This paper re-examines the case of Citizens Utilities, a firm with one class of common stock which pays stock dividends and one which pays taxable cash dividends. John Long's (1978) study of the two shares' relative prices suggests that investors may prefer cash dividends to equal-sized stock dividends. This paper finds that the cash dividend share's ex-day price decline is less than their dividend payment. Stock dividend shares fall by nearly their full dividend. The disparity between ex-day dividend valuation and the observed prices of the two shares is inconsistent with some explanations of the demand for cash dividends.

For a principal with many agents, rank-order contracts remain incentive compatible even when information about agents' performance is known only to the principal because the total payment from the principal to all agents taken together is independent of the outcome that occurs. Under wider conditions than those considered previously in the literature, there is shown to exist a rank-order contract equivalent, exactly or approximately, to any (nonlinear) piece-rate contract. Under those conditions, therefore, results that depend on the unenforceability of piece rates under such asymmetric information disappear if rank-order contracts can be used.

This paper will exploit the structural similarity of the two period overlapping generations model and the dynamic capital accumulation model to provide a pricing characterization of Pareto optimal distributions. With some very simple structural interpretations, the techniques which were developed to characterize efficient capital accumulation, apply directly to the overlapping generations model of the most general form; where generations consist of heterogenous consumer types of varying lifespans.

Among fraternal pairs from the Wisconsin Longitudinal Study, we model the effects of measured and unmeasured family background factors, mental ability, and schooling on occupational status and earnings. The models are estimated from incomplete data with corrections for measurement error, and they permit direct comparisons of within- and between-family regressions. We find no evidence that the effects of family background lead to a bias in the effect of mental ability on schooling or in the effects of schooling on occupational status or earnings. Family background does have large independent effects on ability, schooling, and, to a lesser degree, socioeconomic attainment.

Among fraternal pairs from the Wisconsin Longitudinal Study_(1980), the authors model the effects of measured and unmeasured family back ground factors, mental ability, and schooling on occupational status and earnings. The models are estimated from incomplete data with corrections for measurement error, and they permit direct comparisons of within- and between-family regressions. The authors find no evidence that the effects of family background lead to a bias in the effect of mental ability on schooling or in the effects of schooling on occupational status or earnings. Copyright 1986 by University of Chicago Press.

Previous static analyses of the work disincentive effects of welfare programs are extended to a dynamic context. Using a sample of continuous longitudinal labor market histories, estimates are derived for welfare-nonwelfare differences in labor market flows among the states of employment, unemployment, and nonparticipation. The estimates are used to identify the main sources of the lower employment and labor force participation rates and higher unemployment rate of welfare recipients. The findings indicate that welfare programs have substantial effects on virtually every labor market transition examined but that the primary source of the static work disincentive effect is slower entry into employment.

Auditing, Auditor judgement, Auditor expertise

[In this paper several results are established which provide for the consistent estimation of macroeconomic effects using cross-section data, for general assumptions on the movement of the population distribution over time. We show that macroeconomic effects are always consistently estimated by linear instrumental variables coefficients, where the instruments are determined by the form of distribution movement. This leads to a natural way to assess the biases in OLS coefficients as estimators of macroeconomic effects, provides a nonparametric macroeconomic interpretation of linear instrumental variables coefficients when the true microeconomic behavioral model is unknown, and gives a nonparametric interpretation of standard regression decomposition statistics such as R extasciicircum2 relative to the information costs of nonlinearities in aggregation. All of the results are valid without imposing any testable restrictions on the cross-section data.]