obtaining welfare bounds in discrete response valuation studies comment in a recent article published in land economics boman bostedt and kristrim 1999 hereafter bbk show how nonparametric lower bound intermediate and upper bound measures of average welfare change can be extracted from discrete response contingent valuation survey data building on the work of kristrim 1990 and haab and mcconnell 1997 the article appears to offer a promising route to getting estimates of mean willingness to pay wtp along with their respective variances without having to estimate parametric choice models thereby providing a computationally simple way to capture both the methodological uncertainty about the choice of a central tendency measure and the statistical uncertainty associated with any particular measure having an accurate estimate of the variance of mean wtp allows one to make confidence interval statements about mean wtp when measures of mean wtp and its variance are extracted

testing for non response and sample selection bias in contingent valuation analysis of a combination phone mail survey we use a combination phone mail survey to test for possible sample biases in contingent valuation we find no sample selection bias but do find non response bias we show how failure to correct for non response bias distorts aggregate benefit estimates

market trading structures and asset pricing evidence from the treasury bill markets earlier studies report signfficant price disparities betweenfutures andforward or spot markets examining the treasury bill markets this article demonstrates that differences in market trading structures explain these disparities treasury billfutures rates contain significantly lower liquidity and default premia than do syntheticforward rates this reflects the functioning of a futures clearing association and differences between an open outcry auction futures market and an over the counter dealer spot market the same factors that make futures contracts nonredundant securities also explain the existence in equilibrium of price disparities

electricity outages in ghana are contingent valuation estimates valid african countries experience persistent and serious energy outages but while multiple valuation studies provide estimates of the costs of electricity outages in high income countries evidence is scarce for lower and middle income countries the few studies that assess the value of reliable energy supply rely on the contingent valuation method that is under wide scrutiny this paper aims to provide new estimates of households willingness to pay to reduce electricity outages for ghana and contributes to the debate on the validity of contingent valuation results for energy reliability our results suggest that households are willing to pay ghs 67 17 per month for reliable electricity supply equivalent to 7 of respondents income the results of tests for hypothetical bias wtp wta disparity and income effects suggest that the contingent valuation estimates from this study are robust and can support decision makers in prioritizing energy policies and investments

measuring the demand for improved urban sanitation services results of a contingent valuation study in ouagadougou burkina faso in developing countries there are few institutional mechanisms for the incorporation of demand information in the planning of public services as a result misjudgements about consumer preferences have often led to poor project design and performance the contingent valuation method which relies on direct elicitation of consumer preferences and willingness to pay has emerged as one approach to address this shortcoming the paper describes an application of the method to facilitate demand driven planning for provision of improved sanitation in ouagadougou burkina faso the results suggest that demand information about unfamiliar technologies can be successfully obtained and can serve as a useful input in the design of public services

management ownership and market valuation an empirical analysis we investigate the relationship between management ownership and market valuation of the firm as measured by tobin s q in a 1980 cross section of 371 fortune 500 firms we find evidence of a significant nonmonotonic relationship tobin s q first increases then declines and finally rises slightly as ownership by the board of directors rises for older firms there is evidence that q is lower when the firm is run by a member of the founding family than when it is run by an officer unrelated to the founder

agency relationships in family firms theory and evidence does owner management necessarily eliminate the agency costs of ownership drawing on agency literature and on the economic theory of the household we argue that private ownership and owner management expose privately held owner managed firms to agency threats ignored by jensen s and meckling s 1976 agency model private ownership and owner management not only reduce the effectiveness of external control mechanisms they also expose firms to a self control problem created by incentives that cause owners to take actions which harm themselves as well as those around them jensen 1994 p 43 thus shareholders have incentive to invest resources in curbing both managerialand owner opportunism we extend this thesis to the domain of the family firm after developing hypotheses which describe how family dynamics and specifically altruism exacerbate agency problems experienced by these privately held owner managed firms we use data obtained from a large scale survey of family businesses to field test our hypotheses and find evidence which suggests support for our proposed theory finally we discuss the implications of our theory for research on family and other types of privately held owner managed firms

