Journal Article Imperfect Information and Credit Rationing: Comment Get access James D. Hess James D. Hess North Carolina State University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 99, Issue 4, November 1984, Pages 865–868, https://doi.org/10.2307/1883129 Published: 01 November 1984

The marginal performance contribution made by new assets in a portfolio is identified. The maximum change in a portfolio's Sharpe performance from the addition of new assets is a simple function of a generalized Jensen index and the unexplained covariances from a multivariate market model. Deviations from a higher dimension market line may be used to rank the desirability of asset additions to an existing portfolio. Statistical tests for the equality of the performance contributions by new assets is possible.

A hstract-This paper develops a model of the decision to adopt interrelated innovations emphasizing the role of innovative ability and a measure of the economic incentive to be informed about innovations. Education, experience, and the availability of information are hypothesized to be measurable dimensions of innovative ability. The results from fitting univariate, conditional, and joint logistic models suggest that innovative ability contributes significantly to explaining the adoption of new technology but does not explain its diffusion. The results also indicate that the diffusion of previously available innovations depends on the introduction and adoption of interrelated current innovations.

We analyze the variance of log earnings within labor force cohorts of U.S. males with particular attention to the influence of labor force growth rates. Estimates with data from the 1968-79 current population surveys reveal increases in earnings inequality within labor force cohorts even after we control for the level of education, experience, and unemployment. A model of human capital investment is used to analyze differences among cohorts in the life-cycle profile of the variance of log earnings. It is shown that a pattern of sharply increasing and then declining labor force growth rates will tend to raise the return on human capital investment and thereby increase the variance of postschooling investment and log earnings early in the life cycle. This positive effect on relative earnings inequality should decline with experience and possibly become negative. Because of the post-World War II baby boom and baby bust, recent labor force entrants have faced just such a pattern of actual and projected labor force growth rates during their work life. An extended model is tested and generally confirmed using estimates and forecasts of labor force growth rates for the period 1920-2000.

We analyze the variance of log earnings within labor force cohorts of U.S. males with particular attention to the influence of labor force growth rates. Estimates with data from the 1968-79 current population surveys reveal increases in earnings inequality within labor force cohorts even after we control for the level of education, experience, and unemployment. A model of human capital investment is used to analyze differences among cohorts in the life-cycle profile of the variance of log earnings. It is shown that a pattern of sharply increasing and then declining labor force growth rates will tend to raise the return on human capital investment and thereby increase the variance of postschooling investment and log earnings early in the life cycle. This positive effect on relative earnings inequality should decline with experience and possibly become negative. Because of the post-World War II baby boom and baby bust, recent labor force entrants have faced just such a pattern of actual and projected labor force growth rates during their work life. An extended model is tested and generally confirmed using estimates and forecasts of labor force growth rates for the period 1920-2000.

A number of recent research papers use two-stage procedures in lieu of a single multiple regression, in some cases purportedly as a solution to colinearity among independent variables. We demonstrate that, since collinearity is inherently a data problem rather than a statistical problem, no partitions of dependent or independent variables, orthogonal or otherwise, can provide insights into the relative influence of collinear variables. For the class of linear unbiased estimators this follows directly from the Gauss-Markov Theorem, but we demonstrate some of the results in detail as an aid to interpreting particular papers.

During its study of the auditing profession, the Cohen Commission received some practitioner inputs which suggested that "one of the causes of the discontinuity between accounting theory and practice is that students graduate from accounting programs with no understanding of the mechanics of how an accounting system operates and what the related documentation looks like" [AICPA, 1978, p. 177]. Thus, the question is raised as to whether accounting curricula are providing students with sufficient knowledge about the form and function of the various documents, records, journals, and ledgers used by enterprises to conduct and to record the results of business activities. The implication of the CPA inputs to the Cohen Commission efforts is that a lack of such knowledge can be a deterrent for auditing students in understanding the concepts of audit program development and evidence collection procedures. This paper reports on a Systems Understanding Aid that has been designed to address students' need for additional knowledge about basic accounting system documents and records. The Aid was administered to students and evaluated for effectiveness. Student testing of the Aid has shown it to be an effective pedagogical supplement to the accounting curriculum.

Reviews the book "Current Cost Accounting: Its Concepts and Its Uses in Practical Terms," by Christina S.R. Drummond and Allan D. Stickler.