T. S. Breusch, A. R. Pagan; The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics, The Review of Economic Studies, Volume 47,

Roland E. Dukes, Thomas R. Dyckman, John A. Elliott, [Discussion of The Economic Effects of Involuntary Uniformity in the Financial Reporting of R&D Expenditures and Accounting for Research and Development Costs: The Impact on Research and Development Expenditures]: A Reply, Journal of Accounting Research, Vol. 18, Studies on Economic Consequences of Financial and Managerial Accounting: Effects on Corporate Incentives and Decisions (1980), pp. 91-95

In October 1974, the Financial Accounting Standards Board issued FASB Statement No. 2, Accounting for Research and Development Costs (henceforth FAS2). The essence of the mandated accounting treatment is stated in paragraph 12 of the Statement: All research and development [R&D] costs encompassed by this Statement shall be charged to expense when incurred. This accounting treatment was contrary to the practice followed by many firms which capitalized and amortized R&D costs. The Board's definition of R&D costs is quite inclusive following, with some modifications, the commonly used interpretation by the National Science Foundation. The Board defines R&D, in paragraph 8, as follows:

Capital Budgeting, Investments, Opportunity costs, Decision making

Noncooperative oligopoly behavior in nonrenewable resource markets is analyzed under stationary conditions assuming perfect information. The existence of Cournot-Nash equilibria in output paths is established under standard cost and demand assumptions, and a number of comparative dynamic results are obtained. If all suppliers have the same costs, for instance, and total reserves are fixed, either increasing the number of suppliers or equalizing their reserve holdings causes more rapid resource use. If suppliers' costs differ, it is shown that equilibrium involves inefficient production; high-cost reserves may even be exhausted before low-cost reserves.

This paper is concerned with testing for causation, using the Granger definition, in a bivariate time-series context. It is argued that a sound and natural approach to such tests must rely primarily on the out-of-sample forecasting performance of models relating the original (non-prewhitened) series of interest. A specific technique of this sort is presented and employed to investigate the relation between aggregate advertising and aggregate consumption spending. The null hypothesis that advertising does not cause consumption cannot be rejected, but some evidence suggesting that consumption may cause advertising is presented.

Presents an obituary for Frank Sewell Bray, a chartered accountant who died on January 29, 1979.

The rapid advancement of technology leading to quicker obsolescence, shorter life cycles, and more intensive competition has resulted in renewed emphasis on the abandonment and replacement decision in the analysis of investment projects. Once an investment was undertaken, many corporations in the past often abandoned a project only when it either suddenly ceased to function, or else when it became so unprofitable that abandonment was literally forced. Several authors have demonstrated that a project could be abandoned well before any of these terminal conditions existed. Robicheck and Van Home, for instance [14], showed that an asset could be abandoned even though it may be expected to generate positive cash flows in subsequent years. Dyl and Long (DL) [6], in a modification to the Robichek and Van Home (RVH) model regarding the year of abandonment, suggested that rather than abandoning a project at the earliest time–whenever the abandonment value exceeded the present value of all subsequent future flows– all possible cases of abandonment over the life of the asset should be considered. In this manner, the procedure is to select the highest net present value of an asset over all cash flow and abandonment possibilities. This result particularly holds when all projects have the same degree of risk and when there are frictionless markets and no capital rationing.

models where only years of education, but no quality measures, were included, returns to education declined for both blacks and whites in older cohorts. The interesting result from Welch's point of view was that the percentage returns to black education fell off appreciably faster compared to whites as the cohort aged. The implication is that blacks have been gaining with respect to whites as far as returns to education are concerned. Welch observed that this gain to blacks is likely to be due to a recent rise in the quality of education for blacks relative to whites. From a policy point of view, this leads to the conclusion that, however limited its role may be, education still is a potential policy tool with which to reduce observed racial earnings differences. The basic problem with Welch's results is that the observed decline in the returns to education for older blacks could have oc