bluuebunny/crossref_metadata_2025 huggingface dataset:
Optimal Control of Vector‐Virus‐Plant Interactions: The Case of Potato Leafroll Virus Net Necrosis
Authors: Marsh Thomas L. , Huffaker Ray G. , Long Garrell E.
Published: March 2003

This paper introduces a new specification to the economic pest management literature designed to optimally manage vector‐virus‐plant interactions for a single crop. The viral, insect‐vector, and plant‐host stocks are treated as renewable resources and conjunctively controlled in a discrete‐time control framework subject to crop quality standards established in marketing contracts. The result is a conceptual integrated pest management model providing optimal insecticide scheduling and dynamic decision‐making thresholds in a novel economic pest management context. Model results are compared qualitatively with those from previous specifications. The model is applied empirically to control potato leafroll virus net necrosis in commercial potato production.
How to Improve the Management of Renewable Resources: The Case of Canada's Northern Cod Fishery
Authors: Grafton R. Quentin , Sandal Leif K. , Steinshamn Stein Ivar
Published: March 2003

The paper examines howan easy‐to‐apply optimal feedback rule can be used to solve for optimal levels of exploitation of a renewable resource. Using data from Canada's northern cod fishery, the optimal feedback rule is used to derive optimal levels of exploitation for the years 1962–91 under different discount rates, alternative model specifications, and parameter assumptions. The optimal feedback rule indicates that over much of the period the fishery was economically overexploited and, given the stock development that actually took place, a harvesting moratorium should have been instituted three years earlier than when it was introduced. The results show how the use of a simple and flexible optimal rule by managers of renewable resources can generate substantial gains.
Sustainability as Intergenerational Fairness: Efficiency, Uncertainty, and Numerical Methods
Authors: Woodward Richard T.
Published: March 2003

This paper presents an economic model of sustainability defined as intergenerational fairness. Assuming that intergenerational fairness is an obligation of each generation, a recursive optimization problem is obtained. The problem has the advantage that uncertainty can readily be incorporated in the model and it can be solved numerically for a wide range of specifications. The possibility of trade‐offs between efficiency and sustainability are discussed. Under plausible conditions, it is shown that a sustainability obligation is met only if there is the expectation of economic growth.
The Optimal Timing of Evaluation of Genebank Accessions and the Effects of Biotechnology
Authors: Koo Bonwoo , Wright Brian D.
Published: March 2003

The lack of ex ante evaluation of germplasm in genebanks has been the single most prevalent and long‐standing complaint of plant breeders about the management of genebanks. Advances in biotechnology offer the possibility of faster, cheaper and more efficient evaluation methodologies. Will these new technologies favor ex post evaluation, as some expect, or will they lead to more ex ante evaluation? Will they also lead to earlier development of varieties with specific traits in anticipation of demand for them? Will the prospect of further advances in biotechnology favor delay of evaluation and development? This paper addresses these questions in the case of evaluation of germplasm for resistance to a disease.
Searching an Ex Situ Collection of Wheat Genetic Resources
Authors: Gollin Douglas , Smale Melinda , Skovmand Bent
Published: March 2003

A theoretical model is developed and applied to the search for disease and pest resistance in ex situ collections of wheat genetic resources, employing actual data on frequency distributions, disease losses, and search costs. Experiments developed from case studies clarify several misperceptions about the value of gene banks and their utilization by breeders. The observation that wheat breeders “use” gene banks rarely does not imply that marginal accessions have low value. High costs of transferring genes with conventional breeding techniques mean that it may be efficient to store certain categories of genetic resources (such as landraces) “unused” for many years.
Constrained Efficient Contracts for Area Yield Crop Insurance
Authors: Vercammen James A.
Published: March 2003

With area yield crop insurance, indemnification occurs when area yield falls below a yield trigger that is chosen by the producer. The maximum value for this yield trigger is generally restricted (e.g., 80% of the long term area average yield). The impact of this trigger constraint on the optimal design of an area yield insurance contract is examined. Within the constrained efficient contract, indemnities consist of both a lump sum payment and a payment that is proportional to the yield shortfall. Because lump sum payments may not be feasible to implement, efficiency‐enhancing modifications to standard contracts are also proposed.
The Role of Farmers' Behavioral Attitudes and Heterogeneity in Futures Contracts Usage
Authors: Pennings Joost M.E. , Leuthold Raymond M.
Published: March 2003

The relationship between farmers' behavioral attitudes and use of futures contracts is examined, taking into account non‐directly observable variables and the heterogeneity of farmers. The relationships are tested on a stratified data sample of 440 farmers. Cluster analysis and covariance structure equation models are used to validate the relationships. Farmers are found not to be homogenous regarding the factors influencing their use of futures. Heterogeneity at the segment level masked important effects at the aggregate level, notably risk attitude. Furthermore, several psychological constructs for farmers related to market orientation, risk exposure, market performance and entrepreneurial behavior play important roles in their use of futures contracts
Financial Structure of Farm Businesses under Imperfect Capital Markets
Authors: Barry Peter J. , Bierlen Ralph W. , Sotomayor Narda L.
Published: March 2003

