Transactions (and precautionary) theories of money demand imply that the more unequal the distribution of income (or transactions), the lower the demand for money. This paper presents evidence that contradicts this implication of transactions theories of money demand. Using annual U.S. data, it is found that as income becomes more unequally distributed, the demand for money increases rather than decreases. The result is found to be robust to a variety of distribution measures and money-demand specifications. Copyright 1993 by MIT Press.

This paper uses a survey of British graduates to estimate the impact of employer-provided training on the earnings of men and women graduates. The results indicate that, although the training impact is reduced after controlling for endogeneity, some forms of training have a considerable impact. However, there are substantial gender differences in the earnings impact of various typ es of training. Moreover, men graduates are more likely to receive training than otherwise identical women. Copyright 1993 by MIT Press.

Choice of survey response format involves a tradeoff between information content and measurement error. Estimation precis ion is examined with (1) a Monte Carlo study where ordered logit fits of categorized data with no measurement error are compared with OLS fit s using the same data in continuous form but incorporating substantial measurement error; and (2) an OLS versus ordered logit comparison us ing actual data where 3, 800 Army officers stated their service intention s with both continuous and category format questions. In both investigations, continuous data do as well or better than category data. Suggesting that the widespread use of category data may be resulting in unnecessary loss of information. Copyright 1993 by MIT Press.

[This article relates the efficiency of nonprofit organizations to the composition of their board of trustees. Following arguments by Fama and Jensen (1983a, 1983b) and Williamson (1983), we conjecture that nonprofit organizations are more efficient if their board of trustees have a larger proportion of outsider trustees rather than insider (employee) trustees since the former are presumed to have a greater incentive to monitor the organization and the latter are presumed to have a greater incentive to consume perquisites. This conjecture is tested empirically for a sample of 72 charities with a specific health focus, with respect to both the technical and allocative efficiency of the organization. Technical efficiency indices were derived by using data envelopment analysis (DEA) under various assumptions concerning the industry production technology, including the assumption that charity outputs are not substitutable for each other. These indices are reasonably well measured since the data included information on volunteer labor, a necessary input for charity services. To test the conjecture that the technical efficiency of the organization is affected by the composition of the board of trustees, the estimated indices of technical efficiency were regressed on the board's proportion of insider trustees and the organization's debt-value ratio. The conjectured relationship was not confirmed by the data. As an additional test, the proportion of insider trustees was replaced by the ratio of insider-trustee remuneration to total labor remuneration, the argument being that the greater the relative remuneration received by the insider trustees, the more capable they might be in appropriating perquisites of all types. As before, the results did not confirm the conjectured relationship, leading us to conclude that the technical efficiency of nonprofits is not affected by the composition of the board of trustees. To determine the relationship, if any, between the allocative efficiency of the organization and the composition of the board of trustees, charity costs were multiplied by the technical efficiency index so that any remaining cost inefficiencies are allocative in nature. This adjusted cost was then regressed on the proportion of insider trustees on the board (or the proportion of insider-trustee remuneration) and the organization's debt-value ratio. The conjectured relationship between allocative efficiency and the composition of the board of trustees was also not confirmed by the data.]

Abstract Reviews the book "Surviving Your Dissertation: A Comprehensive Guide to Content and Process," by Kjell Erik Rudestan and Rae R. Newton.

[Auditor liability is a growing concern of public accounting firms (Collins 1985; Flynn et al. 1990; Mednick 1987; Minow 1984). In lawsuits brought by clients for breach of contract and tort actions for negligent execution of an audit, as well as in an increasing number of lawsuits brought by third parties, a common defense is the auditor's compliance with generally accepted auditing standards (GAAS). In this study, the source of professional auditing standards was manipulated to examine its influence on jurors' decisions. Four fact patterns were presented to members of jury pools called to jury duty. Prospective jurors responded to a fact pattern by voting in favor of either the plaintiff/client or the defendant/auditor. The fact patterns were manipulated to compare jurors' responses to standards of auditing performance established by the federal government versus those established by the auditing profession. In addition, a comparison was made of jurors' responses to two sets of instructions provided by the judge: either that standards alone set the required level of performance or that standards are only a part of the evidence to be considered in establishing the required level of performance. At trial, a judge's instructions to the jury before its deliberations can be influenced by counsel for the public accounting firm as to the evidentiary weight assigned to professional standards. The results that follow indicate that jurors are more likely to rule against a CPA firm when the profession's standards are offered in defense and less likely to rule against it when government standards of performance are offered in defense. Also, as expected, jurors are more likely to accept standards in defense, whether established by the government or the profession, if the judge identifies the standards as the only criterion for an expected level of performance rather than as only part of the evidence.]

Abstract Reviews the book "The FASB Conceptual Framework 1973-1985: An Analysis," by Pelham Gore.