why there are organized futures markets i shall present an explanation of the existence of organized futures markets with more predictive power than the two prevailing rival views my explanation briefly is this an organized futures market facilitates trade among strangers one of the rival prevailing views is a defense of futures trading it asserts that an organized futures market furnishes legitimate businessmen with a means of hedging so that they can obtain insurance against price risk the other prevailing view is an attack on organized futures markets it asserts that such markets enable speculators to manipulate prices to the detriment of outsiders who are less well informed and to the detriment of legitimate businessmen such as farmers the attack on organized futures markets likens them to gambling casinos the defense sees them as a form of insurance neither the attack nor the defense is valid the correct explanation is closely related to why we conduct trade using money instead of by barter

optimal electricity supply reliability using customer shortage costs abstract this paper describes an economic cost benefit method for determining the optimal power system capacity and reliability of electricity supply using customer shortage costs the approach is based upon identifying a system plan that simultaneously considers cost of service as well as value of service and maximizes the net economic benefits taking into account the interdependence between electricity reliability price and demand in contrast to the existing literature on this subject which considers only customer outage costs this paper argues that it is the related but considerably broader notion of customer shortage cost that is more relevant in the context of optimizing the reliability of electricity supply the paper develops a method for estimating shortage costs and sketches an integrated framework for optimizing reliability using such costs

speculation in international crises report from the gulf recent years have seen recurring international financial crises as well as a tremendous rise in trading and speculation how are the two related are speculators and trading responsible for market volatility this paper presents a study of the gulf crisis of 1990 1991 examining the behavior of the international oil market during a period of unprecedented volatility the analysis suggests that a combination of political events and market fundamentals rather than trading was behind this volatility

management control systems in family firms a review of the literature and directions for the future family firms play a significant role in the global economy although family firm literature has devoted much time and effort to investigating topics concerning corporate governance leadership ownership and succession accounting issues have received relatively scant attention in this paper we assemble and critically review extant literature on the choice of management controls this is an essential topic for firms as management control systems mcs are used to make sure subordinates behave in function of the goals of the firm family firms however have distinct features such as differences in governance structures and goals which can have a significant impact on whether and how mcs are used we conclude this review paper by providing avenues for future research that can advance our understanding of both the determinants and the outcomes of the choice of mcs

a comparison of futures and forward prices abstract this paper uses the pricing models of cox ingersoll and ross 1981 richard and sundaresan 1981 and french 1982 to examine the relation between futures and forward prices for copper and silver there are significant differences between these prices the average differences are generally consistent with the predictions of the futures and forward price models however these models are not helpful in describing intra sample variations in the futures forward price differences this failure is apparently caused by measurement errors in both the price differences and in the explanatory variables

a canadian customer survey to assess power system reliability worth a common approach used in quantifying the worth or benefit of electric service reliability is to estimate the customer costs monetary losses associated with power interruptions customer surveys are often used to determine interruption costs the ieee power systems research group has conducted surveys of canadian electric utility customers in the residential commercial and industrial sectors these surveys were sponsored by the natural sciences and engineering research council and seven participating utilities this paper presents the overall results of these surveys with emphasis on the cost results

are we willing to pay enough to back the bid valuing the intangible impacts of london s bid to host the 2012 summer olympic games using a contingent valuation survey this paper provides the first empirical test of the proposition that intangible impacts might justify hosting major sporting events on cost benefit grounds respondents drawn from london manchester and glasgow were asked for their willingness to pay wtp to host the 2012 olympic games in london on the basis of the intangible impacts that this event might provide annual mean wtp is 22 12 and 11 per year for 10 years in these 3 uk cities respectively an illustrative total uk wtp for intangible impacts is in the region of 2 billion statistical analysis of wtp determinants reveals a range of plausible explanatory factors such as respondents degree of support for the bid

economic costs of electricity supply interruptions us and foreign experience abstract this paper investigates the costs of interruptions in electricity service to customers this information is a key input in planning power system reliability using an economic cost benefit approach the paper reviews the literature from the perspective of identifying alternate methodological approaches used their strengths and weaknesses and potential for bias it presents and compares outage cost estimates found in the literature on a common denominator basis it attempts to explain the sources of the wide range of variation observed in different study estimates and it identifies the need for further work on this important topic