Recent finance studies have considered whether gaps between a firm's costs of internal and external sources of investment funds, arising from capital market imperfections, influence its investment behavior and funding preferences. This study tests the applicability of the pecking order and partial adjustment theories of financial structure to farm businesses by fitting a set of simultaneous financial equations with farm panel data from Illinois. Model results indicate that Illinois farms adjust to long‐run financial targets for equity, debt, and leasing, but that additional financing needs follow a pecking order that is stronger for farms with greater asymmetric information problems
Preference Learning in Consecutive Experimental Auctions
Authors: Shogren Jason F. , List John A. , Hayes Dermot J.
Published: March 2003

This paper explores the origins of the strikingly high price premia paid for new food products in lab valuation exercises. Our experimental design distinguishes between two explanations of this phenomenon: novelty of the experimental experience versus the novelty of the good, i.e., preference learning—bids reflect a person's desire to learn how an unfamiliar good fits into their preference set. Subjects bid in four consecutive experimental auctions for three goods that vary in familiarity, candy bars, mangos, and irradiated meat. Our results suggest that preference learning is the main source of the high premia, and that novelty of the experimental experience does not in itself artificially inflate valuations.
Estimation of Censored Demand Equations from Large Cross‐Section Data
Authors: Perali Federico , Chavas Jean‐Paul
Published: March 2003

The article develops an alternative econometric methodology to estimate a system of censored demand equations using a large cross‐section data from Colombian urban households. The approach preserves the behavioralinformation expressed by zero expenditures and conforms with the requirements imposed by consumer theory in a way consistent with the random utility hypothesis. We motivate the choice of the Tobit modelas a statistical representation of consumer behavior and introduce the methodology by specifying the AIDS model modified according to both a translating and scaling demographic transformation. We propose to estimate each demand equation in unrestricted form using the jackknife technique. We then recover the demand parameters imposing the cross‐equations restrictions by using minimum distance estimation. The empirical results of the censored demand system for specific households of policy relevance are reported.
Estimation of Profit Functions When Profit Is Not Maximum
Authors: Kumbhakar Subal C.
Published: March 2003

This paper deals with derivation and implications of profit functions when profit is not maximum due to the presence of either technical inefficiency or allocative inefficiency, or both. We show that input demand and output supply, elasticities, and returns to scale are, in general, affected by these inefficiencies. We also show that the overall profit efficiency is not necessarily the product of technical and allocative efficiencies, meaning that technical and allocative inefficiencies are not necessarily independent. Estimation techniques are developed for both cross‐sectional and panel data models. Working of the model is illustrated using a panel of 60 salmon farms.
Sequential Adoption of Site‐Specific Technologies and its Implications for Nitrogen Productivity: A Double Selectivity Model
Authors: Khanna Madhu
Published: March 2003

This paper analyzes the sequential decision to adopt two site‐specific technologies, soil testing and variable rate technology, and the impact of adoption on nitrogen productivity. The results indicate that while farm location was a key variable influencing adoption of soil testing, farm size, human capital, and innovativeness of farmers had a significant impact on adoption of variable rate technology in four Midwestern states. A double selectivity model applied to correct for sample selection bias shows that adoption leads to significant gains in nitrogen productivity for farms with below average soil quality but statistically insignificant gains for farms with above average soil quality.
Are Farm Size Distributions Bimodal? Evidence from Kernel Density Estimates of Dairy Farm Size Distributions
Authors: Wolf Christopher A. , Sumner Daniel A.
Published: March 2003

One often hears and sees reference to bimodal distributions of farm size. This notion seems to have become one of the stylized facts about American agriculture. Dairy farm size distributions are prime candidates to exhibit a bimodal size distribution. Older dairy farms tend to be significantly smaller than new dairy farms and there are well known regional size differences. Nonetheless, our analysis of 1989 and 1993 U.S. dairy farm size distributions, using nonparametric density estimation techniques, reveals that U.S. dairy farm size distributions are not bimodal. This result holds across years for herd size, total farm sales, and acres operated.
On the Pitfalls of Multi‐Year Rollover Hedges: The Case of Hedge‐to‐Arrive Contracts
Authors: Lence Sergio H. , Hayenga Marvin L.
Published: March 2003

