[This paper presents an axiomatic characterization of commodities for which the consumer faces a choice of quality rather than a choice of quantity. Properties of individual and market demand functions for commodities of differing quality levels are derived. Properties of comparative static price changes in response to supply changes at one or more quality levels are also developed. The analysis is then applied to price changes in housing markets.]

r HE increased attention in the literature devoted to the market for federal agency securities,' parallels the rapid growth in that sector of the capital market since 1966. Two studies, one by Kochin (1972)2 and the other by Peskin (1971),3 have already appeared. These studies surveyed various aspects of the agency market, such as the structure of yields in the secondary market, the characteristics of agency securities, and certain indicators of performance in the secondary market, such as volume traded, bid-ask spreads, dealer positions and price variability. This paper is addressed to a more specific aspect of the agency market, namely, the determinants of the yield on newly-issued agency securities. In order to avoid the issue of determining the overall level of interest rates we reduce the problem to determining the yield spread between newly-issued agency securities and comparable maturity Treasury securities. A comparable maturity Treasury issue is considered the best available benchmark with which to compare newly-issued agency issues.4 A key issue which receives considerable attention below is whether there exists an optimum size of issue in the agency market. In other words, we will try to isolate the size of issue which minimizes the yield spread between an agency issue and a comparable maturity Treasury security. Minimizing this yield spread is an important objective for a federal agency since this is one criterion used to judge the efficiency with which it issues its liabilities in the capital market.5

of the two major specifications of the Phillips curve supports the view of the expectations approach to the theory of inflation. In both specifications of the Phillips curve, evidence of a distributed lag between the variables was uncovered. Of particular interest are the findings that (1) unemployment lags wage changes and the lag is distributed, (2) wages lag prices, and (3) the level of profits are only weakly related to the rate of change in money wages.

Security market regulators, among others, are concerned to know whether or not dealers are natural monopolists. Based on a randomly drawn sample of 314 over-the-counter stocks, the results of this study suggest that while there are economies of scale, they are not on the dealer level. In addition, both systematic and unsystematic risk were tested for association with the transaction costs in this market. The evidence suggests unsystematic risk is related to spread.

Journal Article General Equilibrium with a Replenishable Natural Resource Get access Vernon L. Smith Vernon L. Smith California Institute of Technology Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 41, Issue 5, December 1974, Pages 105–115, https://doi.org/10.2307/2296374 Published: 01 December 1974

Abstract The article focuses on the book "Effect of Circumstances on the Application of Accounting Principles," by R.K. Mautz. The degree of formalization in accounting is quite high, but perhaps it is becoming less so. Increasingly complex economic activity and organizational arrangements, as well as social and political pressures, are making it less possible to clothe all potential accounting situations with preprogrammed solutions. Though accounting remains predominantly governed by rules and procedures, and thus provides Simon-type "programmed decisions," relatively more and more accounting may call for what author James D. Thompson has labeled "judgmental strategies." Alienation, a word which has received considerable attention in the organizational behavior literature of late, has also been linked to formalization, especially where professionals are concerned. There are various stages at which performance may be influenced. It may be through selective recruitment, suitable training and socialization, or control of one's actions on the job. Recruitment into the profession is important and deserves attention.

Abstract This article presents a reply to a comment on the study of the audit staff assignment in accounting in the U.S. There are no actual implementations of linear programming in audit staff scheduling. There are lamentably few implementations of linear programming or other quantitative decision models. There is a report of an application of linear or goal programming to audit staff scheduling or other problem. As accounting professionals the responsibility to encourage applications of the proposed models is the priority.

Abstract The article reports that on a time-state preference simulation model, it has been shown that there is little synergistic effect of combining a net present value objective function with a payback constraint and there is a possibility to increase greatly the performance of a net present value model by assigning projects to two or three risk classes and using a different discount rate for evaluating projects in each risk class. From this, several tentative conclusions may be drawn. First, the increasing use of a payback period as a secondary criterion in capital budgeting is not completely irrational since it does improve the decisions of a straight NPV model in highly uncertain environments. However, the NPV-PBK model in general leaves much room for improvement. Second, the dominant use of the NPV model seems warranted, provided different discount rates are used for different risk classes of projects. From the performance levels when only two or three risk classes are used, it appears that the NPV-RC model provides decisions nearly as good as even the most sophisticated models.

Abstract This article presents comments of the author on the article "Present Value Models and the Multi-Asset Problem," by Richard P. Brief and Joel Owen, published in the October 1973 issue of the journal "The Accounting Review." The main conclusion of the article was that the internal rate of return (IRR) is essentially a firm model, not a single-asset model. A corollary of this conclusion is that the appropriate discount rate to use in present-value depreciation models is not the IRR on each individual asset, but the overall IRR on a firm's total portfolio of assets, even where the returns on a particular asset are independent of the firm's other assets. The basic premise implicit in Brief and Owen's analysis is that the accounting model should generate expected periodic income figures that would enable firms to report periodic rates of return on book value equal to the expected IRR on the firm's total portfolio of assets at any point in time. The internal rate of return is commonly defined as the discount rate that causes the present value of cash receipts from an investment over its life to equal the present value of cash outlays related to the investment. Present value methods, in general, are designed as direct valuation models, while the accounting model explicitly recognizes only values that have been verified by exchange transactions.

Abstract This article presents a study on selected items of information and their disclosure in annual reports in accounting in the U.S. This study has presented the results of a mailed questionnaire survey of financial analysts which sought to determine the relative importance of 38 selected items of information. The extent of disclosure of the 38 items was then measured for a sample of annual reports from 88 small and medium size companies. The results indicated that many of the items were inadequately disclosed in the sample and that the correlation between the relative importance of the items and the extent of their disclosure was small. On the basis of these results, the writer has concluded that an opportunity exists for an expansion of the extent of disclosure in the annual reports of small and medium size companies.