I N Weber's (1929) theory of the location of industry, spatial firms produce under conditions of fixed-proportions and constant returns to scale, while their spatial consumers have priceinelastic demands. Weber's assumptions are relaxed separately in previous work. Moses (1958) and Alonso (1967) allow either for flexible technologies but inelastic demands or for pricesensitive demands but fixed-proportions technologies. This paper presents a behavioral and econometric model of spatial firms which simultaneously relaxes restrictive assumptions on both technology and demand. Assumptions of earlier models become testable hypotheses. The behavioral model is general to any spatial firm; the econometric model can be estimated for any industry. The paper reports an estimation of the model for a sample of fully-integrated steel plants in the United States. The steel industry is appropriate for illustrating the general model for two reasons. First, the important inputs in steel are localized, weight-losing materials, while transportation charges are a nontrivial part of the delivered prices of both these inputs and of steel products. Second, previous research lacks agreement about the principal determinants of steel plant locations. Disagreement also exists over the structure of production and the extent of scale economies in production, and the existence of substitution possibilities among inputs. Each of these disagreements is treated as a hypothesis within this paper. First, a model which includes the influences of both consumers and materials on location can distinguish the comparative influence of each. The literature lacks agreement on whether the steel industry is transport-oriented, in which case consumer demands are price-inelastic and an optimal location minimizes transport costs, or market-oriented, in which case, consumer demands are price-elastic and an optimal location reflects that sensitivity. Isard (1948) suggests the influences on location change over time, due to changes in technology and relative prices. Isard and Capron (1949) conclude the steel industry is transport-oriented. More recently, Hekman (1978) reports that the demand for steel is priceelastic. He concludes that locations in the steel industry are sensitive to consumer demands. The evidence in this paper portrays the steel industry as transport-oriented. Second, there are differing estimates of the extent of scale economies in steel production, ranging from constant returns to scale (Hekman, 1978), to a minimum efficient scale (m.e.s.) of twelve million tons (Cockerill, 1974). Scherer (1973) and Weiss (1976) estimate m.e.s. of four million tons, while Tarr (1977) gives the mid1970s m.e.s. at six million tons, an estimate reported in this paper as well. Third, the existence of substitution possibilities among inputs has implications for both location and production. If substitution possibilities are limited, Weber models of location may be applied to the steel industry. Previous research has characterized steelnmaking technology as fixed-proportions (Tsao and Day, 1971), Cobb-Douglas (Hekman, 1978) or having wide variation in substitution possibilities (Kopp and Smith, 1980; Moroney and Trapani, 1981). This paper presents estimated elasticities of substitution suggestive of great substitution possibilities among inputs. The behavioral model of location and production is presented and then transformed into an econometric model in section II. A brief discussion of regional markets for steel products and a description of the data appears in section III. Received for publication July 31, 1981. Revision accepted for publication July 7, 1982. * Wayne State University. This research is based on my Ph.D. dissertation at the University of Wisconsin-Madison. The advice of Frank M. Gollop, Eugene Smolensky and Charles A. Wilson is gratefully acknowledged. I have benefited from discussions with James Hamilton and Li Way Lee and comments by Jan Brueckner and several anonymous referees. Computing support has been provided by the Graduate Schools at the University of Wisconsin-Madison and Wayne State University. The responsibility for any remaining errors is mine. An earlier version of this paper was presented at the 1980 North American Meetings of the Econometric Society.

The process of security price adjustment to the release of new information has long held the interest of the finance profession, both in academics and in practice. The efficiency of financial markets in reflecting new information significantly impacts the allocation of capital and income within the markets1 and, consequently, can affect social welfare. Thus, public, business, and investment policies are all related to an understanding of the functioning of security markets and their utilization of information. As a result, a significant body of economic research has considered the impact of information upon security markets under a number of alternative market structures. In this paper, we attempt to contribute to this literature by extending previous research in the two related areas of speculation and information dissemination.

In 1959, Henry Lataná [2] proposed an approximation to the geometric mean that was a simple function of the arithmetic mean and variance, thereby indicating a mathematical relationship between the risky investment choice model of Bernoulli and the Markowitz mean-variance model. In 1969, Young and Trent [4] presented empirical test results of the Latané approximation, as well as a set of other approximations to the geometric mean based on moments, and concluded that the Latane formula yielded a quite accurate approximation to the geometric mean. In Jean's 1980 paper [1] relating the geometric mean model to stochastic dominance models, the infinite series representation of the geometric mean used suggests a more accurate approximation with moments of the geometric mean than that contained in the earlier papers may be possible. Various forms of that series expressed in alternate-origin moments are tested empirically below, and the results confirm that this later series does yield the greatest accuracy of the three approaches.

Frank H. Selto, Hugh D. Grove, The Predictive Power of Voting Power Indices: FASB Voting on Statements of Financial Accounting Standards Nos. 45-69, Journal of Accounting Research, Vol. 21, No. 2 (Autumn, 1983), pp. 619-622

Ross's Arbitrage Pricing Theory (APT) is a tractible and reasonable alternative to the mean-variance model. Nonetheless, understanding of the theory has been obscured by the complexity of the sequence economy models used for motivation. By contrast, we give a simple and direct derivation of the APT in a finite economy. Using an explicit bound on the deviations from APT prices across assets, a coarse calculation shows that theoretical deviations from APT pricing are negligible in our economy.

The article presents the author's opinions on an article by Karl E. Weick, published in the April 1, 1983 issue of the periodical "Accounting Review," which argued that stress is an important accompaniment of corporate accounting practices. That article by Weick was titled: "Stress in Accounting Systems." Weick's main thesis seems to be that bad times generate more questionable accounting practices than good times, the reason being that bad times create more stress, and stress has a negative effect on the soundness of accounting practices. Perhaps this is so. However, there appears to be at least one alternative and equally plausible explanation. During bad times, the set of distinct decision alternatives available to managers is more limited, both because the resource base is typically smaller and the opportunities to employ resources are usually narrower. Since one dimension of a decision alternative is the accounting treatment to be followed, the best overall alternative in bad times may well involve a more "questionable" accounting method than the accounting method associated with the best overall alternative in good times.

Reviews the book "Accounting Estimates by Computer Sampling," 2nd ed., by Maurice S. Newman.

States. Rather, observed interregional differences in average real wages probably arise from different relative endowments of various heterogeneous labor types. Because these results conflict with findings of most previous studies, comparisons are made with the approaches taken by other investigators. Those comparisons indicate that empirical estimates of interregional differences in the structure of wage and earnings equations are sensitive to (1) the treatment of geographic cost of living differences, (2) the completeness of the specification of the regressors, particularly the human capital measures, and (3) whether part-time workers are included in the sample.