It is shown that it is theoretically infeasible for multi‐year rollover hedge‐to‐arrive contracts, and for rollover hedges in general, to succeed at locking in high current prices for crops to be harvested one or more years into the future. The study utilizes 107 years of data to present strong empirical evidence that the corn market behaves remarkably similarly to what price theory predicts. Results also confirm that short historical time series are unreliable for predicting rare events. Hence, empirical studies of risk‐management contracts capitalizing on unusual occurrences should use samples sufficiently large to contain a meaningful number of relevant observations.
Valuation of Environmental Goods: Correcting for Bias in Contingent Valuation Studies Based on Willingness‐to‐Accept
Authors: Goldar Bishwanath , Misra Smita
Published: March 2003

The willingness‐to‐accept (WTA) measure of value is often subject to a systematic, large bias, making it unsuitable for use in contingent valuation studies. However, for the valuation of environmental goods, in many cases WTA rather than the willingness‐to‐pay (WTP) is the relevant measure. The paper proposes that, by using a composite‐error model for the estimation of the valuation function, a correction can be made for the bias in reported WTA. To illustrate the proposed methodology, it is applied to the data of the Brookshire‐Coursey (1987) study of alternative tree density in Troutman Park, Fort Collins.
Welfare Losses Due to Market Power: Hicksian versus Marshallian Measurement
Authors: Lavergne Pascal , Réquillart Vincent , Simioni Michel
Published: March 2003

This paper warns against the use of Marshallian welfare loss in applied analysis of market power. We show how to compute the Hicksian deadweight loss from an ordinary demand. Then, from an experiment using real data on twenty‐one sectors of the French food industry, we find that the Marshallian deadweight loss poorly approximates the exact Hicksian measure. Hence, it is advisable to use the latter in applied welfare analysis.
Capturing Experts' Uncertainty in Welfare Analysis: An Application to Organophosphate use Regulation in U.S. Apple Production
Authors: Roosen Jutta , Hennessy David A.
Published: March 2003

The use of organophosphate insecticides in apple production has become of regulatory concern since the Food Quality Protection Act passed into law in 1996. Through an expert opinion survey, we assess the economic impact of possible regulatory scenarios on the apple industry. Because experts are unsure of the impacts, we ask them for distributions of impacts to explicitly capture the uncertainty they face. We apply Bayesian methods to aggregate these distributions. Welfare impact distributions for different policy scenarios are estimated and ordered using a nonparametric test for stochastic ordering of probability distributions to facilitate policy decision making.
Agriculture and Ecosystem Restoration in South Florida: Assessing Trade‐Offs from Water‐Retention Development in the Everglades Agricultural Area
Authors: Aillery Marcel , Shoemaker Robbin , Caswell Margriet
Published: March 2003

Agricultural production decisions can affect ecosystem function and environmental quality. Environmental restoration policies can, in turn, affect the profitability of the agricultural sector. A dynamic model of agricultural production, soil loss, and water retention in the Everglades Agricultural Area is developed to assess agricultural impacts under alternative water policy and land acquisition scenarios.
U.S. Trade Policy on Lamb Meat: Who Gets Fleeced?
Authors: Paarlberg Philip L. , Lee John G.
Published: March 2003

The U.S. lamb meat industry received protection from import competition in 1999 with a tariff‐rate quota. This paper analyzes proposed and adopted policies using a partial equilibrium model of lamb meat and lambs incorporating imperfect competition in the packing industry. Under a tariff policy packers can only exercise oligopsony power in the lamb market and both packers and lamb growers benefit from protection. If a quota or tariff‐rate quota policy is used, packers can assert oligopoly power. Packers benefit from protection, but lamb growers may not. Under the tariff‐rate quota adopted, lamb growers suffer a welfare loss.
Unconditional Elasticities in Two‐Stage Demand Systems: An Approximate Solution
Authors: Carpentier Alain , Guyomard Hervé
Published: March 2003

Two‐stage budgeting postulates that the consumer's utility maximization decision can be decomposed into two steps. In the first stage, total expenditure is allocated over broad groups of goods. In the second stage, group expenditures are allocated over elementary commodities. In this article, we assume that the current weighted true cost‐of‐living price indices defined for each broad group of elementary commodities vary only very slightly with sub‐utility levels. Hence, it is possible to approximate the first stage of a two‐stage budgeting structure by a maximization problem involving a single price index and a single quantity index for each of the broad groups. Relationships between conditional and unconditional expenditure and price elasticities are derived within this context.
Price Behavior in a Dynamic Oligopsony: Washington Processing Potatoes
Authors: Richards Timothy J. , Patterson Paul M. , Acharya Ram N.
Published: March 2003

