The check-off system now in general use by the United Mine Workers, 730. — Why the operators have granted it: a precedent in the existing check-off for supplies, and in the presence of the check-weigh-man, 731. — History of the check-off system for union dues, 734. — Its main features, 735. — The unions' "card day" done away with, 737. — Effect of the check-off in strengthening the union, 738. — It acts to bring about virtually, tho not formally, the closed shop, 739.

The purpose of this paper is to investigate the impact of legal penalties on audit quality under different legal regimes. We investigate whether audit quality is affected differentially due to the complexity inherent in legal regimes and the frequency of imposing legal penalties. Economic theory predicts that players adopt equilibrium strategies that reflect the expectation that a penalty will be incurred, but the actual occurrences of penalties, if consistent with this expectation, should not prompt an individual to modify his or her strategy. However, learning theory suggests that players' choices will be repeated in the future based on outcomes. We found that penalties triggered both increases and decreases in effort, and seemed to introduce a “shock” that increased the variability of effort. We also observed a “funnel” effect — that is. greater changes in effort closer to the imposition of penalties, and smaller changes as more periods go by without a penalty.

In this paper we report the results of an experiment designed to investigate the potential benefits of more accurate costing systems. Subjects in our experiment participated in one of four single‐person decision making settings, which varied in terms of the accuracy of costing systems (less accurate versus more accurate cost reports) and in the complexity of the economic environment (less heterogeneous versus more heterogeneous products). The costing systems provided imperfect reports that subjects could use to select forecasts of future product costs. Forecast accuracy determined the resulting payoffs for subjects. In addition to having the cost reports when making forecasts, subjects also observed the association between forecasts and actual profits for previous periods and the rank ordering of the products' relative usage of resources at each of the production processes. The results from our experiment indicate that subjects did not select forecasts based only on reported costs. Rather they updated forecasts using profit feedback and the supplemental rank information about the products' relative usage of resources. We found that profits decreased as the complexity of economic environment increased but increased with the accuracy of cost reports. The profits associated with less accurate costing systems, however, were not as low as we would have predicted had the subjects used the cost reports as their forecasts. In fact, using profit feedback, subjects were able to converge toward optimal profits even with imperfect cost information.

An index of Inequality is constructed which decomposes into two components, corresponding to vertical and "horizontal" equity respectively.Horizontal equity Is defined in terms of changes in the ordering of a distribution.The proposed index is a function to two inequality aversion parameters.One empirical application is for comparison of a pre-tax distribution with a post-tax distribution, and an example of this is given for the distribution of incomes in the UK in 1977.There is a trade-off between "horizontal" and vertical equity, and for particular combinations of the inequality aversion parameters the original distribution.willbe preferred to the final distribution.The paper concludes with an application of the proposed index to a model of optimal taxation.

This paper deals with a situation of middle-man behavior between two otherwise separated economies. A two-person noncooperative exchange game is proposed whereby each player's strategy consists of two parts taken in a sequence: a price strategy, to be followed by a demand strategy. The concept of a special kind of mixed strategies is introduced, and a solution is defined in terms of a Nash equilibrium pair of such mixed strategies. It is shown that a trivial class of equilibria always exists, and that under certain conditions, more interesting nontrivial equilibria can exist as well.

Recently, Watson and Engle (1985) considered the problem of testing for a constant regression coefficient against the alternative hypothesis that the coefficient follows a stationary first-order autoregressive process. This alternative is the return to normalcy model proposed by Rosenberg (1973). Watson and Engle observe that the unknown autoregressive parameter is not identified under their null hypothesis and they suggest the use of the test procedure proposed by Davies (1977) for such situations. Davies' approach involves applying Roy's Union-Intersection Principle to the class of test statistics one gets by assuming the non-identified parameter takes a known value. Unfortunately, Watson and Engle's test statistic has no closed form and is approximated by maximisation using a grid search. Furthermore, both its finite sample and asymptotic distributions are unknown under the null hypothesis although they do provide a method of calculating a critical value whose asymptotic size can be bounded from above. In this note we suggest a different approach that helps overcome these problems. Rather than testing for zero variance in the autoregressive process as Watson and Engle suggest, we propose testing for lack of variation in the regression coefficient over time. This allows the construction of a locally best invariant (LBI) test using the results of King and Hillier (1985). Because the resultant test statistic is a ratio of quadratic forms in normal variables, standard computational techniques can be used to calculate exact and approximate critical values. A further advantage of this alternative test is that it is also LBI against the hypothesis that the coefficient follows a random walk process.

