all three indexes will coincide and then, only, can we consider any one of them to be an unambiguous measure of the change.     

Computation of search duration probabilities and the integral of the normal distribution function

The constraction of likelihood functions for data on individuals assumed to be sampling from a price distribution and operating a reservation price policy involves calculation of the probability that their duration of search exceeds, say, t periods, P( T > t). In this note we show how this calculation can be simply done by (a) working in continuous time, and (b) using a result on the integral of the Normal distribution function. We then use the result to study some properties of the model.     

Maintaining a Flexible Payout Policy in a Mature Industry: The Case of Crown Cork and Seal in the Connelly Era

This case study suggests that the payment of cash dividends may not be essential to the long-run success of even mature companies. A mature company in a mature industry, the Crown Cork and Seal Company did not pay any common dividends during John Connelly's 33-year tenure as chairman and CEO. During that period (from 1957 to 1990), the company used stock repurchases along with a compensation policy featuring low executive salaries and generous executive stock options to motivate and execute a focused business strategy. Under the leadership of Connelly, Crown was rescued from what appeared to be certain bankruptcy to become one of the most profitable firms in its industry. Debt was immediately paid down, preferred stock was retired, and the firm's operations were revamped and streamlined. Instead of following the diversification strategies of larger industry peers, Crown's strategy was focused and driven by profit margin and customer service. This strategy eventually led Crown to invest internationally and acquire one of its major rivals. In addition to significant equity ownership by Crown's management and board members, the company's board had a remarkable number of “outsiders” and representatives from international operations, creating a culture that was outward-looking as well as cohesive. And without paying a dollar of dividends—a practice that many finance scholars believe imposes a necessary discipline on mature companies—Crown both preserved its financing flexibility and produced a remarkable record of increases in both profits and market value.