Abstract. This paper examines the effects of depreciation, taxes and inflation on the optimal timing of asset replacement in accordance with the Canadian tax laws. The main findings are that an increase in the capital cost allowance rate will delay (accelerate) replacement of fixed assets at low (high) levels of capital cost allowance rates, and that an increase in the annual inflation rate will delay (accelerate) replacement of fixed assets at low (high) levels of inflation. The applications of the replacement model are illustrated with numerical examples.

Résumé. Cet article examine les conséquences de l'amortissement, de l'impôt et de l'inflation sur le choix du moment optimal du remplacement d'actifs, conformément au régime fiscal canadien. Les résultats importants dégagés sont à l'effet qu'un accroissement du taux d'allocation du coût en capital retardera (devancera) le remplacement d'immobilisations pour des niveaux faibles (élevés) de taux d'allocation du coût en capital, et qu'un accroissement du taux annuel d'inflation retardera (devancera) le remplacement d'immobilisations pour des niveaux faibles (élevés) d'inflation. Les applications du modèle de remplacement sont présentées au moyen d'exemples numériques.

We address the monopoly problem of designing and pricing a product line of goods distinguished by different quality and warranty levels. Consumers vary in their evaluations of these attributes, so that the problem is one of screening. It is sufficiently complex that the local approach commonly used does not work. Instead, we use new techniques for dealing with incentive constraints between nonadjacent consumer types. These techniques allow us to characterize optimal allocations that may not be monotonic. In particular, although the more eager types of buyer do pay higher prices and yield the monopoly higher profit, they may receive lower quality or lower warranty coverage. We find preference restrictions that restore monotonicity: concave risk tolerance implies that warranty coverage increases in type, and constant absolute risk aversion implies that quality increases in type.

William J. Moore, John Raisian, Union-Nonunion Wage Differentials in the Public Administration, Educational, and Private Sectors: 1970-1983, The Review of Economics and Statistics, Vol. 69, No. 4 (Nov., 1987), pp. 608-616

[This study investigates the influence of both the state corporate income tax rate and the form of the income tax base structure on foreign investment in manufacturing assets. An econometric model of foreign investment is derived from a supply-oriented theory of regional investment. That is, the decision to develop productive capacity in one region as opposed to another is due to regional advantages. Empirical results suggest that tax structures that use the unitary method of accounting have a substantial impact on the amounts of foreign investment. On the other hand, business income tax rates appear to have little impact.]

W. Kip Viscusi, Michael J. Moore, Workers' Compensation: Wage Effects, Benefit Inadequacies, and the Value of Health Losses, The Review of Economics and Statistics, Vol. 69, No. 2 (May, 1987), pp. 249-261

Abstract ABSTRACT: This study investigates the influence of both the state corporate income tax rate and the form of the income tax base structure on foreign investment in manufacturing assets. An econometric model of foreign investment is derived from a supply-oriented theory of regional investment, That is, the decision to develop productive capacity in one region as opposed to another is due to regional advantages. Empirical results suggest that tax structures that use the unitary method of accounting have a substantial impact on the amounts of foreign investment. On the other hand, business income tax rates appear to have little impact.