THIS paper emphasizes the role of the industrial structure of labor demand, as it influences the array of hours of work from which women can choose, as a factor affecting labor force participation rates of women. While the rapid increase in women's labor force participation' has received a great deal of attention from economists (Long, 1958; Mincer, 1962), and the cross-sectional variation also has been studied intensively (Cain, 1966; Bowen and Finegan, 1969; Cain and Watts, 1973; Schultz, 1974), approaches to this topic have stressed micro influences and, since Mincer's influential work, have attached primary importance to obtaining consistent estimates of the income and substitution effects of conventional price theory. Recently, however, writers (Dickinson, 1974; Heckman, 1974) have suggested that in many contexts this approach should be modified to reflect the discrete set of choices workers actually face in the labor market. The manner in which this observation affects the present analysis can best be appreciated if we briefly consider the discussion of the labor supply decision found in the usual textbook analysis of the problem (e.g., Fleisher, 1970 and Rees, 1973). The conventional view is that the woman's market-determined wage sets the rate at which she can trade off leisure, usually taken to represent all non-market uses of time, for income. The representative individual is then assumed to compare her rate of substitution between income and leisure to the market rate, and to allocate that quantity of time to the market that equates the subjective and market rates of substitution at the margin. Nonparticipants in the labor force are assumed to be those women for whom the subjective rate of substitution between income and leisure exceeds the market rate at all potential levels of labor supply, during the period under study. A feature of this analysis that seems particularly objectionable is the assumption that the set of market opportunities allows for a continuous range of choice of the quantity of labor to be supplied, from, say 0 to 60 hours per week, at a relatively constant wage. This is clearly contrary to the facts. For example, a recent analysis of the data gathered for the University of Michigan's Panel Study of Family Income Dynamics (Dickinson, 1974) reports that less than 20% of all workers interviewed were free to optimize their work hours without significant reductions in their wage rates. While it may be true that the conceptual ideal of the continuous range of opportunities could be approximated by an individual choosing among a variety of occupations and industries, this is likely to apply only before many career and personal decisions have been made. With the passage of time, many of what were once decision variables to an individual, such as educational attainment, marital status, and family size, are likely to have become parameters that now serve to define the range within which choice can be exercised. For many women, the labor market in which they work can reasonably be viewed as such a constraint and the industrial structure of that Received for publication December 31, 1976. Accepted for publication May 12, 1977. * University of Texas at Austin. This report was prepared for the Office of the Assistant Secretary for Policy, Evaluation and Research, U.S. Department of Labor, under contract/purchase order no. B9J6-389 1. Since contractors conducting research and development projects under Government sponsorship are encouraged to express their own judgment freely, this report does not necessarily represent the official opinion or policy of the Department of Labor. The contractor is solely responsible for the contents of this report. IBetween 1900 and 1970 the labor force participation rates of women increased from 20% to 40%. A major component of this increase was among women with children. Participation rates for mothers with children under 6 increased over 150% between 1950 and 1972, while rates for mothers with children between 6 and 17 increased by over 60% during the same period.

THE monocentric urban area is without doubt the best known theoretical construct in the literature of urban economics. Many variations exist, but all share certain basic features: a city is located about a node on an otherwise featureless plain. This node, the Central Business District (CBD), is the only concentrated place-or the only place-of employment and shopping. Workers live in housing located outside the CBD and travel to and from their workplaces a fixed number of times each day over a uniformly available, radial transportation system. Transportation costs increase with distance of the residence from the CBD and may include either or both money and time. Households purchase their housing and other commodities to maximize a utility function, not including transportation as an input, subject to a budget constraint net of transportation expenses. As is well known, a number of propositions can be derived from these principal assumptions and some subsidiaries; for example, the existence of downward sloping land rent and housing price surfaces and the spatial segregation of households by income class and preferences (Muth, 1969). What is possibly as well known as this basic model is the difficulty of making the assumptions more realistic. As Beckmann (1974, p. 99) has noted, even minor variations tend to run into a thicket of mathematical difficulties. The effects of multiple workplaces, restrictive zoning, local amenities, and racial discrimination are only a few of the features of real urban areas that can be incorporated into the basic model only with great difficulty or not at all. Since analytical solutions to more realistic models have been difficult or impossible, there has been some recent effort to use computer simulation to examine their properties. Mills, for example, has examined the characteristics of a complex model both with congestion costs and with an efficiently priced transportation system, finding the city's land area in the latter case to be greater than in the former. This result, he suggested, would surprise some persons (1972, ch. 8). Hartwick (1974) has used the same model to study the conditions for spatial segregation or integration of various productive activities, asking, in effect, in what circumstances will persons commute to distinct work areas American-style rather than live above local shops European-style. Zeller (1971) has devised a computer simulation model to portray the bid-rent curves of firms making intrametropolitan location decisions. A particularly interesting possibility has become available recently from the work of various persons, notably Scarf (1973), on the computation of equilibrium prices for competitive economies. The algorithms developed are capable of calculating equilibrium prices, demands and supplies for an economy given only initial resource endowments and demand and supply functions. No more than quite modest restrictions need be imposed on the functions, and the characterization of the economy by number of commodities, types of consumers, and interrelationships in production can be quite rich. Since the characteristics of the various urban models are simply those of competitive economic systems in equilibrium, there would seem to be an obvious opportunity to explore the properties of quite complex models with a very general technique. As might be expected, however, efforts to apply the algorithms to models of spatial economies encounter their own problems, both technical and conceptual. To my knowledge, the first successful application to spatial Received for publication October 3, 1975. Revision accepted for publication September 14, 1976. * An earlier version of this article was presented at the European Conference on Housing Markets, Mons, Belgium, June 1976. I am indebted to Curtis Harris for careful reading and perceptive comments on earlier drafts. Herbert Scarf, Barbara Bergmann, Charles Clotfelter, Charles Lieberman, Michaei Murray, and others have also made helpful comments. Computer funds were provided in a faculty research grant from the University of Maryland Computer Science Center. Copies of the algorithm described in this paper are available upon request.

To have one central bank governor address you today may be regarded as a misfortune, but to invite two looks like carelessness! It is a great honour to be invited by this year’s President-Elect, Marty Feldstein, to deliver the Ely lecture. Marty has been my teacher, mentor, colleague and friend for over thirty years, and I never cease to be amazed by the energy and imagination which he devotes to the study of economic problems. I got to know Marty during my time as a Kennedy Scholar at Harvard in 1971. The Kennedy Scholarships form one part of Britain's national memorial to President Kennedy. The other part is an acre of land, now American territory, at Runnymede. At the ceremony to open the Runnymede memorial in 1965, Prime Minister Harold Wilson remarked about President Kennedy that "his eyes were on the horizon, but his feet were on the ground”. Almost thirty years earlier Richard T. Ely published his autobiography entitled "Ground under Our Feet". Whereas I found the experience of coming from Europe to the United States intellectually liberating and exhilarating, a hundred years earlier Ely found academic freedom by making the reverse journey. As