commodity agreements and commodity markets lessons from tin in what follows we study the history of the tin market over the period i982 5 important questions this exercise will help to answer are was the collapse of the tin market a failure of the buffer stock operation and was it inevitable was the activity of the buffer stock a commodity market manipulation was there a deficiency in the drafting of the tin agreement was there a failure of commodity market regulation more generally while it has long been recognised that stabilisation schemes are vulnerable to speculative attacks the interconection between buffer stock managements and futures markets has not been explored in this sense our historical analysis will

intra day tests of the efficiency of the treasury bill futures market in this paper we use intra day prices to examine the efficiency of the treasury bill futures market the use of intra day data allows us to carefully match in time trades in the futures and cash markets by matching trades and allowing delays between observing apparent inefficiencies and the trade we are examining realistic trading strategies we find profitable arbitrage swaps and a preferred strategy for initial purchase these profits do not depend on an assumption of an equilibrium model hence these tests are direct tests of efficiency rather than a joint test of efficiency and equilibrium t his paper examines the efficiency of the treasury bill futures market this subject has been examined before by capozza and cornell 1979 cornell 1981 lang and rasche 1978 rendleman and carabini 1979 vignola and dale 1979 poole 1978 and puglisi 1978 there are a number of reasons why this paper makes an important contribution to the literature the first reason is that by using trade by trade futures prices we can make more realistic assumptions about the pnces at which trades could have taken place this paper uses intra day prices to examine efficiency prior studies at best used closing prices to examine apparent inefficiencies and assumed that transactions took place at these closing prices there are two problems with this procedure first simultaneous transactions cannot actually occur at closing prices there is almost an hour difference between the closing of the chicago futures and new york spot markets thus when the closing spot market price is observed the futures market has been closed for about an hour closing prices could be used to judge apparent discrepancies however it would be necessary to execute trades at the open making decisions based on closing prices and then assuming trades can take place at these prices is an approximation which could significantly affect results in addition using only closing prices ignores any intra day trades which could lead to profits in this study we match in time intra day prices in the spot and futures market these matched prices are used to identify apparently profitable trading rules we then assume trades take place at prices which are observed later in the day this is a test of a trading rule which an investor could actually follow as we discuss later in the paper our results differ from prior studies these differences are primarily due to using intra day prices and carefully matching times so that information used to initiate trades would actually be available to the investor at the time of the trade the second reason is that we examine more complex trading strategies than those which have been employed in other studies the random walk literature provides a useful analogy the original random walk studies simply correlated past and future prices or returns later studies examined filter rules and other more complicated trading rules in this study we employ alternative trading rules of increased complexity to test for the existence of trading profits finally we explicitly examine the consequence of t bills futures contracts being futures rather than forward contracts futures contracts unlike forward contracts involve flows every settlement day the intermediate cash flows on futures contracts can affect the profitability of any strategy the only prior study that even considered this effect is the one by rendleman and carabini 1979 they used the theoretical model of cox ingersoll and ross 1981 to try to estimate whether the difference between forward and futures prices was likely to be large enough to affect the payoff from alternative trading strategies this is a useful first attempt however ultimately the effect of daily settlement or marking to the market has to be examined directly as part of trading strategies to see if it affects the outcome of these strategies there are other problems with prior studies these involve gross estimates of prices and averaging data in a way that can mask inefficiencies since these problems are discussed in some detail in rendleman and carabini there is no reason to review them further here probably no area in finance has received more attention than the efficiency literature the reader may well wonder why even given the approximareceived for publication august 23 1982 revision accepted for publication may 20 1983 new york university new york university and baruch college respectively the authors would like to thank the center for the study of futures markets at columbia business school for financial support

