Abstract ABSTRACT: Publicly traded stock is normally valued in tax settings by multiplying the mean between the highest and lowest sales price on the valuation date by the number of shares of stock. However, when a large block of publicly traded stock must be valued, the valuation process is more complex. This study identifies the variables cited by the courts and the tax literature in these valuation cases. Multiple regression analysis is then used to develop mathematical models of the courts' decision results. The model developed using Tax Court cases is compared to a model developed using cases from the Tax Court, the Court of Claims, and the district courts.

Bernard M. S. van Praag, Jan S. Spit, Huib van de Stadt, A Comparison Between the Food Ratio Poverty Line and the Leyden Poverty Line, The Review of Economics and Statistics, Vol. 64, No. 4 (Nov., 1982), pp. 691-694

This paper examines the effects of demand and cost uncertainty on a firm's investment, output, and pricing decisions. But unlike most earlier studies in which demand and cost are simply not known at the time an output (or pricing) decision is made, here I consider uncertainties over future demand and costs. It will be seen that the effects of such uncertainties depend critically on the characteristics of the firm's adjustment costs. I treat demand uncertainty in a dynamic context by letting the market-demand function shift randomly but continuously through time according to a stochastic process. This means that today's demand is known exactly, but future demand may be larger or smaller, and has a variance that increases with the time horizon. Likewise, uncertainty over factor costs is characterized by treating those variables as stochastic processes. I combine this characterization of uncertainty with a dynamic model of the firm in which some factor inputs can be adjusted freely in response to stochastic demand changes, but other factors are quasi fixed in that adjustment costs are incurred when they are changed. In this model the firm's price and output are random processes, but we can examine the firm's behavior in expected value terms. Of interest is whether the presence of uncertainty should cause competitive or monopolistic firms to invest and produce more or less than they would otherwise, how the effects of uncertainty are influenced by the presence of risk aversion, and how the use of inventories can alter the impact of uncertainty on capacity and sales. Of course these questions have been addressed by others in the past. Among the earliest studies of demand uncertainty are those of Edwin Mills (1959, 1962) and Samuel Karlin and Charles Carr (1962). Mills examined a single period monopolistic firm that sets both output and price, and showed that additive demand uncertainty (i.e., the demand function is of the form q = q( p) + u where u is a random variable) leads to a lower price if marginal cost is constant (so that the firm reduces the expected loss from discarding unsold production). Karlin and Carr confirmed, for both the static case and the multiperiod case with inventory carryover, that additive uncertainty tends to reduce the price and increase the output of a risk-neutral firm, while multiplicative uncertainty does the opposite. Other papers have been concerned with the way in which the error term enters the demand function (additively, multiplicatively, or nonlinearly), the implications of choosing price ex ante instead of output, the implications of risk aversion, and the use of inventories. For example, Agnar Sandmo (1971) and David Baron (1970) showed that a risk-averse competitive firm will produce less when the price is a random variable or subject to an additive error term, but a riskneutral firm will not alter its production.' Hayne Leland (1972) extended these results to a monopolistic firm whose demand can depend in a general way on a random error term (for example, q = q( p, u)), and showed that uncertainty reduces the production of a

For those who measure the greatness of a year by the assumptions and isms that have perished within its span, 1981 will be judged one of the great ones in theoretical macroeconomics. It is the year, I shall argue, of the demise of monetarism; if not the demise, then at least its demotion to a temporary position pending a more promising replacement. But monetarism was not the only fatality of 1981. It is also the year in which the efficacy of fiscal policy was shaken to its foundations. It is conceivable that the idea of stimulating (or contracting) employment by means of fiscal policy measures may yet be reborn in some sturdier theoretical frame. But, for now, the old Keynesian notion of fiscal stimulus is so beset by doubts that fiscal policy, if not truly incapacitated, is in a deactivated status. Thus theoretical macroeconomics is today in a state of crisis. The hope, of course, is that the crisis signals a transition, in a direction not yet foreseen, to some Eriksonian stage of new competence and restored confidence.