Punishment strategies are necessary to sustain a collusive oligopsony in a repeated game context when demand is uncertain and only market variables are observable. This article proposes a test for tacit collusion among potato processors in Washington state using a dynamic regime‐switching model estimated with a finite mixture method. The results support the existence of punishment and collusive regimes and show the welfare losses due to anti‐competitive behavior on the part of processors to be significant. Processors' oligopsony power is enhanced by higher domestic production, imports, and existing stocks, but it is ameliorated by high capacity utilization rates and exports.
Dynamic Supply Response and Welfare Effects of Technological Change on Perennial Crops: The Case of Cocoa in Malaysia
Authors: Gotsch Nikolaus , Burger Kees
Published: March 2003

Modern biotechnology will generate crops with higher yields and enhanced resistance to pests and diseases. In the case of perennial crops, the age composition of the present stand, the farmers' willingness to invest, and the yield profiles of old and new trees determine the speed of adoption of the new technology and the timing of the effects on supply and demand conditions. We adapt conventional welfare measures to account for these factors in the assessment of research induced supply shifts. The application to cocoa in Malaysia shows that consumers and adopting producers gain and non‐adopters lose. Overall, 72% of the welfare gains go to the consumers.
Least Squares and Entropy: A Penalty Function Perspective
Authors: Preckel Paul V.
Published: March 2003

Mathematical measures of entropy as defined by Shannon and cross entropy as defined by Kullback and Leibler are currently in vogue in the field of econometrics, primarily due to the comprehensive work of Golan, Judge, and Miller. An alternative interpretation of the entropy measure as a penalty function over deviations is presented, and a number of parallels are drawn with least squares estimators. It is demonstrated that both approaches may be applied to the general linear model. The causes of differences in estimated parameter values are described, and some suggestions for the formulation of entropy‐based econometric problems are presented.
A Hotelling‐Faustmann Explanation of the Structure of Christmas Tree Prices
Authors: Vukina Tomislav , Hilmer Christiana E. , Lueck Dean
Published: March 2003

We examine the relationship between a tree price and a tree age (height) using a Hotelling‐Faustmann type model of optimal plantation management, which accounts for the possibility of replanting and biological growth. The model predictions are tested using the data on Christmas tree prices in North Carolina collected in December 1997. The estimates show that, in general, the rates of change in prices between adjacent age cohorts reflect a competitive equilibrium in the capital market thus supporting the Hotelling‐Faustmann paradigm.
In‐Store Valuation of Steak Tenderness
Authors: Lusk Jayson L. , Fox John A. , Schroeder Ted C. , Mintert James , Koohmaraie Mohammad
Published: March 2003

Experimental methods were used to examine consumer willingness‐to‐pay for steak tenderness in a grocery store setting. When relying on a taste test alone to determine product quality, the participants paid an average premium of $‐1.23/lb for a tender versus tough steak. Fifty‐one percent of the participants were willing to pay an average of $‐1.84/lb when they had completed a taste test and were also provided information about the steak's tenderness. Results indicate that most consumers prefer more tender steaks and that many are willing to pay a premium for tender steaks.
Assessing the Financial Performance of Forestry‐Related Investment Vehicles: Capital Asset Pricing Model vs. Arbitrage Pricing Theory
Authors: Sun Changyou , Zhang Daowei
Published: March 2003

Capital asset pricing model (CAPM) and arbitrage pricing theory (APT) are used to assess the financial performance of eight forestry‐related investment vehicles. Although results from APT support previous findings from CAPM about timberland investments, three bodies of evidence show that APT findings are more robust. The major conclusions are (a) institutional timberland investments and timberland limited partnerships have a low risk level and excess returns; (b) forestry industry companies have not earned risk‐adjusted returns, and the performance of medium forest industry firms is worse than that of large firms; (c) stumpage price does not resemble the return generation process of timberland investments; and (d) lumber futures have little excess return.
Economies of Scale and Inefficiency in County Extension Councils: A Case for Consolidation?
Authors: Garrett Thomas A.
Published: March 2003

Current funding, mission, and organizational difficulties question the long‐run survival of extension and the Land‐Grant system. Consolidation of county extension offices is seen as a possible remedy for extension's problems. This paper estimates scale economies and inefficiencies in county extension offices in Kansas using parametric and nonparametric techniques. Large economies of scale and inefficiencies are found. Based on the empirical results, several simulations are performed to measure the short‐run cost savings associated with consolidation. The results reveal that while all counties would experience significant savings from consolidating, rural and less populated counties would experience the greatest per unit savings.
The Food Stamp Program and Food Insufficiency
Authors: Gundersen Craig , Oliveira Victor
Published: March 2003

Food stamp participants have higher food insufficiency rates than eligible nonparticipants, even after controlling for other factors. Given the Food Stamp Program's prominent role in the alleviation of hunger, this is a counterintuitive result. We conjecture that these higher rates are due to adverse selection insofar as households more likely to be food insufficient are also more likely to receive food stamps. We establish a theoretical framework to address this adverse selection. Using a simultaneous equation model with two probits, we show that once one controls for this adverse selection, food stamp recipients have the same probability of food insufficiency as nonrecipients.
Optimal Production Tax and Quota under Time Consistent Trade Policies
Authors: Gervais Jean‐Philippe , Lapan Harvey E.
Published: March 2003

