LIKE any livestock industry, the Canadian beef and dairy cattle industry is characterized by a cyclical pattern in terms of the number of cattle on farm, the number of cattle slaughtered and the number of cattle exported. Traditionally, the analysis and forecast of cattle stocks are based either on econometric models which often include the biological life cycle of cattle or on the pure biological nature of cattle.' In this paper, we investigate the behavior of the cattle industry through the use of a third approach-the Markov chain technique. The Markov chain technique is by itself a very mechanical procedure, but one which can incorporate economic justifications. It can then, in our view, provide a very fruitful view of the industry. Basically, the Markov chain technique allows us to construct flow matrices of beef and dairy cattle according to their biological sequences. For instance, a male calf born during any time period t can, in the same period, be slaughtered, exported, die or remain on farm as a calf. The decision to retain a calf as a steer (for future slaughter) or as a bull (for future reproductive purposes), to export the calf, or to slaughter the calf (for veal), is basically an economic decision. The outcome of such decisions is translated into the elements of the Markovian transition flow matrix. Based upon the biological sequences of the different categories of cattle and the structure of the beef and dairy cattle industry, we can set up transition matrices for Western and Eastern Canada. Table I indicates the structure of such matrices for Western Canada. Cells representing possible flows are identified by numbers while cells representing impossible flows are left blank.2 Transition probability matrices of cattle movement can be constructed by dividing each row element in the matrix by its corresponding row total. These probabilities reflect the probabilities of cattle moving from one category to another. It is also through the use of such probabilities that we will carry out our simulation analysis. This paper is divided into seven sections. In the second section a model of demand, supply and inventory for beef and dairy cattle is presented. Section III discusses some general empirical results based on the transition probability matrices. Section IV discusses the procedures for simulation using the conditional transition probability matrices. Section V presents the results of the historical simulation while section VI presents the results of some sensitivity analysis experiments. The last section is for concluding remarks.

Until 1974, firms could choose, within GAAP, to capitalize or expense interest costs associated with capital expenditures. The predominant practice had been to treat interest as a period expense. However, in 1974, the Securities and Exchange Commission imposed a moratorium on further adoption of interest capitalization by non-regulated firms. This study empirically examines economic factors potentially influencing firms' decisions to expense or capitalize interest prior to the SEC moratorium. We hypothesize that the choice may be affected by (1) the existence of management compensation agreements tied to reported earnings, (2) debt covenant constraints, and (3) the political costs (for some firms) of reporting higher earnings. When compared to the control group, our findings are that (1) the frequency of explicit management compensation packages was not greater for the interest capitalization group, (2) firms with financial ratios closer to likely debt agreement constraints (on dividends, interest coverage, and leverage) tended to elect interest capitalization, and (3) other than the largest firms in the ‘politically sensitive’ petroleum refining industry, the larger firms were more likely to capitalize interest.

Journal Article A Note on the Interpretation and Estimation of Parkin's Discount House Portfolio Model Get access Kenneth W. Clements Kenneth W. Clements The University of Western Australia Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 48, Issue 3, July 1981, Pages 533–535, https://doi.org/10.2307/2297165 Published: 01 July 1981 Article history Received: 01 July 1980 Accepted: 01 December 1980 Published: 01 July 1981

Information value, Uncertainty, Decision making

Abstract Reviews the book "Reporting Transnational Business Operations," by Francis A. Lees.

Abstract ABSTRACT: Previous studies analyzing the publication rates of various accounting faculties concentrated upon only four journals, two of which were primarily academic. This study examines publications in 12 journals, representing the much broader audience addressed by accounting authors. The 25 schools with the largest number of publications are listed both on a total publications basis and on the basis of average output per faculty member. The concentration of effort by some schools on particular segments of the audience is highlighted.

Abstract ABSTRACT: This paper presents a conceptual and empirical analysis of the way in which coalitions of managers (i.e., firms) respond to regulation. The conceptual analysis provides a model of managerial behavior based on the assumption that these coalitions make cost/benefit analyses of activities in their self-interest. The model is used to develop hypothesized responses to the internal accounting control provision of the Foreign Corrupt Practices Act of 1977. These hypotheses, that the regulation would not directly affect the level of internal accounting controls, but would affect the expenditure of resources for efforts to "prove" compliance with the law, were generally supported by the empirical results.

For more than three decades, economic columnist Joseph A. Livingston has canvassed a panel of economists twice a year, eliciting their six-month and twelve-month forecasts for more than a dozen key variables. This study analyzes whether experts' predictions are unbiased, and whether complete use was made of all relevant, known information (unbiasedness and completeness being necessary conditions for fully rational expectations). Little bias was found in either half-year or full-year predictions, but extensive underutilization of information-particularly data on monetary growth-occurred. To prophecy is extremely difficult-especially with respect to future. Chinese proverb Do ECONOMISTS' EXPECTATIONS regarding key price and nonprice variables utilize all known, relevant information, in an unbiased, efficient manner? This is a worthy subject for research, for several reasons. Properties of experts' predictions likely form an upper bound for those of laymen. Further, as John Muth [14] has noted, the character of dynamic processes is typically very sensitive to way expectations are influenced by actual course of (p. 316); hence, we need to know precisely how events do affect expectations. Finally, common practice of replacing a variable's (generally unobserved) expectation with a proxy based on its past values will be unbiased (and will not cause bias in other