does it matter when a power outage occurs a choice experiment study on the willingness to pay to avoid power outages using a choice experiment survey the marginal willingness to pay wtp among swedish households for reductions in power outages is estimated the results from the random parameter logit estimation indicate that the marginal wtp increases with the duration of the outages and is higher if the outages occur during weekends and during winter months moreover the random parameter logit model allows us to estimate a sample distribution of wtp and we find a significant unobserved heterogeneity in some of the outage attributes given that households have negative welfare effects from outages it is important that policy makers consider these negative impacts on household utility when regulating the swedish electricity market

the willingness to pay by households for improved reliability of electricity service in north cyprus abstract this research examines households willingness to pay wtp for an improved electricity service households wtp is estimated using the payment ladder contingent valuation cv data from 350 in person interviews in north cyprus in order to avoid the cost of outages households are willing to incur a 13 8 increase in their monthly electricity bill a cost benefit analysis cba indicates that the annualized economic benefits of improved reliability of the electricity service would be approximately usd 35 6 million for the residential sector this figure is more than enough to finance the investments needed to completely eradicate any electricity outages in addition the fuel savings from substituting the generation of the new plants for the old plants would yield about usd 32 9 million per year in fuel savings hence a change from the current low reliability policy to one of providing a high quality service would yield an economic net present value to the residents of north cyprus of twice the investment costs or usd 173 3 million within five years

welfare evaluations in contingent valuation experiments with discrete response data comment in the case of private goods individuals reveal their preferences in the market place no similar market mechanism exists in the case of public goods however one obvious possibility is to ask people about their maximal willingness to pay for public goods or government expenditure johansson 1987 1990 miller in some recent contingent market valuation studies people instead have been asked to accept or reject a specified amount of money for a change in the provision of a public good different subsamples are confronted with different bids the resulting yes and no responses usually are analyzed by logit or probit techniques e g johansson and kristrom this raises the question of how to compute the average willingness to pay when only yes and no responses are available this point was advanced by hanemann in his seminal 1984 paper on welfare evaluations with discrete responses see also hanemann 1987 however we believe a minor imperfection in hanemann s presentation may confuse and mislead practitioners hanemann s approach assumes that negative bids cannot occur but at the same time gives the impression that it also applies to models that allow for negative bids we also extend hanemann s discussion of the choice of money measure in cost benefit analysis

toward a theory of agency and altruism in family firms surprisingly the majority of u s family firms offer employed family members short and long term performance based incentive pay we draw on the household economics and altruism literatures to explain why family firms might feel compelled to do so and develop theory that predicts when this practice will be beneficial results based on data obtained from 883 family firms show that altruism as reflected by the parents estate and share transfer intentions moderates the effect of these pay incentives as our theory predicts as such this article helps explain both how altruism influences agency relationships in family firms and why business practice in family firms differs from those found in other types of firms

default market microstructure and changing trade patterns in forward markets a case study of north sea oil abstract default or credit risk is a central difference between forward and futures markets empirical tests have found little difference between forwards and futures prices but these tests have been conducted on markets where such risk is minimal e g foreign exchange so that even if default risk is in general an important difference between forward and futures trading they would have been unable to detect its effects in contrast this paper presents a case study of a market for forward delivery of a type of crude oil from the north sea that experienced widespread and well documented defaults when the spot price of the underlying commodity plunged from roughly 30 to roughly 10 per barrel in a short period of time in early 1986 the defaults were by relatively small lightly capitalized trading companies firms that neither produce nor consume the physical commodity because information on defaults in financial markets is scarce the paper describes the circumstances surrounding the default episode in some detail the market survived the default episode with market microstructure unaltered and still flourishes despite the successful introduction of a futures market in the same commodity by the london international petroleum exchange patterns of trade changed however the paper examines the hypothesis that investment banks which entered the market following the default period provided intermediation services to market participants thereby substituting to an extent for a clearinghouse taking advantage of the information on the buyer and seller in each transaction the paper presents nonparametric tests for changing patterns of forward trade

forward and futures prices evidence from the foreign exchange markets cornell and reinganum 1981 hereafter cr report that price differentials for future contracts and forward contracts are statistically insignificant in foreign exchange markets based on this finding cr conclude that marking to market is insignificant in the formulation of currency futures prices this note identifies two potential concerns with the cr tests one problem relates to the timing of delivery dates for matched contracts a second problem relates to the time period for the cr study we show that correcting for these problems does not affect the overall conclusions of the cr study marking to market does not appear to have a significant effect on currency futures prices

