This paper examines call behavior of corporate issuers of non-convertible bonds. Evidence from a sample of 102 calls indicates that the market value of the called bonds is usually below the call price at the time of the announcement. The stock price reactions to call announcements are positively related to the direction of the change in leverage. When the call relaxes restrictive covenants, the firm on average pays a larger premium to call debt. The premium is a minimum estimate of the potential opportunity costs of restrictive covenants.

An interest group model of the determinants of policies which directly re distribute income to low income persons is developed and tested. The model assum es that altruistic taxpayers, nonaltruistic taxpayers, and needy beneficiaries f orm separate interest groups from which politicians seek support. Benefit levels depend on variables such as taxpayer income and the price of benefits but, unlike median voter models, the model also implies a role for interest group strengt h and competition between political parties. The author uses latent variable met hods and data on the Aid to Families with Dependent Children program to demonstr ate empirical support forthe model.

Résumé. Soixante‐deux vérificateurs/praticiens ont pris part à une expérience d'estimation du solde d'un compte. Ayant reçu au préalable un matériel d'apprentissage à la fois écrit et oral, ils ont utilisé quatre techniques de déduction (FDC, FDP, EPE, et EFH) afin de quantifier leurs croyances subjectives ayant trait au solde de comptes clients d'un cas de vérification. Leurs réponses furent par la suite comparées aux résultats d'une étude de simulation portant sur six cents (600) échantillons, au moyen de la règle de pointage quadratique, de même qu'à la distribution résultant d'un consensus parmi tous les sujets en utilisant la mesure de Kolmogorov‐Smirnov. Les résultats montrent que la technique de déduction FDP produit la distribution de probabilités préalables la plus précise pour utilisation dans le contexte de l'analyse Bayesienne. Les trois autres techniques de déduction se sont révélées égales entre elles, dans la mesure où leur précision était inférieure à celle de la technique de déduction FDP.

Sixty‐two practising auditors participated in an account balance estimation experiment. Having been provided with written and oral training material, they used four elicitation techniques (CDF, PDF, EPS, and HFS) to quantify their subjective beliefs regarding the accounts receivable balance of an audit case study. Their responses were compared to the results of a 600 sample simulation study, using the quadratic scoring rule. Their responses were also compared to the consensus distribution of all subjects using the Kolmogorov‐Smirnov measure. The results indicated that PDF is the elicitation technique generating the most accurate prior probability distribution for use in Bayesian analysis. The other three elicitation techniques were about equal in the degree to which they were less accurate than the PDF technique.

The concept of an American underclass has become the subject of increasing discussion. Although the term does not enjoy a precise definition, most researchers acknowledge that the underclass condition involves more than being cash poor. Members of the underclass are also believed to have attitudinal and behavioral deficiencies. Other terms that have been used to describe this group over the years include: dangerous classes, other Americans, culture of poverty, and lower classes (see Ken Auletta, 1981). Within this area of inquiry, several researchers have chosen to study what has been termed the black underclass. The purpose of this paper is twofold. First, the appropriateness of the data that are used to characterize members of the black underclass will be examined. Second, the argument that perhaps the most viable solution to the problems of the black underclass are community self-help programs, rather than government programs, will be discussed.

I NDUSTRIAL POLICY has turned out to be an idea with a brief career. In the summer of 1984, after Rhode Island's electorate voted 4-1 against a bond issue to give the state its own policy, Robert Reich observed that industrial policy is one of those rare ideas that has moved swiftly from obscurity to meaninglessness without any intervening period of coherence (Reich 1984, p. 32). This from perhaps its chief advocate. In the fall, the Reagan reelection sealed the issue, ruling out a U.S. policy for years to come. Still, the policy debate raised two central questions about economic change. (1) Why do older industries tend to show a retardation in output and employment growth? (2) Has industry aging eroded American competitiveness, so that the U.S. is in some sense losing the economic race? (Lester Thurow 1984). To get at answers to the two questions, this paper offers a review of what economists have had to say about industry aging, economic maturity, and market-generated renewal. Because the subject matter is so vast, it will prove useful to begin with a guide to the territory, a roadmap. I. Preliminaries