This article investigates the policy active importers' incentives and welfare implications of using production and trade policies in a dynamic framework where production decisions occur before consumption decisions. We show that the equilibrium for production taxes and quotas are not equivalent, and that each equilibrium depends on whether the trade policy instruments are tariffs or quotas. Under import quotas, the equilibrium policy is to tax domestic production, whereas under a tariff either a production tax or subsidy may be optimal. We also show that a collective agreement to ban production policies is likely to be welfare‐improving in many circumstances.
Fixed Costs, Efficient Resource Management, and Conservation
Authors: Zhao Jinhua , Zilberman David
Published: March 2003

This article develops a framework to analyze the impacts on resource development of efficient management practices that account for possible resource conserving technological changes. Compared with the traditional management practice ignoring these changes, efficient management may not delay or reduce resource development, depending on the level of the changes. Under efficient management, a higher probability of resource conserving technologies may not delay or reduce resource development. These ambiguities are due to the existence of fixed and increasing marginal costs in resource development.
Recycled Effluent: Should the Polluter Pay?
Authors: Feinerman Eli , Plessner Yakir , DiSegni Eshel Dafna M.
Published: March 2003

A coastal city can either dispose of recycled effluent by dumping it in the sea, or transfer it to farmers in its hinterland for irrigation. Who should bear the cost of recycling? Three alternatives are employed: a central planner who maximizes the combined utility of city and farmers; regulation by prices, for which purpose we develop the city's supply function;and a bargaining framework for the allocation of costs. The main conclusions are that “the polluter pays” rule cannot be justified in principle and that bargaining may result in inefficiency. We demonstrate with an example from Israel that essentially conforms to the theoretical structure.
Regulating Broiler Contracts: Tournaments Versus Fixed Performance Standards
Authors: Tsoulouhas Theofanis , Vukina Tomislav
Published: March 2003

Grower discontent with tournaments as mechanisms for settling poultry contracts can largely be attributed to the group composition risk that tournaments impose on growers. This article focuses on the welfare effects of a widely advocated regulatory proposal to prevent integrator companies from using tournaments and replace them with schemes that compare performance to a fixed standard. The analysis shows that the mandatory replacement of tournaments with fixed performance standards, absent any rules that regulate the magnitude of the piece rate, can decrease grower income insurance without raising welfare. However, replacing tournaments with fixed performance standards can simultaneously increase income insurance and welfare, provided that the magnitude of the piece rate is also regulated.
Price Discrimination and Pricing to Market Behavior of Canadian Canola Exporters
Authors: Brown Jennifer
Published: March 2003

The role of exchange rate fluctuation on the pricing behavior of Canadian canola exporters to Japan, Mexico, and the U.S. is examined using a model identifying noncompetitive and exchange rate related pricing behavior. Price discrimination was identified for Canadian canola exports to the three destinations over the period of 1993'99. Results also suggest that Pricing to Market strategies were employed for Japanese imports. Canadian canola exporters used local currency price stabilization to dampen the effects of relative price changes in the Japanese currency, perhaps linked to the large size of Japanese imports relative to Mexico and the U.S.
Corporate Governance: Lessons From Barings
Authors: Hogan W.P.
Published: March 2003

The collapse of Barings plc at the end of February 1995 brought two official inquiries which reported very promptly. The British report was made public on 18 July, just over four months after the failure. The Singaporean investigation into the workings of the Barings subsidiary was completed at the beginning of September. Revelations about the events and courses of problems are colourful as well as damning. There are issues in corporate governance arising from this experience. However, an analysis of the workings of Barings plc is essential if substantial understanding of what took place and why is to be secured. The British report did not attempt such an analysis. This oversight hampered analyses of the handicaps to effective funds and risk management as well as failure to develop informative and accurate accounts for auditing, credit control and funding purposes. The governance implications are treated exhaustively.
Pressure and Politics in Financial Accounting Regulation: The Case of the Financial Conglomerates in the Netherlands
Authors: Van Lent Laurence
Published: March 2003

This article examines the political process of promulgating two controversial laws which pertain to the reporting of Dutch financial conglomerates. Central to the study is the exploration of the lobbying efforts observed during the process, and the interaction between the government, the supervisors of banks and insurance companies, the industry and its associations, and the users and auditors of annual reports of financial conglomerates. Previous studies in accounting‐rule development have often ignored influences that do not fall within the formal regulatory procedures. By adopting an inductive research approach, this study explores in some detail the behaviour of participants, including their use of informal lobbying methods. Pluralist theory is used to explain the nature of the political process and the behaviour of interested parties. The findings indicate that the Dutch political process in accounting matters is indeed pluralistic. Although auditors and producers of accounts seem to have greater possibilities to participate, the users of corporate reports are able to voice their opinion effectively. Overall, the users' preferences were acknowledged in the final rules governing the reporting by financial conglomerates.
The Relevance of AAS 29 to the Australian Public Sector: A Cause for Doubt?
Authors: Jones Stewart , Puglisi Nina
Published: March 2003