assessing empirical research in managerial accounting a value based management perspective this paper applies a value based management framework to critically review empirical research in managerial accounting this framework enables us to place the exceptionally diverse set of managerial accounting studies from the past several decades into an integrated structure our synthesis highlights the many consistent results in prior research identifies remaining gaps and inconsistencies discusses common methodological and econometric problems and suggests fruitful avenues for future managerial accounting research

the entrepreneurial orientation performance relationship in private family firms the moderating role of socioemotional wealth drawing on socioemotional wealth sew literature this paper revisits the established entrepreneurial orientation eo performance relationship in a family business context the main idea in entrepreneurship literature is that eo leads to increased firm performance we question this logic in a family business context because family related non financial goals like sew may prevent the firm to reap the fruits of their entrepreneurial efforts specifically we argue that sew engenders inefficiencies that place constraints on the realization of the benefits of entrepreneurship therefore we propose that a high level of sew preservation hinders the transmission of the family firm s eo into positive performance effects to test this hypothesis an empirical study was developed using a sample of 232 belgian private family firms robust linear regression analysis reveals that the positive effect of eo on financial performance decreases as the level of sew preservation increases

electricity tariffs in india an assessment of consumers ability and willingness to pay in gujarat abstract a sample of electricity consumers covering agricultural residential and industrial consumers in the indian state of gujarat was surveyed in 1997 to investigate the consumers ability and willingness to pay for electricity supplied from the grid the ability to pay was estimated using the weight of the cost of electricity to meet at least the basic household needs in relation to the overall income or expenditure the willingness to pay was estimated using the costs of meeting the needs by alternative sources of energy namely diesel in the case of farmers to pump water for irrigation and captive power generation using diesel generators in the case of industrial users survey results reveal the proportion of consumers in different categories which do not have the ability to pay more or are even not willing to pay more for electricity the survey findings have been used as a guideline in the proposed adjustment of tariffs charged by the gujarat electricity board

estimating the willingness to pay for water services in developing countries a case study of the use of contingent valuation surveys in southern haiti progress in improving the quality and quantity of water used by people in rural areas of the developing world has been unsatisfactory in two respects 1 supplies that have been built are frequently neither used correctly nor properly maintained and 2 extension of improved service to unserved populations has been slow though this poor record is not the result of a single factor a major impediment to improved performance is inadequate information on the response of consumers to new service options the behavioral assumptions that typically underlie most rural water supply planning efforts are simple it is commonly assumed that so long as financial requirements do not exceed 5 of income rural consumers will choose to abandon their existing water supply in favor of the improved system several reviews by the world bank bilateral donors and water supply agencies in developing countries have shown however that this simple model of behavioral response to improved water supplies has usually proved incorrect 1 in rural areas many of those served by new systems have chosen to continue with their traditional water use practices

protest responses in contingent valuation a significant number of respondents to contingent valuation surveys tend to either state a zero bid or refuse to state a bid at all for reasons associated with the process of valuation these protest responses are routinely removed from contingent valuation samples because it is assumed that they are not indicative of respondents true values the censoring of protest responses has led to the emergence of a definitional controversy one view is that the definition of protest responses and the rules for censoring them are dependent on whether the practitioner conceives of the contingent valuation survey as a market or as a referendum however what is not acknowledged is the possibility that protest responses and their meaning may vary according to the type of good being valued the elicitation format and the interaction between these elements and external factors this potential renders the development of unambiguous rules for censoring protest responses difficult moreover when willingness to pay is viewed as a behavioural intention it becomes important to determine what the responses actually mean this approach does not assume an interpretative position a priori against which the responses should be judged but seeks to inform an existing understanding which is inadequate

the relation between forward prices and futures prices abstract this paper consolidates the results of some recent work on the relation between forward prices and futures prices it develops a number of propositions characterizing the two prices these propositions contain several testable implications about the difference between forward and futures prices many of the propositions show that equilibrium forward and futures prices are equal to the values of particular assets even though they are not in themselves asset prices the paper then illustrates these results in the context of two valuation models and discusses the effects of taxes and other institutional factors