In December 1993, the AARF issued Australian Accounting Standard AAS 29, Financial Reporting by Government Departments. The Standard requires all Australian government departments (GDs) to adopt comprehensive accrual financial reporting no later than 30 December 1996. Given the magnitude and potential financial cost of these reforms, the claimed benefits of AAS 29 justify empirical investigation and scrutiny. The purpose of the present study was to test underlying rationales of AAS 29 by reference to ratings and opinions of 172 federal and state GDs in Australia. The key rationale of AAS 29 is that accrual‐based financial reports will be relevant to the economic decision making of GDs and their external users. While the empirical results presented in this paper are confined to the internal viewpoints of senior GD officials and representatives, they cast into doubt the relevance of AAS 29 in the Australian public sector.
Information Provided by Accrual and Cash‐Flow Measures of Operating Activities
Authors: Ingram Robert W. , Lee Thomas A.
Published: March 2003

This article examines accrual and cash‐flow measures useful for observing companies' financing, investing and operating activities. It addresses the information provided jointly by income and operating cash flow, and reveals that information provided by these accounting measures is dependent on their relative magnitudes. A consistent pattern of income in excess of operating cash flow, with both measures appropriately adjusted and scaled, indicates superior company growth. Income and cash‐flow patterns are associated significantly with various company financing, investing and operating attributes. Empirical tests confirm that both income and operating cash flow are important for observing company performance and prospects when considered jointly and when interpreted with respect to accounting measurement theory. At least for many companies, the results do not support the conventional wisdoms that accounting measures of income and operating cash flow converge over long periods of time and that earnings provide a reliable basis for cash‐flow prediction.
The Influence of Regulation on the Publication of Consolidated Statements
Authors: Walker R. G. , Mack Janet
Published: March 2003

The impact of regulation on the publication of consolidated statements by Australian listed companies is examined by reviewing evidence of the first use of consolidated statements by holding companies listed on the Sydney Stock Exchange, excluding companies incorporated elsewhere, and relating that evidence to the chronology of the development of statutory, professional and stock‐exchange regulations permitting or prescribing the use of consolidated statements. The findings are that the wider adoption of consolidation accounting has been associated with changes in statutory and other forms of regulation. These findings contradict the conclusions of earlier studies (Whittred, 1986, 1987, 1988), namely that regulation was of minimal influence, and that the adoption of consolidation accounting was explainable by ‘contracting cost variables’. Major flaws identified in these earlier studies were an apparent failure to recognize that Sydney listed companies may have been subject to regulations established in other jurisdictions, and a crucial misinterpretation of the history of Australian stock exchange listing rules, which led to the misidentification of listed companies as having adopted consolidation ‘voluntarily’.

The findings also underline comments made previously in critiques of other papers which have tested hypotheses incorporating agency or contracting costs. While historical analysis can assist the exercise of judgment in the classification of events, those who rely on historical evidence in the development of theories and in framing hypotheses should use that evidence with care, having regard to pertinent contextual factors.
The Evolution of Standard Costing in the U.K. and U.S.: From Decision Making to Control
Authors: Fleischman Richard K. , Tyson Thomas N.
Published: March 2003

Decision making and control are two fundamental components of industrial management that are aided by accounting information. This article traces the evolution of standard costing in the U.K. and U.S. and describes how it has served these two purposes over time. At the start of the industrial revolution, standard costing, in the form of past actual costs, aided managers in make‐or‐buy, pricing, outsourcing and other routine and special decisions. In the late nineteenth century, as the mass production of homogeneous products became more common, predetermined, norm‐based standard costs were promoted as the means to control operations and reduce waste. The use of predetermined costs was recommended by both academic and professional branches well into the twentieth century. Since the mid‐1980s, norm‐based standards have come under fire for not providing appropriate strategic signals in an era of global competition, continuous improvement and perpetual cost reduction.

This article compares the nature of standard costing practices in the British Industrial Revolution with those that evolved in the U.S. under scientific management. The enquiry is not limited to double‐entry systems and, like Miller and Napier (1993), the domain is broadened to include other forms of cost‐keeping practices. We utilize primary and secondary sources to argue that the environment and rationales for standard costs have changed fundamentally over time. It is speculated that in the future standard costing will be used far less for individual accountability or operational control, but will return to its decision‐making roots in the form of long‐run cost targets that benchmark the success of continuous cost‐reduction efforts.
The Evolution of Bookkeeping in China: Integrating Historical Trends with Western Influences
Authors: Aiken Maxwell , Lu Wei
Published: March 2003

This article reviews the development of Chinese single‐entry bookkeeping, the emergence of Chinese double‐entry bookkeeping and evolutionary trends from single entry to double entry. It identifies the invention and basic nature of Chinese double‐entry methods which have reflected cultural changes from within the society. Given this historical perspective, conclusions are drawn about the nature of social and economic change in China and the impact of outside cultural influences. Of particular importance to the timing of progress is the primitive form of double entry entitled Three Feet. This had its gestation about the same time as European innovations were occurring in response to economic and cultural changes which sponsored bookkeeping methods as described by Pacioli. A critical question for examination at present is whether cultural evolution in China can yet support complete integration of its own accounting principles and fundamental philosophies with Western accounting methods. This has proved to be difficult in the past.
An Examination of Comment Letters Filed in the U.S. Financial Accounting Standard‐Setting Process by Institutional Interest Groups
Authors: Saemann Georgia
Published: March 2003

With the advent of some form of IASC‐type harmonized accounting standards likely, it has been suggested that they are likely to be based to a large extent on U.S. accounting standards promulgated by the FASB. This study of the content of comments filed on twenty controversial FASB accounting standards by four institutions in the United States is timely. Those comments are assumed to represent the views of financial‐statement users, attestors and preparers: FEI, IMA, AIMR, and AICPA. The adopted standards’ requirements are also examined in the context of these comments to provide insights about accounting characteristics on which the FASB has aligned with different interest groups. These characteristics include uniformity in accounting methods, disclosure, volatility in financial reporting, and conservatism. The results indicate that AIMR, in representing users, is the most constant in its positions. The two preparer organizations (FEI and IMA) took user‐oriented positions on some issues, but showed a strong tendency to oppose costly disclosures and requirements associated with volatility. Comments from the AICPA were diverse but the study revealed an overall bias toward user views. Overall, the FASB aligned most closely with users and the AICPA. FASB tended to adopt standards that led to greater uniformity but compromised on costly disclosures and requirements associated with volatility and conservatism.
Takeovers and Corporate Governance: Whose Interests Do Directors Serve?
Authors: Merrett David , Houghton Keith
Published: March 2003

Using internal records of board meetings, this research explores issues relating to the motivation of directors’ action during takeover negotiations. The records relate to a time period when regulation was low and directors had ample opportunity to engage in adverse selection and moral hazard. In such circumstances, it might be supposed that they would have sought to protect their own tenure rather than seek to maximize shareholder wealth by recommending acceptance of a bid. However, in the case study under examination the directors worked hard to maximize the bid price by auctioning the company despite having little equity exposure themselves. The directors also sought to protect the interests of the staff when negotiating with bidders. Intentionally this behaviour was not disclosed to the shareholders and, on occasion, threatened the success of the negotiations. The article concludes that the actions of the directors were motivated by strong reputational effects not widely recognized in the contemporary literature as being a force that powerfully drives corporate governance.
Effects of Feedback and Task Predictability onTask Learning and Judgment Accuracy
Authors: Hirst Mark , Luckett Peter F. , Trotman Ken T.
Published: March 2003

This study examines the effect of different types of feedback on task learning and judgment accuracy across different levels of task predictability. The results of a laboratory study show that outcome feedback, alone, and in combination with task properties feedback, promotes judgment accuracy for both high and medium levels of task predictability. The beneficial impact of outcome feedback resulted from learning effects. Specifically , the outcome feedback improved judgment accuracy because of improved task knowledge and, in contrast to previous psychology research, it did not cause a deterioration in judgment consistency where task predictability was less than perfect. The results suggest that the negative effects of outcome feedback on judgment accuracy found in the psychology literature, where task predictability is less than perfect, may be limited in accounting settings where judges have experience with the task.
Chambers as Educator and Mentor
Authors: Wolnizer P. W. , Dean G. W.
Published: March 2003

Adopting a personal tone, this article explores Ray Chambers’ impact on accounting and management education and through that his impact on accounting thought and practice. As mentor and colleague for over a quarter of a century, Chambers left many wonderful impressions, some of which are described here. The article describes some of the influences on the innovations and approaches of a great teacher. Familial and early working life experiences are shown to have greatly influenced his views on accounting, finance and management, and hence his innovations in accounting and management education at both the Sydney Technical College and the University of Sydney. His research, writings and teachings continually stressed the need to apply common sense to common experience. The article concludes by noting Chambers’ perennial pursuit of seeking evidence to test his ideal solution to eradicate the follies and infelicities that plagued then (and still plague today) accounting thought and practice. Chambers regarded having such an ideal as the essence of being a researcher.
Founding Abacus: Frustration to Fulfilment
Authors: Wells Murray
Published: March 2003