information and normal backwardation as determinants of trading performance evidence from the north sea oil forward market this paper utilizes transaction specific data on forward trading in the international petroleum market to test directly predictions from the theory of normal backwardation against information based predictions of trader performance with the ability to identify buyers and sellers the authors find that no traders make significant profits on interday measures within the day however traders likely to have superior information make significant profits the results are not supportive of normal backwardation but are consistent with the time pattern of information dissemination in this market deals made during the day are widely reported only at day s end copyright 1994 by royal economic society

reliability worth assessment in a developing country residential survey results this paper presents the results of a residential customer survey conducted in service areas of the nepal integrated electric power system nps the objective was to determine the power interruption costs incurred by the residential customers of a developing country and extend the customer survey approach to reliability worth evaluation in a developing environment interruption cost estimates were obtained using in person interviews with 944 sample customers the results indicate the implications of service reliability to residential customers of nepal and show that reliability worth evaluation in a developing country is both possible and practical

forward and futures prices evidence from the foreign exchange markets empirical studies of the treasury bill markets have revealed substantial differences between the futures price and the implied forward price these differences have been attributed to taxes transaction costs and the settling up procedure employed in the futures market this paper examines the forward and futures prices in foreign exchange in an attempt to distinguish between the competing explanations empirical studies of the treasury bill market have revealed differences between the futures price or rate and the implicit forward price derived from the term structure of interest rates 1 these differences have generally been attributed to market imperfections such as taxes and transaction costs see for example arak 1 capozza and cornell 2 and rendelman and carabini 6 recently however cox ingersoll and ross 3 henceforth cir derived a model in which forward and futures prices need not be equal even in perfect markets without taxes as long as interest rates are stochastic the significance of the cir effect may be hard to investigate using only data from the bill market because of the potentially complicating effects of taxes and transaction costs unique to this market by using data from the foreign exchange market we are able to eliminate the tax effect and reduce the impact of transaction costs the question we address is whether the discrepancies observed in the treasury bill market are also observed in the foreign exchange market if they are then we have evidence that the differences are due to a combination of the cir effect and the transaction costs common to both markets if they are not then either the magnitude of the cir effect is much less in the foreign exchange market or the treasury bill results are due to the unique tax treatment and transaction costs of that market this paper is organized as follows in section i the trading mechanics of the forward and futures markets in foreign exchange are discussed section ii reviews the explanations for the discrepancies between the forward and futures prices for treasury bills the institutional differences between the foreign exchange and bill markets are also summarized to show which of these explanations cannot apply to the foreign exchange market in section iii the data are decribed and the empirical results are presented the conclusions are summarized in the final section

the value of online banking to small and medium sized enterprises evidence from firms operating in the uae free trade zones abstractthis study estimates the willingness to pay of small and medium sized enterprises smes for a business online banking services the estimation utilizes a contingent valuation method employing data from 400 smes in the united arab emirates free zones an interval regression model is used to identify company characteristics affecting wtp the results indicate an average wtp for online banking of 518 50 per month firms engaging in international trade value these services at least 10 more than those with only domestic operations other variables that significantly affect wtp include number of employees and the transportation cost of using traditional branch banking

choice experiment study on the willingness to pay to improve electricity services abstract modern forms of energy are an important vehicle towards poverty alleviation in rural areas of developing countries most developing countries households rely heavily on wood fuel which impacts on their health and socio economic status to ease such a dependency other modern forms of energy namely electricity need to be provided however the quality of the electricity service namely reliability is an important factor in reducing this dependency this paper discusses a choice experiment valuation study conducted among electrified rural households located in kisumu kenya in which the willingness to pay wtp to avoid power outages or blackouts was estimated a mixed logit estimation was applied to identify the various socio economic and demographic characteristics which determine preferences in reducing power outages among a household s users in conclusion several of the socio economic and demographic characteristics outlined in this paper were identified and can assist service differentiation to accommodate the diverse households preferences towards the improvement of the electricity service