This article explores the visions and frustrations of Chambers as he and others sought to establish a leading international academic accounting journal in the early 1960s. The imposition of rigorous standards and the lack of initial interest from academics around the world were two frustrations that Chambers had to overcome. He remained flexible regarding what subject matter and method would be acceptable in research studies encompassing the broad spectrum of accounting and business studies. Abacus sought to provide an outlet for papers (of larger length if needed) analysing practical accountancy and business studies and comparing details observed with the prevailing or proposed outlines of knowledge in the relevant area. Finally, the article reveals insights into Chambers’ doggedness as he sought to overcome the frustrations and eventually managed the process resulting in Abacus first being published in 1965.
Reflections of an Australian Contemporary: The Complementarity of Entry and Exit Price Current Value Accounting Systems
Authors: Barton Allan
Published: March 2003

One of the great controversies in accounting concerns the use of current value accounting systems in place of historical cost systems, and the relative merits of the two current value systems proposed—CCA and CCE. Chambers developed and argued the case for CCE. In this essay, the fundamental nature of each system is outlined and related to the economic theory of the firm and its associated theory of optimum resource allocation. It is shown that both CCA and CCE theories are conceptually valid and provide necessary information for efficient resource allocation decisions; however, neither system can provide all the ex post information required and they complement each other.
Research Misconduct in Accounting Literature: A Survey of the Most Prolific Researchers’ Actions and Beliefs
Authors: Bailey Charles N. , Hasselback James R. , Karcher Julia N.
Published: March 2003

Incidents of research misconduct, especially falsification, in the hard sciences and medicine have been widely reported. Motives for misconduct include professional advancement and personal recognition. Accounting academics are under the same tenure, promotion and recognition pressures as other academics; and, without the life‐and‐death issues of medical research, rationalizing misconduct in accounting research seems much easier. It is reasonable to assume that dishonesty has occurred, even if little evidence exists about its prevalence. Further, accounting research can influence tax policy and market conditions, affecting people’s lives. This study is, to our knowledge, the first attempt to survey accounting researchers directly as to their ethical practices; it uses the randomized response technique of addressing sensitive questions. To maximize its relevance to the most respected accounting research, this questionnaire was sent only to the most prolific researchers at U.S. colleges and universities—those who have published in the ‘top thirty’ accounting journals. The results indicate that serious misconduct has occurred among these established accounting researchers. The estimated percentage of seriously tainted articles in the top thirty accounting journals, based on self‐reporting, is about 4 per cent, while the respondents on average believe that about 21 per cent of the literature is tainted. Faculty who were tenured more recently provide higher estimates of the falsification rate, and attribute more of the cause to external factors like tenure pressure. The article concludes by discussing implications and offering policy recommendations.
Distortions of History, Accounting and the Paradox of Werner Sombart
Authors: Funnell Warwick
Published: March 2003

Sombart’s belief that double‐entry bookkeeping was essential to the development of capitalism has been criticized by both accounting and economic historians. His substantive conclusions concerning double‐entry bookkeeping have been rejected mainly because they result from his selective and self‐serving rendition of history. Accounting historians have been preoccupied especially with denouncing his exaggerated appreciation of double‐entry bookkeeping. They argue that he attributes far too much importance to its potentialities in preference to the more sober reality found in the historical record. This paper shows that in their denunciation of Sombart’s conclusions and his faulty history, accounting history researchers have been seemingly oblivious to the way in which Sombart’s anti‐Semitism shaped his appreciation of double‐entry bookkeeping. He accuses Jews, as exceptional exponents of rational profit calculation, of perpetrating the evils of capitalism. His views of double‐entry bookkeeping and the history of economic systems betrayed a strong attachment to a romantic conception of German history which supported German anti‐Semitism of the late nineteenth and early twentieth centuries. Sombart’s denunciation of Jewish influences extended from their business practices to observations of Jews that were consistently anti‐Semitic and sympathetic to those of the Nazis.
The Accounting–Clinical Interface—Implementing Budgets for Hospital Doctors
Authors: Lapsley Irvine
Published: March 2003

The implementation of budgets for hospital doctors has been the subject of study in many countries. A general conclusion to emerge from these various studies is that of failure—of an inability of accounting information to make meaningful connections with the world of the hospital doctors. A distinguishing feature of many policy initiatives which seek to reform practice in the state‐owned or state‐financed institutions has been the perspective adopted by policy‐makers—that of modernizers or reformers who pursue their policies with relentless conviction, even where there is no sign of successful implementation. This article presents a contrasting view, in which a more complex understanding of the reform process is necessary, to explain successful clinical budgeting.